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Legislators, guv chip away at 2006 budget disputes

SHARE Legislators, guv chip away at 2006 budget disputes

Their joint press conference was replete with sunshine and smiles. But legislative leaders and Gov. Jon Huntsman Jr. still face a daunting amount of work to resolve budget disputes before the 2006 Legislature ends on Wednesday.

As first reported by the Deseret Morning News, GOP lawmakers and the governor have compromised on a $160 million tax-cut package that includes slicing 2 percent from the state's 4.75 percent share of the sales tax on food purchases.

Also announced Friday were agreements boosting per-pupil

spending on education by another $20 million and setting aside $90 million for roads, $8 million for water projects and another $22 million for legislative committee priorities.

"This is a session for the history books," Huntsman said. Still, the governor acknowledged the estimated $9.6 billion state budget is far from finished. "We still have ahead of us negotiations about a lot of money," he said.

A long list of needs fighting for a piece of more than a half-billion dollars in unbudgeted one-time surplus funds range from new technology centers on university campuses to assistance for the disabled.

Hundreds of millions of dollars in building requests, transportation projects and other infrastructure proposals are still pending. Targeted education programs, such as beginning teacher bonuses or all-day kindergarten, continue to be debated.

And even though the contentious issue of taking the sales tax off food — which pitted the governor and the House against the Senate — has been settled for now, both supporters and opponents expect to pick up the debate next session, if not sooner.

What is finished is the framework for a $160 million tax-cut package, thanks to a compromise reached Thursday. The deal calls for a 2 percent cut in the state portion of the sales tax on food, a "flatter" 4.95 percent income tax with limited deductions and exemptions, and five targeted business tax cuts totaling $20 million.

The compromise also calls for on-going funding of $90 million for transportation, $20 million to give a 1 percent boost to schools' weighted pupil unit, and $8 million for water resource development. An additional $22 million will also be returned to the appropriations subcommittees, meaning that $78 million is available to fund their specific priorities.

Because of the compromise, which was announced by Huntsman and leaders from both parties in the House and Senate, the Legislature will probably be able to resolve all of its lingering issues during the general session.

Earlier this week, it seemed possible, even likely, that legislators would end the session without a budget compromise and would be forced to go to a special session called by the governor.

House Speaker Greg Curtis, R-Sandy, said a lot of work had actually been done Friday regarding the $78 million in on-going money and $548 million in one-time money that legislators need to budget, some during closed-door caucuses.

Typically, the Legislature attempts to finish budget negotiations by the last Friday of the session so staff has enough time to draft a budget bill for passage during the final three days. Curtis said that won't happen this session, but there will be a budget.

"We're going to get this wrapped up by the end of the session," the House speaker said. "We still have plenty of work, but we have been talking with the governor and our caucuses."

Curtis said he thinks that the Utah Science and Technology Research Initiative will get close to the $15 million in on-going funding proposed by Huntsman, as well as $50 million for buildings. He also said that funding the disabled waiting list, at least partially, will happen, as will some of the education enhancement programs.

Senate President John Valentine, R-Orem, whose caucus staunchly opposed removing any portion of the sales tax from food, said that there were still concerns about the long-term impacts of cutting it.

He even cautioned that future legislators may be dealing with financial problems caused by this "emotional" issue. "We have a base, and we have a system we have to operate," the Senate president said. "We have to very careful."

But Curtis, who drove the proposal to remove the sales tax from food throughout the session with backing from Huntsman, said that he hopes to be dealing with the issue again next year — so that lawmakers can remove the rest.

"Removing the sales tax off food is an emotional issue, but it's one that is very important to me," Curtis said. "But if most of the rest of the country can do this, we should be able to do it."

Huntsman campaigned on the issue and brought it up again in his second State of the State address last month. The governor asked lawmakers then to "rally together once and for all and remove the sales tax on food."

One of the most vocal advocates for taking the sales tax off food, Linda Hilton of the Coalition of Religious Communities, was tearful as she thanked both Curtis and Valentine for the compromise.

"We wanted it all (off)," Hilton said. "We still do. But this is more progress than we've made in decades." Still, she said, advocates of removing all of the sales tax aren't giving up. "We'll be back," Hilton said.

Sen. Curt Bramble, R-Provo, who wanted to give poorer Utahns an income tax credit toward the estimated $75 per person spent annually on sales tax on food, said lawmakers chose to "just do a one-time reduction and let future legislatures continue to wrestle with it."

E-mail: jloftin@desnews.com; lisa@desnews.com