GOP Brass Cobbles Together Plan to Balance the Budget

Utah to cut Medicaid circumcisions

Republican leaders of the Utah Legislature have come up with a budget-balancing plan that relies on a raft of spending cuts and selective tax increases.

The new draft plan released Tuesday proposes eliminating sales tax breaks for newspapers, cable and satellite television services and roadside fruit stands. Those hikes would generate $10.2 million.

Also being floated as part of the shortfall-plugging package are the $2.1 million in increased revenues from imposing a tax on the state's largest credit unions, $5.3 million from hiking taxes on hazardous and low-level radioactive waste, and $8 million from a plan to salvage the state inheritance tax even as the federal estate tax is phased out as part of the Bush tax cuts.

After 24 months of budget cuts, we've dealt with shortfalls of $630 million and we're really down into muscle now, said Senate Budget Chairman Leonard Blackham, R-Moroni.

Something has to give, said Blackham, adding the proposed tax increases and fee hikes are, taken as a whole, pretty modest. If we don't do something, education is going to take a significant hit.

Blackham and House Budget Chairman Ron Bigelow, R-West Valley City, cautioned that the proposal is a preliminary one. When we say this is a draft we really mean it. It is changing already, said Bigelow.

But the budget document is the clearest guide yet to how the Legislature will meet its constitutional mandate to bring the $7 billion-plus spending package into balance with revenues by midnight March 5.

Under the outline, lawmakers would restore funding to some of the agencies and programs that had been targeted for 2 percent reductions in the latest round of committee hearings. Medicaid would get increased funding of around $32.8 million – about what Gov. Mike Leavitt recommended, but $20 million short of what low-income advocates said was needed to take care of critical needs in the state-run health insurance program.

If approved, the plan would cancel the proposed ouster of around 6,000 patients from the program slated next month by tightening the eligibility requirements.

Lawmakers, though, are proposing to eliminate Medicaid benefits for infant male circumcisions and chiropractic services. Also spared from the chopping block is the Department of Corrections Lone Peak facility, meaning there should be no early releases of prisoners.

The Utah State Fair will not lose half its approximately $400,000 in state funding, as originally proposed. But lawmakers are proposing to cut by 2 percent the operating budget of the Department of Alcoholic Beverage Control for a savings of $327,000. They also are proposing to siphon $5.5 million in tobacco settlement funds into the general fund in the current budget cycle.

On the revenue side of the plan, legislators are proposing to raise fees for liquor licenses, and an array of professional licenses.

The tax increases contemplated in the plan come from several bills already in the works.

Proposed elimination of sales tax exemptions for newspapers, pay TV and fruit stands are attributed to a bill sponsored by Sen. Ed Mayne, D-West Valley City.

But Mayne said the Republican leadership plan doesn't reflect his bill, which proposes doing away with a laundry list of special-interest tax breaks totalling $54 million. Mayne's bill would impose taxes on everything from ski resort power bills to prepaid telephone calling cards to vending machine sales to machinery and equipment for new or expanding manufacturing businesses.

If these special interest tax breaks aren't repealed the citizens are going to see tax increases or fees, and that's not fair, said Mayne.

Tribune reporter Judy Fahys contributed to this story.

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