Thanks to the leadership of Governor Huntsman, the Legislature reformed state corporate income tax apportionment formulas and made Utah-based exporters more competitive. This reform which your Taxpayers Association lobbied for reduces corporate income taxes by $7 million.

The Legislature and Governor approved HB78 (Harper) that allows C-corporations to elect between the existing evenly weighted three-factor apportionment formula or double-weighted sales factor apportionment for state corporate income tax purposes. Most states are currently using apportionment factors that place heavier weighting on sales factor. Utah exporters such as manufacturing, IT, and mining companies are disadvantaged under Utah's currently evenly weighted three-factor apportionment due to other states placing heavier emphasis on sales factor. In many cases, these Utah-based multi-state exporters have more than 100% of corporate profits subject to state income taxes when state taxable income from all states is considered. With heavier emphasis on sales factor, Utah exporters will be more competitive with their out-of-state rivals.

Active duty reservists and National Guard get one-year tax cut

 Did the Legislature pave over the children and the poor?

The Legislature was unfairly criticized by the press and various spending groups for appropriating an additional $120 million of general fund revenues for transportation. The Legislature increased general fund appropriations for transportation to compensate for reduced transportation expenditures of the previous three years. To balance the budget during the recession, the Legislature transfered general fund revenues from transportation to higher education which allowed state income tax dollars to be transferred to public education. General fund revenues for transportation were $159.4 million in FY2002 but declined by more than 60% to $60.3 million, $59.7 million, and $59.7 million in the next three fiscal years. The general fund appropriation for transportation in the FY2006 budget is a significant increase over FY2005 only because general fund appropriations for transportation had been significantly reduced in the three previous fiscal years. Other areas of government spending -- including health, higher education, and public education -- did not experience the drastic reductions in appropriations from the general fund and uniform school fund as did transportation. This is clearly demonstrated in the following table. 

UniformSchool Fund and General Fund Appropriations, FY2002 to FY2006

Fiscal Year	Transportation	Health	Public Education
2002	$159.4 million	$218.8 million	$1.73 billion
2003	$ 60.3 million	$233.5 million	$1.68 billion
2004	$ 59.7 million	$226.8 million	$1.71 billion
2005	$ 59.7 million	$287.6 million	$1.82 billion
2006	$179.7 million	$324.0 million	$1.91 billion

FY2002 through FY2004 are actual expenditures. FY2005 includes supplemental appropriations.

The spending lobby has argued that the Legislature appropriated significant general fund revenues towards transportation during the I-15 reconstruction of the 1990s, and therefore the Legislature should not continue signficant appropriations for transportation. However, Utah is a growing state with growing infrastructure needs. Just as growing school districts have been building new schools in recent years and will continue to build new schools to accommodate enrollment growth, the Legislature will need to continue appropriating additional funds for transportation as long as Utah's population continues to grow.