Gov. Norm Bangerter said Tuesday he will call a special session of the Legislature June 15 to consider a tax cut that could refund as much as $70 million to Utah taxpayers.
"I fought hard to get the revenue when we needed it, and I will fight as hard now that revenues are up to make it equitable," Bangerter told reporters.Previous estimates from the state Tax Commission placed income tax revenues at $25 million beyond what had been budgeted during the last legislative session.
The new figures, although not yet final, are nearly three times that amount, which might be enough to justify actually rebating the surplus rather than giving back in the form of a tax credit on next year's returns.
"It appears we could do that (rebate the money)," the governor said. "But we'll have to look at the benefits and costs."
Reed Searle, the governor's chief of staff, said the Tax Commission might be able to have refund checks in the mail as early as August if the governor and the Legislature decide to go that route. He said the cost of cutting checks and mailing them would be about 40 cents each.
Searle said that although most people's refunds would only be $20 or $30, they would likely spend the money immediately, which would give the economy an infusion of cash. He also said the state would recover much of the money spent through sales and other taxes.
The Legislature passed a law last session to reduce income tax rates if revenues were sufficient. But Bangerter said that law contemplated a much smaller surplus and he believes that the $50 million to $70 million surplus now envisioned requires broader measures. He also believes action must be taken before next January's session.
"Taxes should not only be cut, but they should be cut as soon as is practical and possible," Bangerter said. "This will take the money off the table and lessen the impact of special-interest groups who will demand that it be spent rather than returned."
Bangerter said he and his income tax force will meet with legislators over the next six weeks to come up with tax cuts that would be fair and equitable. He said he wants a permanent rate reduction as well as a return of the current surplus.
He also said he will give careful consideration to resurrecting the federal exemption, which allowed Utahns to deduct their federal tax from their state tax. Bangerter said returning all of the federal deduction would cost the state $90 million to $100 million, but he said returning the deduction could be done in part or not at all.