Gov. Norm Bangerter Wednesday formally called Utah lawmakers into a July 5 special session to give back $80 million in surplus income tax revenue - and also to deal with the controversial problem of repaying losses suffered by depositors of several failed thrifts.
Bangerter, speaking in a morning news conference in the Governor's Mansion, said he hasn't yet had time to fully review the recommendations on the thrift problem suggested by a special task force he appointed. (see accompanying story).But it was clear from his comments that he doesn't totally accept the task force's recommendations.
"I will make specific recommendations of my own on the problem before the special session," Bangerter said. "The taxpayer shouldn't accept all the responsibility (for the depositors' losses), but the state should be part of the solution."
Bangerter said he wouldn't promise taxpayers that money used to solve the problem would be repaid, only to see part of it lost to depositors and not repaid.
Task force members suggest that the state bond for $67 million, buy assets from the failed thrifts with the money and, thus, make good the depositors' savings. Bangerter said the state has already spent $5 million buying thrift assets, "of which we will probably only get half of it back." So the state has already donated $2.5 million to the cause. Francine Giani, Bangerter's press secretary, said the governor may be willing to "put in a small amount more (above any bonding) that we figure we won't get back."
But any bonding money must be repaid by the assets, the governor believes. "I don't want to promise the taxpayers that we're bonding to pay for something just to find out later that we come up $10 million short on the assets," he said. Pressed on the subject, Bangerter said he doesn't think there is $67 million worth of solid assets to be purchased with the bond money.
"I don't think we could bond for $67 million and get it back," Bangerter said. "I don't oppose the depositors getting all their money back. But I have reservations about the state assuming all the liability. Everyone should share in that - the depositors, the attorneys, the accountants, all third-party players." The governor declined to say how much he'd be willing to kick into the settlement deal, via bonding or through the use of any other taxpayer money. He will study "updated and reliable" figures on thrift assets before making that determination.
The thrift problem will likely be the most hotly debated in this election-year special session; depositors have organized politically to get what they want from lawmakers. But returning the $80 million to taxpayers and permanently lowering the income tax rates will affect more people.
Bangerter suggested several weeks ago that the $80 million go back in the form of cash rebates before the Nov. 8 election and that income tax rates be cut by 12.5 percent. His Democratic opponent, Ted Wilson, called the move "crass politics," even though Wilson supports returning the money to taxpayers.
The state has an estimated $110 million surplus this year. Bangerter wants to return all but $4 million of the income tax surplus to taxpayers. The average check would be about $140. The rest of the surplus would go to education or into a "rainy day" fund.
There are 10 other items on the original special session agenda. But Bangerter said he'll make public other items - like AIDS legislation that he vetoed after February's general session - and take public comment before deciding if he'll add them to the call.