SALT LAKE CITY -- Gov. Jon Huntsman said Wednesday he will not call the Legislature into special session to address his income-tax cut plan after discovering that the $70 million he and the Legislature set aside for the plan falls $35 million short.

The shortfall is the result of the Legislative Office of Fiscal Analysis failing to consider that residents who pay income taxes in Utah and another state would be allowed a credit.

"The assumption was that all credits and exemptions would be eliminated," said Robert Spendlove, Huntsman's chief economist.

The Legislature ended its general session March 1 without adopting Huntsman's tax plan, which would have created a single income tax rate of about 5 percent for all residents and eliminated nearly all tax credits.

Most Utah residents who earn more than $4,300 a year pay a tax of 7 percent of their income.

Huntsman believes that by lowering the income tax rate the state will be more competitive in attracting business and that state revenues will become more stable.

"I've long been committed to tax reform, and I still am. It is critically needed," Huntsman said at a news conference.

Huntsman had originally planned to call the Legislature into session in mid-May to push through his plan, which stalled in the House in the final hour of the general session after legislators wanted to add more tax credits.

The $70 million the Legislature agreed to set aside for some form of Huntsman's tax plan can still be used next year.

Rep. Ron Bigelow, R-West Valley City, said in hindsight he's glad Huntsman's plan didn't pass given the error.

"Perhaps the House was wise after all in saying because we're not sure of all the ramifications, maybe that was best not to pass it," said Bigelow, who is co-chairman of the Executive Appropriations Committee.

Huntsman said he plans on revisiting his income tax plan, but said no time frame has been set for bringing it to the Legislature. The governor has the sole authority to call the Legislature into special session and set its agenda.

"If good public policy dictates waiting until the next session, we'll wait until the next session," he said.

The next legislative session begins in January.

Huntsman said he didn't want to rush something so important and would investigate how such an oversight was made to prevent a similar miscalculation in the future.

Spendlove said the mistake originated from the Utah Tax Commission and came to his attention several days ago. Legislative leaders were notified of the error this week.

"I'm glad they found it now and not after we passed the bill," said Executive Appropriations Committee co-chairman Sen. Lyle Hillyard, R-Logan.

If the bill had passed, the Legislature likely would have been called into a special session to correct the mistake or change the effective date, which was set for 2007, Hillyard said.

Bigelow said it's unlikely that if Huntsman's plan had passed that legislators would have been willing to cut $35 million in spending from the budget as a remedy.