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New Revenue Estimates Won't Affect Tax Cuts

New Revenue Estimates Won't Affect Tax Cuts

Estimated read time: 2-3 minutes

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SALT LAKE CITY (AP) -- The state's $1.6-billion surplus has grown an extra $149 million according to revenue estimates released Tuesday, but state lawmakers say the source of much of that money is so volatile they'll have to spend it as if they can never count on it being there again.

As a result, the newfound money won't be part of the equation lawmakers use when they negotiate a tax cut that could range from $110 million to $300 million.

"My strong recommendation to leadership, and I think leadership agrees, is that this new ongoing revenue be treated like one-time money. It really concerns me to build that into budgets," said Senate budget chairman Lyle Hillyard, R-Logan.

Of the $149 million, $77 million is considered "ongoing" revenue, or money that comes from sources financial analysts say usually can be counted on to be there in future years. That's the money lawmakers work with to offer tax cuts and to hire new personnel, such as teachers. Income tax is typically seen as the most predictable of those revenue sources and is used to pay the bill for education.

But the most of the new revenue that lawmakers are working with comes from corporate income and investment taxes. Since 2001, there have been major shifts -- as much as a 33 percent increase one year and an 84 percent decrease in another -- in corporate income taxes.

Senate President John Valentine, R-Orem, said the Senate would likely look to spend the money on transportation, new buildings and education, although no formal decisions have been made.

While lawmakers are still working on a compromise for how much residents will be taxed, another bill is making its way through the Legislature that would delay the date tax payments are due. Senate Bill 266, sponsored by Sen. Wayne Niederhauser, R-Sandy, would extend this year's filing deadline to April 17. That would bring it in line with the federal deadline.

The traditional tax filing deadline, April 15, falls on a Sunday this year. Additional, the District of Columbia declared April 16 a public holiday, which requires the Internal Revenue Service to extend the filing deadline to April 17.

The D.C. holiday commemorates the day in 1862 that President Lincoln signed the District of Columbia Compensated Emancipation Act, ending slavery in the District and freed more than 3,000 slaves.

The Senate bill has the support of Gov. Jon Huntsman and is expected to have no opposition.

------ On the Net: Utah Legislature

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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