Salt Lake Chamber gives ideas for budget

The Utah Legislature will face a massive budget deficit when it convenes next year. But it needs a solution that doesn't further burden public or higher education or include a general tax increase, according to Salt Lake area business leaders.

The Salt Lake Chamber on Wednesday presented its six "cornerstone" recommendations for how the Legislature should cope with an estimated budget deficit of $850 million for fiscal year 2011. It's a plan that holds transportation projects harmless, avoids further cuts to higher and public education budgets and puts the sales tax back on food. But it reduces overall sales tax rates while raising taxes on tobacco and gasoline, among other steps.

"Anyone can balance the budget, I guarantee it," said Lane Beattie, the chamber's president and CEO. "The challenge is to balance it in a manner that propels our economy forward."

"We are concerned that raising general taxes will unnecessarily delay economic recovery," said Jake Boyer, chairman of the chamber's Board of Governors.

More cuts to public or higher education would be deadly to recovery as well, said Mark Bouchard, managing director of CB Richard Ellis. Education is "too critical to the long-term prosperity of the state to face further cuts." He noted that a "well-trained work force is the single most important element" to economic prosperity.

Instead, the chamber supports an increase in targeted user fees, including raising gasoline taxes 10 cents a gallon and increasing the tax on tobacco to "at least the national average," Beattie said.

Putting the sales tax put back on food but lowering the overall sales tax rate is a move they say will be cost-neutral in the short term but will add stability to the tax base. And they want legislators to look closely at efficiencies and savings they can get in state government operations through targeted cuts.

What cuts? "We have the great advantage of not having to be specific," said Beattie, who added that in reality, "there are ways to cut" and lawmakers need to apply good business practices to do so.

Other suggestions for addressing the structural deficit include using $220 million, or about half, of the state's Rainy Day Fund; spending the money set aside for education; and suspending assorted earmarks temporarily. Chris Redgrave, chairwoman of the Can-Do Coalition, a group committed to promoting Utah and strengthening the local economy, called the challenges "unlike any seen in my lifetime," but said the long history of the business community working with elected officials makes her confident that the deficit can be resolved without harming the state's future prosperity.