"One thing that is pretty clear is that people have less disposable income because they're having to spend more for gas and groceries," said Senate President John Valentine.

The state's general fund revenues dropped by 4.4 percent, largely due to the loss of $105 million in sales tax revenue from fiscal 2007 to fiscal 2008, which ended June 30, according to a report released Friday by the Utah Tax Commission.

The 5.7 percent overall decrease in sales tax revenue reflects that personal spending has slowed. Cuts to the state's sales tax rates took effect in January, also contributing to the shrinking revenue pool.

Utahns seem to be filling up less frequently at the gas pump, causing projected transportation revenues to be significantly less than expected. Instead of a 5.6 percent increase, transportation revenue rose only by 0.2 percent, or $20 million less than projected.

Gasoline tax revenues had been expected to rise 4.4 percent, but Friday's figures showed a 1.9 percent drop, and a projected 9.1 increase in diesel tax revenues turned out to be a more modest 2.5 percent boost.

However, these small declines come as no surprise to state officials who set the yearly budget.

"We intentionally reserved a large carry-forward because we anticipated a slowdown," Valentine said. "Utah is very well poised to weather any kind of economic downturn."

Some states are having to cut services because of dwindling tax revenues, said State Tax Commission spokesman Charlie Roberts.

"We're in a lot better fiscal shape than most," Roberts said, pointing to Utah's fiscally conservative bent and efforts to foster a favorable business climate as contributing factors.

While government budgets may be well-buffered, average Utahns worry about stretching their dollars to cover rising costs.

"I've heard anecdotally that more families are visiting the food bank and taking advantage of other programs for help," said Allison Rowland, budget director for Voices for Utah Children. "It's important for our government leaders to be aware of the disproportionate impact that this kind of crisis has on low-income families."

Utahns are indeed feeling pain at the pump, said state Sen. Wayne Niederhauser, R-Sandy. And the collapse of the real estate business - his profession - has impacted Utah.

"We've got builders and developers going bankrupt all over Utah," he said. "They had a couple of great years and now they're facing losses."

Niederhauser predicts that by early 2009, fuel prices - and the real estate market - will stabilize and consumer confidence will rebound.

Economist Kelly Matthews, executive vice president for Wells Fargo & Co., said he expects 2008's first and second quarter retail sales reports, which come out later this year, to paint a brighter picture.

"Residential construction is way down, but not many layoffs occurred in other parts of the economy," Matthews said. "We are still experiencing some growth and it's plausible that retail sales growth will hold steady at about 4 percent."

cmckitrick@sltrib.com