The bad news: The state's budget is shrinking.

"The Legislature expects revenue growth in 2009 not to be all that robust," said James Wood, director of the Bureau of Economic and Business Research at the University of Utah. The budget ''shows not all that much growth, and a little bit of a drop."

Indeed, for the first time in more than a decade, the budget approved for next year is smaller than the current one. But Jonathan Ball, legislative fiscal analyst, says the downturn for 2009 won't be as severe as experienced from 2001 to 2003.

In the earlier period, "the Legislature had to make $700 million worth of budget cuts because revenue declined," Ball said. "There was an unanticipated economic slowdown after 9/11, and the Legislature had to cut budgets and find other revenue sources."

The drop for 2009 has more to do with the fact that the Legislature anticipates lower revenues due to recent tax cuts - estimated at almost $400 million - and a 70 percent decline in the surplus available for short-term projects such as road repairs.

Ball emphasizes that money going toward salaries and programs increased by 6 percent. But the smaller revenue pie means agencies will be competing more fiercely to get a bigger slice for what they say are pressing needs.

"The decline from '08 to '09 is sort of planned," Ball said. "There have been large tax cuts in the last two sessions and we knew the budget wouldn't grow as tax revenue declined."

While the U.'s Wood understands that decreased tax revenues play into the decreasing budget, he also sees the numbers as a sign that legislators are preparing for an economic slowdown.

Projections for employment growth are only 2 percent in 2008 and 1.3 percent in 2009, he said.

"There will be less job growth and less revenue, and that's the reason that the budget numbers have come down."

smcfarland@sltrib.com