Tax hikes likely after $1B in cuts

Raising the cigarette and gasoline taxes and increasing vehicle registration fees will all be part of tough budget-balancing discussions over the next few days in the Utah Legislature.

Why?

This number: $1,008,869,200.

That $1 billion has been cut from state programs from a year ago by budget committees this session.

"And we just can't take all those cuts," said one House GOP leader. An average of 19 percent cuts in one year is just too much, he added.

A tobacco tax bill has already been voted down. But nothing is dead in the Legislature until the final gavel falls at midnight March 12.

The tobacco and state gasoline taxes have not been raised in years. But one leader said that both can be logically tied to specific benefits — like keeping UHP troopers on the road and fighting teenage smoking — which cannot be done with some other proposed tax hikes, such as the food tax increase.

Still, some Republicans and Democrats want to look at putting the state's share of food sales tax back on. It was dropped from 4 percent to 1.75 percent. That would raise $180 million.

Also, Gov. Jon Huntsman Jr. has already suggested a $20 per vehicle increase in the yearly registration fees as part of his 2009-10 budget, recommended more than a month ago before worse revenue projections came in.

In an open House GOP caucus Tuesday, the harsh reality of cutting more than $1 billion from programs was explained:

 Up to 3,000 state and higher-education employees laid off.

 Up to five days of public school days eliminated, kids staying home and teachers not being paid for those days.

 Dozens of "critical" state programs cut, with the low-income, sick and disabled harmed the most.

 Public colleges and universities harmed, along with their "economic stimulus" goals thwarted.

 Up to 400 prison inmates getting early release, starting next summer. The criminals would go on the streets with no special community-based programs, fewer parole officers to watch over them.

 Courts cut back to a four-day week.

 A number of state parks closing several days per week.

 Poorer tax collection measures, delayed income tax refund checks.

 Up to 60 Utah Highway Patrol troopers laid off.

Despite the painful reality of the cuts, the Republican-dominated Legislature understands that Utah can't tax its way out of this financial mess.

To close the whole $1 billion gap would take a 20 percent increase in all state taxes and fees, clearly not desired, and probably not politically possible. Instead, many cuts will be made, with some "targeted" tax hikes.

But even with some tax hikes, state programs will be cut back, said House Budget Chairman Ron Bigelow, R-West Valley.