Utah legislators were expected to announce Friday that they have reached a compromise that will help them balance the state budget and offer millions of dollars in tax cuts, including at least a reduction in the state sales tax on food.

The announcement marks the end of what has been a struggle between Senate and House leaders over how large of a tax cut to offer Utah residents in a year where there is a $1 billion budget surplus.

Senate leaders favored offering a $100 million tax cut while House leaders favored a $230 million cut, including eliminating the sales tax on food. Both sides refused to move from that position -- until Thursday.

Details of the plan were not being released until Friday, but it was expected to build on one introduced this week by Sen. Curt Bramble, R-Provo.

In that plan, the income tax rate most Utah residents pay would drop from 7 percent to 4.95 percent. That bill will be considered by the full Senate Friday. Bramble said it likely would be substituted when it reached the floor.

That substitution was expected to reduce the state sales tax on food, which is 4.75 percent. The removal of the tax on food had been what had kept the two Houses from reaching an agreement nearly all session.

"Generally, we believe the sales tax (on) food should not be removed. But sometimes in the art of compromise you have to make decisions to come to agreement on things. We've made some concessions," said Senate President John Valentine.

Gov. Jon Huntsman introduced a plan Thursday that would have eliminated the state sales tax on food while retaining the 1.5 percent local option.

Huntsman threatened to call the Legislature into a special session if he did not see a tax reform package he liked and said he would be willing to forego his plan to reduce income taxes if it meant removing the tax on food.

Huntsman and his staff were expected to review the compromise between the Senate and House Thursday night and attend the compromise announcement Friday.

Rep. John Dougall, R-American Fork, said the compromise between the two houses was difficult but each side got a little bit of what it wanted.

"There will be significant benefits for the citizens of Utah," he said.