While the economy nationwide has cooled, Utah's remains hot, particularly in the housing sector. Total state revenues grew by $132 million in the first quarter compared with the first quarter of last year, bringing revenues to nearly $1.2 billion.

If that trend were to continue, the Legislature could be facing another banner year in tax collections, following on the heels of last year's $380 million surplus.

"I can't imagine that happening," says Tax Commissioner Marc Johnson, warning against extrapolating annual revenues from the first quarter. "It would be unprecedented to have growth on that scale."

Last year's surpluses led to increased spending in nearly every area of government, including education and transportation, and even funded a historic $78 million income tax cut.

Sen. Curt Bramble, Senate chairman of the Revenue and Taxation Committee, cautioned against staking too much on these early numbers. But he said economic trends seem to hit Utah later than the rest of the nation. "We're always about 10 years behind here," he joked, adding, "at least several quarters behind."

If the lawmakers have yet another surplus, Bramble said the challenge will be in working with the state's spending caps that cover all government growth except education and transportation.

Lawmakers, of course, have the power to suspend or eliminate their own spending caps.

Gov. Jon Huntsman Jr. has pledged to funnel additional money into public education, which he sees as key to attracting businesses that will keep Utah's economic engine humming. Even with last year's increases, Utah remains dead last in per pupil spending and faces an enormous influx of new students in the next decade.

The revenue increase came in all the state's major revenue sources, sales, income, tobacco and beer and severance taxes, according to Tax Commission figures.

Transportation taxes, however, fell slightly overall, dragged down by a 5 percent decrease in motor fuel tax revenues that resulted from skyrocketing gas prices.

"This is a positive economic forecast - that's fair to say?" Bramble prompted Johnson.

"I would say that is true," Johnson said, adding, "But that's not saying it will continue."

We're in the money

2006: 2007: Growth

Sales taxes $443M $472M 6.5 percent.

Income tax $454M $520M 14 percent

Corporate tax $75M $108M 43 percent

Beer/Tobacco $14M $15M 6 percent

Insurance taxes $18M $16M -9 percent (down)

Severance tax $19M $26M 34 percent

Motor Fuel tax $68M $64M -5 percent (down)