For the past several years, state tax revenue has grown in the neighborhood of $200 million a year. Now some GOP legislative leaders are thinking about splitting that pot up into new tax cuts, class-size reduction and maybe a little for transportation needs.

Gov. Mike Leavitt, who is now putting together his budget recommendations for next year and planning his December "growth summit," may not go along with the Republicans' plan. But they seem determined anyway."It's time to do something in a big way on class-size reduction. A major effort," says House Assistant Majority Whip Kevin Garn. He wants to put between $25 million and $40 million into reducing the number of students in crowded grade schools. "Now, we're putting $3 million to $5 million a year into class-size reduction, and it's just not doing the job."

Garn couldn't say how many students would be reduced per class with a $40-million hit. He wants to give school districts "complete flexibility" to spend the money to achieve the best results. For some districts, that might mean building a new grade school. Others may hire more teachers and use empty or portable classrooms. "The key to success is flexibility. Let the districts decide the best way," said Garn. The money couldn't go into teacher pay. That is one restriction, he added.

Of course, the program is ongoing, and so whatever was put in in the 1996-97 budget would have to be put in again the next year, the year after and so on.

Garn says he has the support of other GOP legislative leaders. "Ihaven't discussed it yet with the governor," he added.

While Garn is looking at education, other GOP leaders are also looking at tax cuts with some of the new money. "No consensus has come together on which tax should be reduced," said one leader who didn't want his name used.

In 1995, lawmakers cut the state-mandated property tax by $90 million. That reduced the property tax going into the Uniform School Fund to about $185 million. If $90 million were cut next year, then if revenue growth remained strong in fiscal 1998 the final $90 million could be cut and property owners would have had significant cuts over three years. The political benefit - besides lowering property tax - would be that the state would in effect be out of the property tax business, and as revenues from the unpopular tax naturally rise with real estate prices, political blame would fall on local county, city and school district officials who still depend on the tax, not on legislators.

Several GOP lawmakers and one Democrat are already drafting bills that would remove, in phases, the sales tax from food. That's another option, GOP leaders said.

The state has $2.7 billion in unfunded transportation needs, including spending $1 billion on widening I-15 in Salt Lake County. Leavitt has said before that part of any transportation funding mix will likely include one-time state surpluses on some ongoing state revenue.

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Garn says that may be, but that Leavitt shouldn't plan on taking the bulk of one-time monies or the $200-million in growth for transportation. "We have to raise the gasoline tax and other (transportation-related) fees" - such as vehicle registration fees or other items - to raise most of the money for new roads, said Garn.

Ken Bullock of the Utah League of Cities and Towns says a working group of city and county officials have come up with a recommendation for the growth summit "of at least a 5 cent per gallon" increase in the gas tax. That would raise the tax from 19 cents to 24 cents a gallon and bring in about $50 million more each year. City and county officials also want the state/local gas tax split to change from the current 75 percent to the state/25 percent to local roads to a 70/30 split. "We local officials will definitely have concrete recommendations for the summit," said Bullock.

State government has been growing faster than Utahns' personal income and the state's population. And Utahns bear a heavier tax burden - based on their ability to pay - than residents of any other Western state.

That understood, general tax cuts need to continue and drivers - those who use the roads - need to pay more to fix and expand the roads, several GOP leaders said.

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