Utah Gov. Herbert proposes no new taxes in budget

AP News
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Posted: Dec 11, 2009 3:22 PM

Utah Gov. Gary Herbert's proposed $11.3 billion budget doesn't include any tax increases, but he isn't promising to veto a budget that includes them.

Herbert released his budget recommendations Friday, saying an economic recession is the worst time to raise taxes or fees that could stunt economic development as the state tries to crawl out of one of its worst-ever downturns.

"A tax increase at the present time would be just absolutely the wrong thing to do," Herbert said.

Some lawmakers have said they would like to raise the sales tax on food, fuel and cigarettes, among other things, to make the state's revenues more stable and discourage smoking.

While Herbert makes recommendations, ultimately the Legislature writes the budget.

House Speaker Dave Clark, R-Santa Clara, said tax increases will be part of the conversation when lawmakers convene in January.

"All of that is still on the table," Clark said. "For me, personally, tobacco is first on the list."

Herbert said he would have ongoing negotiations with the Legislature and that it's too early to talk about possible vetoes.

"I think what is going to become apparent to hopefully everybody is that we can get through this without a tax increase," Herbert said. "We can always raise taxes. It's not like if we don't do it today, we can't do it tomorrow. So tax increases probably are appropriate at certain times, this is just not one of them."

Herbert's budget proposal is slightly less than the spending plan legislators approved earlier this year.

That budget depended heavily on federal stimulus money that won't be available next year to make ends meet. To cover some of that, Herbert is tapping into the state's rainy day fund, planning on bonding for some road construction and counting on the economy to improve.

"I believe that as we look forward there is a sense of hope and optimism," Herbert said. "I think there is in fact daylight at the end of the tunnel."

Herbert is ordering every state agency to cut its budget 3 percent until July. Herbert said department leaders would decide where and how to cut costs, leaving the possibility of layoffs or furloughs for state workers.

While Herbert held off making any cuts to public schools, he isn't providing any funding to account for an expected enrollment growth of 11,000 students, so the country's largest class sizes will get even bigger next school year.

The budget year begins in July.