Utah lawmakers met in special session Tuesday, with the majority Republicans hoping to pass Gov. Norm Bangerter's $80 million income tax rebate program and adjourn by evening.
Tuesday morning, the governor asked legislators to approve that measure - opposed by Democratic members - and not to act on the matter of repaying depositors of the failed thrifts and loans for their losses.Even though Bangerter put the thrift problem on the special session call a week ago, he told House and Senate members they shouldn't act until a settlement could be reached with the depositors.
Last week Bangerter met several times with attorneys for the depositors. But as of Tuesday, no settlement had been reached. Bangerter made it clear that he's trying to get the state's insurance carrier to come up with some cash and get the so-called third party members - the former owners of the failed institutions and their insurance companies - to contribute money also.
Bangerter said he wouldn't oppose a resolution from the Legislature giving its opinion on how the thrift problem should be handled. But GOP leaders in the House and Senate didn't seem interested in doing even that.
Most legislators were glad to see the thrift issue disappear, at least for now. The depositors have organized politically, and in this election year any action by the Legislature could anger one side or the other.
The real debate is over the estimated $110 million surplus and what to do with it. The halls around the chambers were packed with lobbyists, especially edu-cators and Social Service advocates, each pushing for a larger slice of the surplus pie. (ee related story on A2.)
Meanwhile, the National Education Association, voting at its national convention in New Orleans Monday, voiced support for its Utah members by urging Utah legislators to funnel some of the tax surplus into teacher salaries.
The 8,000 delegates to the national association's policy-making body called for the Utah Legislature to give $18 million from Utah's $110 million surplus to Utah teachers, who haven't had a raise in three years. The $18 million would give Utah teachers a 2.5 percent
Utah delegate Marilyn Wright, a Jordan School District teacher, said the NEA support was far from a routine action. "We were given very little hope of getting the resolution (f support) to the floor." But after UEA executive director Jim Campbell explained what it wanted, the delegates voted unanimously to hear the resolution, she reported.
Wright said her fellow teachers had previously heard how Utah measures up nationally but not about the surplus. "The reaction on the floor was one of shock that there is a surplus and that education isn't the number one priority," she said.
But Republican legislators have already taken caucus positions in favor of Bangerter's tax surplus plan, which Democrats oppose.
In speeches before the House and Senate, Bangerter reiterated his desire to return $80 million of the estimated $84 million income tax surplus via cash rebates this summer.
He also wants $10 million to go to education and $20 million to be placed in the state's "rainy day fund" to be used in case of emergencies.
In the rebate, Bangerter wants to give back 12.5 percent of a taxpayer's 1987 state income tax bill or $10, which ever is greater. In his prepared text, Bangerter said the average refund for a couple filing jointly will be $205.
"Each check will cost the state about 50 cents to calculate, print and mail," Bangerter said. He assured lawmakers that no money would be inadvertently lost to the state because the state's "Gotcha" program will identify those who owe the state money from past years and automatically take that out of any rebate check.
To take care of the estimated ongoing surplus, Bangerter wants to reduce state income tax rates by 5 percent and restore a third of the deduction for federal income taxes paid. That deduction was eliminated last year and a number of Utahns saw their state income tax go up accordingly.
Democrats don't like the rebate - they prefer a credit on 1988 taxes - and they don't like restoring any of the federal deduction, saying that is an unfair giveback that benefits wealthier Utahns.
They want to see some of the ongoing surplus go toward lowering the state sales tax. Bangerter said Tuesday morning that he's willing to consider a sales tax cut, if that is what most lawmakers want.
"He's staying open on that," said Francine Giani, Bangerter's press aide. "We want to give the money back; that's what we promised. If they (egislators) want to go the sales tax route, we'll talk."
However, Republican leaders want to get out of the session by Tuesday evening. The calculations for the income tax rate cut are firm. Shifting part of the ongoing surplus to the sales tax could muddy the issue, they said.
Just before noon Tuesday, both the Senate and House caucused to talk about the dozen issues on the official special session agenda, as well as any others they may ask the governor to place before them.
"I think the income tax thing will be resolved fairly quickly," said Sen. Lyle Hillyard, R-Logan, co-chairman of the Executive Appropriations Committee. "The governor's plan will fly here (n the Senate). What else may come up? We'll see."