Legislators apparently do not want to return a $73.6 million income tax surplus by sending out rebate checks, a possibility suggested by Gov. Norm Bangerter.

Republican and Democratic caucuses searched instead Wednesday for other ways to return the tax money - such as allowing deduction of federal tax on state returns. They said that would appear less like election-year grandstanding.Bangerter has said he will call a special session next month to deal with how to return the surplus, which the State Tax Commission now estimates at $73.6 million - plus or minus $8 million.

In the Democratic caucus, House Minority Leader Mike Dmitrich, D-Price, led a barrage against Bangerter's suggestion about a possible rebate.

"It's a totally political maneuver tied to a Dan Jones poll that shows him down . . . . I think the intent of the governor is to have a rebate check in hand (for taxpayers) before the elections in November."

He also complained about estimates from Bangerter administration officials that the surplus will allow a rebate averaging between 10 and 15 percent of each taxpayer's return - or about $130 each.

But Dmitrich warns that such averages "mean some of us won't get anything, while others will get $10,000 or $15,000 checks."

William Asplund, assistant director of the Office of Legislative Research and General Counsel, said Dmitrich may not be exaggerating. Asplund figures that a small number of people in the state - 50 to 100 - pay enough in taxes that their rebates really would be $15,000 or more.

Dmitrich also said a special session isn't needed because the Legislature already passed a bill this year to reduce income tax rates if a surplus occurred. That law, if unaltered by the special session, would cut taxes charged in the top tax bracket from 7.75 percent to 6.9 percent.

Republicans, however, say the special session is needed because the new law deals only with the highest tax bracket and was designed with a much smaller surplus in mind.

While several House Republicans spoke in their caucuses in favor of a cash rebate this year, more said a rebate could turn into a boondoggle, making the Legislature look "even more incompetent," as one Republican put it.

Concerning a rebate, Rep. Craig Moody, R-Sandy, who is also the Republican State Party chairman, said: "I worry about the message it sends. We're not going to get a big spurt in the (economic) market with a $20 rebate, or even a $1,000 rebate." Others said a rebate before the Nov. 8 election would be seen as a blatant political move, unworthy of the Legislature.

House Majority Leader Nolan Karras, R-Roy, again suggested that a refund on the 1988 state tax return is the best way to give back the 1987 surplus. Since there are real needs in education, Karras suggested that taxpayers who don't want their refunds could check a box and the money would go to education.

He warned that a rebate could be a headache. "What about the kid who paid $3 in state tax? Do we cut him a check for 30 cents and have everyone laughing at us for doing that?"

While many Republicans also favor returning the surplus by allowing taxpayers to deduct the federal income tax they pay, Democrats complained that would help the rich more than those with moderate or low incomes.

Rep. Grant Protzman, D-North Ogden, said allowing the deduction of federal tax would only give a return of 10 to 11 percent of taxes that people in the $10,000 to $30,000 income range paid. But people who earn more than $100,000 would receive about 18 percent.

"The average person may say do this because it will save me 10 cents on the dollar I paid, but if he realizes that it saves 18 cents on the dollar for his wealthy neighbor living on the bench, he may not be so hot for it," Protzman said.

Protzman said if Republicans insist on returning the surplus by allowing deduction of federal taxes, Democrats should at least push to make that a tax credit instead - which he claims would affect all income brackets more equally.

Protzman urged Democrats to push for other ways to return the money, such as doubling the income required to meet each bracket in the state tax system.