New revenue projections indicate greater-than-expected tax collections in the two major sources of state funding: the sales and income tax.

Income tax collections, which pay for Utah schools, are estimated to be between $172 million and $279 million above budgeted amounts. Sales taxes, which fund most other state programs, are projected to be up $74 million to $127 million.

Legislative Fiscal Analyst Jonathan Ball cautioned that the estimates are very preliminary because they are based on only one quarter's worth of actual tax collections in the current fiscal year, which began July 1.

Senate President John Valentine, a tax attorney, also noted that the estimates do not reflect tax cuts previously approved by lawmakers, which take effect Jan. 1.

While there has been "a little bit" of discussion about cutting taxes again when the Legislature convenes in January, "I've also seen a fair amount of caution," said Valentine.

Utah's healthy economy has produced surpluses for several years, and there is no end in sight despite weakness in the housing sector and some drag caused by high gas prices and a tight labor market.

"The Utah economy is expected to continue to rank among the best in the nation for [Fiscal Year} 2008," wrote Andrea Wilko, the Legislature's chief economist.

Ball said more complete revenue estimates, based on a single number rather than ranges, will be released in December and updated for final budget decisions in February. Utah's budget staff tends to err on the side of more conservative projections, Ball said.

"It's easier to tell our bosses they have more money than to tell them we have to cut budgets," he said.