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Don't spend `iffy' surplus- yet

Remember the rainy day.

A projected state surplus of $200 million next year has some legislators talking tax cut. But the wise ones are saying wait and see.Legislative leaders and Gov. Mike Leavitt agree it is premature to begin serious talk about what to do with $200 million that may or may not actually materialize. The figure is a projection cooked up by the Legislative Fiscal Analyst's Office. It is a mythical, dynamic number helpful for planning but should not be taken to the bank.

Even if the money does materialize, it may be devoured by pressing highway needs, depending on the still uncertain outcome of federal funding.

With the surplus spawned by a continued strong economy, one idea altruistic tax-cutters may consider is reducing or eliminating the food tax. This page repeatedly has called for a repeal of this regressive tax that unfairly penalizes those on lower incomes. Economic conditions in Utah have improved markedly, making removal or lowering of this tax feasible.

Taxing grocery items penalizes poor and struggling families more than any other population segment. Eating is a habit shared by everyone. Because the tax is levied as a flat percentage, those with the smallest incomes wind up paying a larger share of their dollars than those better off.

Dropping the tax on groceries may sound extreme but is not. Thirty-one other states have no tax on food. A recent survey indicated Utahns, based upon their ability to pay, are the most heavily taxed citizens in the West. Reducing or scrapping the tax on groceries would be a significant positive step in lightening that burden.

But even if that course is pursued - and we would recommend it - the Legislature and governor would be wise to ride the current optimism into next year before taking action. It is too early to know if a $200 million pot of gold really lies at the end of the prognosticator's rainbow. Such windfalls have ways of disappearing - if they ever truly exist at all.