inefficiencies, duplications, overstaffing and other wasteful practices - be eliminated from state and local government in Utah to compensate for the revenue losses that would result from passage of two of the three Tax Limitation Initiatives to be voted on in November?

This, according to Utah Foundation, is the heart of the issue which Utah voters are being asked to decide when the two initiative petitions come before them. The foundation, a private, non-profit research organization that historically does not take sides in controversial issues, looks at arguments advanced by both sides on the tax-reduction question in a research report released Monday.Three initiatives will be on the Nov. 8 general ballot. One initiative, if passed, would roll back the 1987 tax increase, restoring the sales, income, gasoline and cigarette taxes to 1986 levels. The second would cap property taxes on residential property at 0.75 percent of fair market value, and other property at 1 percent of fair market value, and would limit growth in state and local governments. The third would give a state income tax credit to parents whose children attend private schools.

The Utah Foundation in its Monday release addressed the first two, the Peoples Tax Reduction Act and Peoples Tax and Spending Limitations, which will be voted on in November.

The Utah State Tax Commission has issued figures, based on application of the two initiatives' provisions to 1986 tax receipts, indicating that state and local revenues would be reduced by approximately $346 million. The commission is engaged in compiling new analyses based on more recent collections that are expected to be higher, due to natural growth and inflation.

Opponents of the proposed tax and revenue restrictions present extensive estimates of what the revenue loss would mean to operations of state and local government institutions and agencies. Supporters of the initiatives argue that essential services would not be interfered with, but that revenue losses could be offset by eliminating unneeded "fat." Tax protesters point to recent changes that $3.5 million was misappropriated at the Timpanogos Mental Health Center in Utah County, and a tax protest leader said in public debate that "people who think that this (the Timpanogos situation) is an isolated incident are beyond help."

Opponents of the proposed restrictions agree that such situations should be eliminated but point out that approximately 100 situations of the magnitude of the Timpanogos affair would have to be identified and corrected to absorb the proposed revenue cuts, and that the action would have to come immediately to avoid serious impacts on essential services.

Taxpayers for Utah, an organization supported by concerned business and community leaders to oppose the tax limitation initiatives, has published and discussed projections of what the effect of the tax limitation initiatives would be and says there would be several restrictions in services in public education, higher education, social and health services and in many areas might be catastrophic.

The Tax Limitation Coalition of Utah, sponsors of the tax limitation initiatives, insist that they are not going "to close schools, take food from the needy, or put handicapped persons out on the street," but are "only working to eliminate government waste."

Tax protesters have not attempted to argue points raised by their opponents in any detail, but stand by their assertion that government waste can be eliminated only by reducing the funds on which government operates.

Utah Foundation notes a close resemblance between the tax protesters' position and the theories of the English economist-lecturer C. Northcote Parkinson, who attracted international attention in the 1950s and 1960s. Parkinson's economic "laws" were couched in humorous language, but were taken seriously by economists. Parkinson's first law: "Work expands to fill the time available for its completion;" his second law: "Expenditure rises to meet available income;" and a corollary, "The size of a staff bears no relation to the work to be accomplished," expresses the core of the tax protesters' argument that eliminating tax revenue is the only way in which government waste can be eliminated.

Foundation analysts believe the debates will continue, not only to election day, but will go on thereafter regardless of the outcome of the election. Whatever the result of the voting, the result appears sure to be painful to the losers, and could be acutely painful to those directly affected by program cuts if the initiatives are approved.

"Many Utahns believe that even if the tax protest fails, it will have rendered the state a valuable service by focusing the attention of elected officials and government workers on the need for greater economy and efficiency in state and local government operations," the foundation report concludes.