New shortfall means major pain for lawmakers
State political leaders got some bad news this week — tax revenues could be down another $150 million when the Legislature meets in late January to set the 2010-11 budget, which starts July 1.
That would mean the current $700 million gap between this year's spending and next year's spending could grow to $850 million.
Gov. Gary Herbert, who seeks his own election as governor next year, is not about to suggest any kind of tax hike to help close that growing gap.
A few GOP legislative leaders are brave enough to say that lawmakers should look at raising the alcohol and tobacco taxes by $100 million.
But even they don't want to go above the $100 million tax-hike level.
So, if tax revenue is down another $150 million, what are the political considerations of January's general session, now just four months away?
Bleak, I think, is the right word.
The minority Democrats, hoping to crawl above their current one-third-of-the-body level in the 2010 elections, must be careful not to suggest huge tax hikes.
That just plays into the Republicans' claim that Democrats are the tax-and-spend party.
But Republicans don't want to slash budgets too much, either.
Utahns are already stressed economically as the recession continues, unemployment rises and the housing market lags.
But parents don't want to see teachers laid off and their children packed into more crowded classrooms.
As one GOP legislative leader told me way last spring, it makes little sense to lay off 2,000 teachers next year only to hire most of them back a year later when Utah tax revenues begin to climb again.
Most Republicans are members of the LDS Church. And as such don't drink alcohol or smoke cigarettes. Thus, increasing those taxes would raise the tax burden, for the most part, not on their party loyalists, GOP lawmakers know.
Of course, there are members of the party's right wing that oppose any taxes any time, any place for just about any purpose.
Still, arguments can be made that tobacco use costs the state millions of dollars in health-care payments. And alcohol use comes with its own impacts on society.
In poll after poll over the years, Deseret News pollster Dan Jones & Associates has found Utahns willing to pay higher taxes if the money goes to programs they support, like schools.
While a $100 million tax hike would help with the fiscal 2011 budget, GOP leaders warn that this coming general session will be one of the most painful in decades.
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