Pressure is growing for Republican and Democratic legislators not to give a cash rebate this year of part or all of the estimated $75-million state surplus.
And Gov. Norm Bangerter will even entertain the thought of keeping some of the surplus for educational needs, a spokesman for the governor said Tuesday.Lawmakers meet in an interim study day Wednesday, and both the Republicans and Democrats will caucus to discuss the special session Bangerter wants this June or July to deal with the surplus.
Bangerter and others have talked about refunding or rebating the money. If lawmakers acted quickly, checks could be in taxpayers' hands before the Nov. 8 election.
But resistance to that move - seen by some as a political ploy to help the beleaguered governor's re-election effort - is building.
House Minority Leader Mike Dmitrich, D-Price, and House Majority Leader Nolan Karras, R-Roy, both said Tuesday that rebates are a bad idea.
Dmitrich, understandably, is more critical of the idea than Karras. Karras and Dmitrich favor staying with the current law, which says that any surplus will automatically be returned as a credit on 1988 taxes due in April 1989.
But Karras believes Republicans in the House and Senate want to return the deduction for federal taxes paid to state income tax returns, a deduction that was removed last year much to the displeasure of more well-to-do Utahns. Dmitrich doesn't want that deduction returned.
Reed Searle, Bangerter's chief of staff, says the governor is open to the possibility of keeping some of the $75 million-plus budgetary surplus for use in education.
However, the governor is a man of his word and he still believes he should make good on a promise to return any unbudgeted surplus, Searle said.
"There is a growing willingness, especially after what happened with the Jordan School District (which faces a $4 million shortfall), to use some of the surplus for education," Searle said Monday. "We're getting a lot of letters and comments to that effect. But the governor made a promise that if there were more revenues, he would give it back."
Karras said GOP legislative leaders are talking about leaving the current refund-credit law in effect. But they still want a summer special session. In the special session lawmakers could move to place two items before voters in November, said Karras: One, ask if part of the federal deductibility be returned to state income tax returns - "That will take care of ongoing surpluses in the income tax" - and, two, ask if some kind of tax limitation or growth in government spending should be enacted.
"Putting those two items on the ballot will give an outlet to voters angry over tax increases, an alternative to the drastic tax protesters' positions," Karras said.
Also in a special session, lawmakers could amend the current refund-credit law to give taxpayers the option of giving their own personal refund to education.
"We could have a check-off box. If you wanted your refund back - and they will average $130-$140 - you don't check. If you want to give it to education - and we'd promise that most of it would go to your own local school district to buy computers or textbooks or other capital items - then you'd check the box," Karras said.
Searle said the governor is receptive to those ideas, but he's not about to lead the charge this time as he did with the record $160 million tax increase in 1987. Rather, the governor will be sure there is a solid consensus before he proceeds with the special session.
Dmitrich doesn't want a special session at all, he told members of the Salt Lake Area Chamber of Commerce. He especially doesn't want to return the deduction on state returns for federal income tax paid. That deduction, eliminated for the first time on the 1987 returns, means greater tax breaks for well-to-do Utahns than for poorer Utahns. "For every $1 paid in federal tax for a wealthy person it means a 30-cent write-off on the state return. But for a poor person, every $1 paid means only a nickel in state savings," Dmitrich said.
"Let the voters decide the federal deductions. We can put that on the ballot this November," Karras said.
Dmitrich said Democrats - who have enough votes in the House to filibuster any Republican plan - favor giving a sales tax deduction on state returns rather than restoring the federal income tax deduction. To get at the question of a head tax on students, Dmitrich said the standard deduction could be increased and the personal exemptions decreased. That would make families with children pay more income tax than families of equal income who have no or few children: the goal of head-tax proponents.