Few issues remain for 'big bucks' Legislature
Bob Bernick Jr.
The 2005 Legislature will likely be remembered, if remembered at all, as the year of the big bucks.
Last December, lawmakers learned they had nearly $500 million more in one-time surpluses and estimated new tax growth in the current year and in fiscal 2005-06, which starts July 1.
Then a week ago, updated revenue estimates for this and next year jumped that total to about $600 million.
Never before in the state's history has the part-time Legislature seen so much new money.
They spent most of it and decided along the way not to give a general tax cut to Utah residents.
As this column is written, the only significant tax break will likely go to corporations, who will get the option of figuring their state income taxes two different ways, resulting in about a $7 million combined tax cut to some Utah businesses.
Still to be decided is whether legislators will adopt a measure desired by Gov. Jon Huntsman Jr., to phase out the 5 percent corporate income tax. That phase-out, 1 percentage point off a year starting in two years, would not fiscally impact the $8.6-billion budget lawmakers are now finalizing for next year.
Huntsman says he will re-energize the state's economic development efforts so greatly that he can make up that lost revenue by growth in other taxes — such as personal income and sales.
Huntsman adds that if it appears public school funding is suffering, in 2009, 2010 or so, legislators can just stop the phase-out. He could even call them into a special session midyear if need be to stop the bleeding of public education monies if his economic development efforts fall short.
The governor wants the phase-out adopted now so he can use the measure as a tax incentive plea in luring new business here or persuading Utah businesses to expand their operations.
While some other states either have never had a corporate income tax or are reducing their businesses taxes to attract new commerce, Utah remains at the back of the pack in per-student funding. Perhaps 140,000 new school kids will be coming into the system over the next decade. And Democrats and a few GOP moderates alike are asking if it makes any sense to set up a system that would cut public school funding.
Besides that, doesn't it make sense to ask all Utah taxpayers, big corporations included, to pay a fair share of taxes, especially for educating the young workers businesses need, some legislators argue?
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