Deseret Morning News graphic

Despite nearly record tax surpluses coming into state government, most Utahns don't want a tax cut next year, a new poll shows.

Rather, they want the money spent on current state programs, pollster Dan Jones & Associates found in a survey conducted for the Deseret Morning News and KSL-TV.

But if the tax surpluses "at this significant level" keep coming as the 2006 Legislature approaches next January, says House Speaker Greg Curtis, R-Sandy: "I'll be leaning toward a tax cut. This is really healthy revenue growth."

This past week, the Utah State Tax Commission said that the state is running a $162 million revenue surplus in the state's two main funds, which are used to pay for all kinds of things, from public and higher education to human services to public safety.

The state's transportation fund has another $11.25 million surplus, the commission said, with only another month to go in the state's fiscal year.

That's on top of an estimated $285 million in extra money that legislators reallocated in the current year's spending during their 2005 general session in February.

If these revenues hold up, the state could end fiscal 2005 on July 1 with nearly half a billion extra dollars. And if the cash cow continues to give, new surpluses will build throughout fiscal 2005-06 as well.

All that cash is good news, for it shows a rebounding and robust state economy, commission tax economists say.

But as of now, Utahns don't really want tax cuts next year, Jones found.

Sixty-three percent strongly or somewhat favor spending the extra money on state programs such as education, road construction and health care for the needy, Jones found in a survey conducted May 31-June 2.

Twenty-nine percent strongly or somewhat favor tax cuts, the survey shows.

Tammy Kikuchi, spokeswoman for Gov. Jon Huntsman Jr., said Friday that for now Huntsman doesn't advocate a tax cut next year.

"We are hopeful" that the current surplus will be reflected in tax revenues starting July 1. "But we don't know."

From the current surplus, big chunks by law must go into two separate Rainy Day funds, leaving less on the table for lawmakers and Huntsman to divvy up in the 2006 Legislature, she noted.

Several legislators involved in the huge tax reform study being conducted this summer and fall have said before that with so much extra money coming into the state, tax reform should also include tax cuts. Otherwise, pressure will just build for state government to grow excessively, something some conservatives don't want.

In addition, various Tax Reform Task Force members have talked about restructuring the corporate income tax to cut taxes by maybe $50 million or $80 million a year. And they've discussed eliminating one of the gross receipts taxes on big electrical generators, cutting their taxes by upward of $13 million a year.

But Kikuchi said Huntsman, who has advocated eliminating the corporate income tax as a means of economic development, doesn't favor cutting any other general taxes as part of the reform effort.

"It's too early. We want revenue-neutral tax reform," meaning that as taxes are raised or reduced on this or that section of society in the reform effort, overall the state would take in roughly the same amount of cash next year.

"And the tax reform effort should take into account" any higher tax collections, she said.

"Right now we can't look into a crystal ball and see" how taxes may come in six months or a year. "We don't know if we'll see these" tax surpluses in the near future, Kikuchi said.

True, said Curtis. "And it's amazing how tax revenues can ebb and flow. We'll have to wait until the December revenue estimates" used to begin the state's yearly budgeting process. "But it's getting closer and closer" to a level of extra tax revenue where tax cuts must be considered, the speaker said.

Huntsman, a Republican who doesn't face re-election until 2008, is politically safe to keep his extra taxes, at least for now, the poll shows.

Jones found that Democrats greatly favor spending the extra money on state programs, with 82 percent favoring that option over tax cuts.

But even most of those who told Jones they are Republicans want the extra taxes spent on state needs, not returned next year in lower taxes. Fifty-six percent of Republicans say "no" to tax cuts.

All 75 House members and half of the 29 senators face re-election next year, and tax cuts in February may be remembered by voters in November 2006. Historically, tax cuts have come in legislative election years.

When lawmakers got an update on burgeoning surpluses last month, House Minority Leader Ralph Becker, D-Salt Lake, said there are a number of areas that are currently being underfunded.

Just one example, said Becker, is in public education testing, where school administrators and teachers need help to bring up basic levels of math, science and other critical areas.