SALT LAKE CITY — Tax increases are on the table as the 2017 Legislature begins Monday, a possible response to a proposed citizens initiative that would raise the state income tax rate to bring in an additional $750 million for schools.

It's an issue that's already dominating much of the discussion about the 45-day annual session, where lawmakers are expected to approve a budget totaling at least $16 billion and consider more than a thousand bills on a wide range of topics.

Which — if any — taxes might go up is a long way from being decided, but Republican legislative leaders have already said they don't want to touch the state's 5 percent income tax rate.

"It's at least a nonstarter for me and I think most of the Legislature to increase the income tax," Senate President Wayne Niederhauser, R-Sandy, told the Deseret News and KSL editorial boards last week. "It makes us less competitive."

The rate was reduced from a 7 percent maximum a decade ago as part of a $220 million tax cut package, an effort to make Utah more attractive to businesses in a region where some states have no income tax.

Business and community leaders behind the Our Schools Now initiative planned for the 2018 general election ballot are calling for the income tax rate charged Utahns to rise seven-eighths of 1 percent — amounting to more than a 17 percent increase.

There appears to be a willingness on both sides, however, to look at other options.

Among the possibilities discussed so far by lawmakers are raising the gas tax, restoring the state sales tax on food, and phasing out personal income tax exemptions for adults and children.

"There are a lot of ways and combinations of ways we can raise revenue, if we can show and convince the people that there's a need, and an expected outcome for that money," Niederhauser said.

Lawmakers still need to determine if $750 million is the target they should be shooting for, he said, as well as what schools should be required to do to receive the extra funds. Niederhauser has also said action might not happen until the 2018 session.

Backers of the initiative, a group that includes Utah Jazz owner Gail Miller, aren't willing to wait.

"The fact the Legislature is talking about different ways to raise money, I find very encouraging," said Bob Marquardt, a member of the initiative group's executive committee. "I think we're helping to stimulate the discussion."

But Marquardt said even after a closed-door meeting recently with legislative leaders, the group is going forward with drafting the initiative with the intention of filing it with the state in the spring.

"I just don't know what they're going to do," he said. "If the Legislature wants to meet with us, we'd be happy to meet with them. But we don't have any plan other than this initiative that we're working on."

Marquardt, the president of Management and Training Corp. in Centerville, said it would be preferable to settle on a source of new revenue for schools in the Legislature, rather that through an initiative petition drive.

While he said no budget had been set for the costly process of gathering enough voter signatures throughout the state to qualify for the ballot, about $500,000 has been pledged. His company donated $101,000 in November.

Still, Marquardt said, if lawmakers come up with a different way to raise $750 million annually, "we don't have any problem with that at all." He said that could mean a committment to raise tax revenues over time.

Initiative backers expect to begin polling the public in the coming weeks about how much money should be sought, as well as what performance standards schools will need to meet, Marquardt said.

House Speaker Greg Hughes, R-Draper, was circumspect about the issue.

"We are always looking to increase education funding," Hughes said. "In fact, we've increased funding at historic levels the past few years. Our focus isn't related to any threat of an initiative. This is just the job we do."

GOP Gov. Gary Herbert did not recommend any tax increases in his proposed $16.1 billion budget that would allocate $260 million in new money to public schools and higher education — 79 percent of the state's anticipated ongoing revenue growth.

Herbert's budget also calls for the creation of a task force made up of business and education leaders to come up with "an equitable and simple tax system" by aligning taxes "with the modern economy," not just a rate increase.

Democrats in the Legislature have long advocated coming up with more money to spend on education, even though the bulk of revenue growth from existing sources has gone to schools.

"If the Democrats had been in the majority in the last several years, we wouldn't have had to have the business community come and tell us, 'You ought to put more money in public schools,'" said House Minority Whip Joel Briscoe, D-Salt Lake City.

Briscoe told the Deseret News and KSL editorial boards that Democrats "are happy they're on our side on this issue." He said he believes the Legislature is "being tested right now. I think they're waiting to see how we respond."

Former Democratic state Sen. Pat Jones said she tried unsuccessfully to pass legislation reducing or eliminating personal income tax exemptions in 12 of her 14 years in the Legislature.

"I think it's still the best idea out there because it doesn't raise the rate," Jones said.

Personal exemptions, along with other allowed deductions, including for mortgage interest and charitable contributions, add up to some $1.2 billion annually.

Niederhauser said Jones' effort "was probably just a couple of years ahead of its time," a sentiment she takes as a compliment.

"I had a lot of support in back rooms," Jones said. "Now, I think you're getting leadership that thinks it's a legitimate option."

Even though raising taxes is difficult politically, BYU political science professor Adam Brown said lawmakers have little choice but to try to get in front of the issue now that an initiative is in the works.

"What this initiative does is create political will and a strong incentive for them to do something before they lose control," said Brown, a faculty scholar with the BYU Center for the Study of Elections and Democracy.

It can also provide a welcome excuse, he said.

"If you're a conservative legislator concerned about public education funding, and there certainly are many, you might appreciate the circumstance," Adams said. "An initiative can give you political cover to do something politically hard."