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State lawmakers will have $340 million less to budget with than was projected just three months ago. The good news is that the remaining $776 million surplus is still the third highest on record.
Legislators have known for several months that the numbers were softening as the national economy struggled with housing woes and a weakening dollar. Utah has managed to resist any major damage to its economy but has recently seen a sizable drop in home sales and a 1 percent increase in unemployment. National consumer confidence numbers are also dropping. Money available for new projects will actually be less than the $776 million, as lawmakers included some of that in the base budget that they already passed. The base budget includes money for education growth and the rest of the raises for teachers, leaving available funds at $613 million. Senate leadership said Monday that the smaller than expected surplus will mean a lot of pie-in-the-sky proposals won't be getting money. "The difficulties (with budgeting) will be the high expectations," said Sen. Lyle Hillyard, R-Logan. For an idea of how fast the state can spend money, Hillyard is carrying a bill for the Regents Scholarship Program that would give many students in the state $1,000 for college if they meet certain criteria. The cost of just that one bill would be $50 million in one-time money with ongoing money of $7.5 million. The estimates are conservative in nature, Hillyard said, so that in the event of an even smaller surplus come the first of the fiscal year in July, the state won't have to consider budget cuts. Aside from a slowing economy, there were several factors cutting into the surplus, two of which are tied to the federal government's attempt to kick-start the national economy. The first is that tax breaks for businesses will mean $65 million less for Utah's coffers. There's also another $200 million tied to the two large interest rate cuts meant to keep banks loaning money. Gov. Jon Huntsman Jr. is unworried, especially considering tax cuts the past two years that would naturally cut into revenues. "We're still really strong, and frankly we're the envy of the other states," said Huntsman spokeswoman Lisa Roskelley. Tax cuts again this year are still being considered, even with the lower projections. Leadership of both the House and Senate have said they want to see some sort of relief, particularly in the property tax arena. The amount of $100 million has been bandied about. Available revenue: $613 million General fund Ongoing -- $100 million One-time -- $102 million Education fund Ongoing -- $171 million One-time -- $240 million |
