This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Gov. Jon Huntsman Jr. hopes to take advantage of Utah's second consecutive year of $1 billion-plus surpluses to finish an overhaul of personal income tax that would lure more than half of taxpayers to a 5 percent flat tax system.
The shift would involve a complicated mix of tax credits and a rate reduction of the flat-tax option approved earlier this year. In the end, the proposed change would mean a $100 million tax cut.
"I'm comfortable in using $100 million to complete the reform of the income tax," Huntsman said, saying he will attack other problem areas of the tax code later in his administration.
"You just can't do it all in a year," he said. But with an expected 60 percent of Utahns filing under a 5 percent flat tax, "We have something akin to what the tax advisers were arguing for."
The governor's first attempt at a flat tax was criticized because it only benefitted the wealthiest 5 percent of Utahns. His new plan would focus more of the benefit on lower-income residents.
Huntsman believes the 5 percent rate will lure wealthy executives and their companies to Utah. That in turn, the argument goes, will keep the state's economy roiling to produce ever more tax revenues.
But Republican House members made it clear Tuesday that in light of a $1.6 billion surplus, they want Huntsman's $100 million tax cut at least tripled.
After an all-day caucus, the GOP House countered the governor's budget with a three-part spending framework: $300 million in tax cuts, $300 million in new education spending and $100 million for buildings.
House Speaker Greg Curtis said the House did not discuss details in education spending or how to cut $300 million in taxes. "We didn't put a lot of meat on the specifics," Curtis said "We want to let the committees do their work."
The governor's proposal, however, did not include the removal of the remainder of the state sales tax on groceries that the House pushed through last year after a clash with the Senate. Curtis said the omission disappointed him.
"I still feel strongly about it," he said, but, "I didn't try to drive the caucus on it. I didn't want to throw the gauntlet down with the Senate."
The governor's $10.7 billion budget issued Tuesday, of course, is only a spending road map. It will be up to the Legislature to produce a state budget in the session beginning Jan. 15. During lawmakers' 45-day blitz, Huntsman's goals and dreams will go through the legislative equivalent of a Cuisenart. Already, conservatives are complaining that Huntsman is expanding government too fast.
Huntsman said he increased the size of the state work force by less than 2 percent. Rep. Greg Hughes, chairman of the Conservative Caucus, said he has yet to calculate an exact number, "Let's just say the number is astounding."
Though education is the "heart and soul" of the proposed budget, Huntsman also used the surplus to address issues ranging from rebuilding bridges to saving methamphetamine addicts.
He calls for a $5 million anti-meth awareness campaign and more addiction treatment slots for women with children. "Some are going to say this is too much," Huntsman said. "But it's a graphic problem - we need a graphic solution."
The budget proposes $3 million to permanently restore so-called "optional" vision and dental care for adults on Medicaid. Legislators bent on containing soaring Medicaid costs refused to consider a similar proposal last year and it became one of the most emotionally charged issues on the Hill.
The governor said he remains committed to wringing savings from Medicaid, but stressed, "I'm not about to leave our neediest population behind as we talk about efficiencies."
The governor also proposes investing $9.2 million to reduce Utah's growing ranks of uninsured. The money would be used to expand the Children's Health Insurance Program (CHIP) and broker discounted coverage for small businesses.
In transportation, the budget would provide $100 million to eliminate highway "choke points" and another $40 million for bridge repair.
Huntsman would spend $20 million to preserve Tabby Mountain as a recreation area in Duchesne County.
And $13 million to mitigate the impact of mineral and oil extraction.
Nor does the budget ignore the needs of state workers, who Huntsman fears have "second-class" compensation. He would use $45 million for a 3.5 percent cost of living increase and give managers the power to hand out 2.5 percent discretionary adjustments to retain key employees.
"We have burnished it. We have vetted it," Huntsman said of his budget. "We are going to do everything we can to make sure it is still standing at the end of the process."