Herbert says he won't raise taxes

Read his lips.

Gov. Gary Herbert pledged Thursday not to raise taxes next year, despite a looming budget shortfall.

"I think raising taxes at a time of economic downturn is absolutely the wrong thing to do. We want to grow the economy," Herbert said during his first appearance on the governor's monthly news conference on KUED Ch. 7.

The new governor, who took office Aug. 11 after former Gov. Jon Huntsman Jr. resigned to become U.S. ambassador to China, said he believes the budget can be balanced without any tax increases.

However, Herbert stopped short of promising to veto any budget from the 2010 Legislature that includes tax increases. The state is facing an anticipated $700 million shortfall in the budget year that begins July 1, 2010.

To close that gap, some GOP lawmakers are already talking about a tax increase of $100 million, new money that would come from several sources, including increasing taxes on tobacco and alcohol.

"I don't think we need to think, 'Oh my gosh, the sky is falling' and raise taxes and have a counterproductive measure that may be stifling economic growth," Herbert said.

He warned higher taxes of any kind could further depress the economy, just at the time when it appears to be ready to rebound.

"I guess we can always target somebody," Herbert said. But he said he would not sacrifice the long-term health of the economy. "The principles are what's going to guide me, not the fact that this is something that is politically expedient," the governor said.

Herbert said the state needs to rely on finding new "efficiencies" in the budget, as well as using at least some of the so-called "Rainy Day Fund," now at $419 million, and the $100 million also set aside for education.

"That's what the Rainy Day Fund is for. It's raining out there," Herbert said, adding it would be unwise to use up all of those funds, especially if it impacts the state's AAA bond rating.

He would not, however, guarantee Utahns wouldn't see any tax increases next year. "There's a lot of what-ifs, so it would be premature for me to say anything regarding vetoes," Herbert said.

His fellow Republicans in the Legislature aren't eager to raise taxes.

"We're just exploring all the options. It's way early," said Senate President Michael Waddoups, R-Taylorsville. "If we can do without a tax increase, I'll be voting with him."