The two caucuses of the ruling GOP agreed to a 0.05 percent sales tax increase on everything except groceries to raise nearly $22 million. The hike would mean an extra 5-cent tax on a $100 purchase of non-grocery items - from automobiles to appliances to clothing and restaurant meals.

"This works out to an average of about $9 per person per year," said House Speaker Greg Curtis of raising the rate from 4.65 percent to 4.7 percent. The estimate was derived by dividing the state population by the amount of increased revenues.

Republican lawmakers already had backed as a budget priority paying for tax credits for self-employed residents who pay for their own health insurance and enticing airlines, such as Delta, to stay in Utah among other tax cuts. Revenue that had been intended for those targeted tax reductions will instead go toward roads.

Curtis and Senate President John Valentine characterized the increase as a "tax shift," saying many people will benefit from the health care tax cut.

"I made a philosophical decision that it's not a tax increase, it's a tax shift," Curtis said. "Health care reform is worth shifting a .05 percent tax increase."

Valentine looks at the sales tax change as a fair trade-off to pay for critical transportation needs.

"What this tax shift buys us is a very large infusion for chokepoints and corridors," Valentine said.

An estimated 70,000 households will benefit from the health insurance tax cut. The money also will pay for a tax credit for people using solar projects and for those with limited-liability corporations and partnerships.

On the other hand, everyone pays sales tax.

"I have a really hard time supporting a tax increase when we are going out and starting new programs," said Rep. Paul Ray, R-Clearfield.

Curtis acknowledged that new programs will be created, but going through the entire budget, finding areas to cut and then getting both houses and the governor to agree on them would be difficult, he said.

Last year, the Legislature decreased sales tax by 0.1 percent. Salt Lake and Utah counties increased their sales tax by 0.05 percent to pay for transit, and this increase will bring those counties back to the same tax rate as last year, Curtis said.

Meanwhile, the Executive Appropriations Committee has approved $100 million in education dollars to be held out of the budget this year to pad for a declining budget next year. However, that money can't be used for roads.

"For those of us who have been over the falls before, this is us trying to build a little bit of a better barrel," Curtis said.

smcfarland@sltrib.com