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Murray • Gov. Gary Herbert released his proposed $16.1 billion budget Wednesday, a plan that urges extra investment in law enforcement and education.
It includes no tax increases. But the governor projects about $287 million in new annual revenue that the state could "strategically invest" because of an improving economy that generates more tax collections as people earn and buy more.
"It invests in people, particularly our young people in education," Herbert said of the budget.
Herbert unveiled his proposals at the Salt Lake area Utah Highway Patrol headquarters in Murray — instead of at a public school as he has in recent years — to underscore a need to catch up with what he says is some long-overdue spending for public safety.
That includes $7.6 million more to improve salaries for correctional officers at state prisons — including creating a career ladder for them — to address problems with high turnover from low pay.
More than 60 percent of the state's correctional officers now have five years or less of service — and 27 percent of them have only one year of service. Turnover among officers was 20 percent in 2015.
"Most of the public safety agencies have a career ladder in place, where their staff every year gets an incremental increase. We don't have that," said Rollin Cook, executive director of the Department of Corrections. "This career ladder makes us competitive with everyone else."
Herbert said the budget would also add $654,000 to the Board of Pardons "to help us track those who have been incarcerated and help us keep better tabs on their progress and their whereabouts." This comes in the wake of the resignation of two top officials early this year following officer-involved shootings in one case where a parolee escaped and another in which a parolee was mistakenly released. An audit found the agency still used paper records with handwritten, often illegible notes, and inadequate information sharing.
The governor also proposed $1.5 million more in Highway Patrol trooper pay.
And he called for an extra $750,0000 for crime labs and evidence management to address, among other things, a big backlog in processing rape kits. The budget also seeks $1 million in new public-safety equipment, including more body cameras.
But Herbert also continued his yearslong heavy emphasis to improve education saying, "Our No. 1 budget priority is education."
He added, "Nearly 80 percent of all the new money in this budget recommendation goes to education," about $260 million.
If the Legislature goes along — and it usually makes plenty of changes — that would fully fund the state's share of costs for the 10,100 new students expected in the state next fall, which the governor estimates at about $68 million.
Herbert also proposes a 4 percent increase in formulas for per-pupil spending, an uptick from the 3 percent increase approved by lawmakers last year.
That would be an increase of $116 million in state funding given to local school districts.
David Crandall, chairman of the Utah Board of Education, said he was appreciative of Herbert's emphasis on per-pupil spending, which provides discretionary funds to school administrators.
"I think both the governor and the state [school] board value the concept of local control," Crandall said.
Herbert's budget would not add funding to a nascent classroom technology grant program, a priority of the state school board. The board had also prioritized construction of a new school for deaf and blind students in Utah County, which was not included in the governor's recommendations.
"We do have students there that are traveling pretty significant distances just to attend school," Crandall said.
Funding for Utah's public education system from all sources is estimated at a total of $6.2 billion in fiscal 2018. State funds provide about 54 percent of the total. Utah remains last in the nation in per-pupil spending.
Herbert last year called for $1 billion in new investment over five years in K-12 public education, and said his new budget would bring the total for the first two years of that period to $425 million.
The governor's proposed education spending increases come at a time that a group of business leaders — called Our Schools Now — is calling for a much more significant hike in school taxes, and is planning a petition drive to put it on the 2018 ballot.
It hopes to increase Utah's income tax rate from 5 percent to 5.875 percent to better fund schools. For a median Utah household with a $60,000 annual income, that could be an increase of $472 a year.
"I think it's premature," Herbert said about that referendum drive. He worried that a tax increase "could have a dampening effect on our economic growth and expansion."
Instead of the tax increase, he urged reform of some existing taxes to help schools.
For example, he said the number of income-tax exemptions and credits has doubled in the past 20 years — and he urges revisiting them to see if they still make sense or should be eliminated.
Also, he said Utah is losing about $200 million a year in uncollected taxes on online sales. Utahns by law are supposed to pay sales tax on their online purchases by voluntarily adding it to their income tax. Few do.
"It's $200 million that all could be put into education," Herbert said. "And we don't have to raise taxes on anybody to do that."
He said he is working with Utah's congressional delegation to push a federal bill to require automatic collection of sales tax for all online sales. If that does not occur soon — and it has been proposed for years — he said states must pass their own state-by-state solutions to pressure Congress into one national solution.
"I would rather address those first" than pushing the referendum to increase income taxes, Herbert said. "I am very concerned about anything that would in fact throw a monkey wrench into the gears of the economic engine that is doing so well."
Our Schools Now issued a statement in response to Herbert's budget, commending the governor for his focus on education while stressing the need for significant investment.
"Utah schools require a dedicated stream of new funding to elevate academic outcomes in Utah," it said.
The governor is also calling for possibly removing current earmarks on growth in state taxes. He said 32 percent of all new revenue has requirements on how it must be spent. He said he opposes efforts to expand earmarks.
Herbert said his budget would help Utah live within its means — and will not authorize any new borrowing beyond what is needed to relocate the state prison.
The Legislature last year appropriated $550 million to build a new prison in northwest Salt Lake City, including a $470 million bond. The governor's office now figures the state may need to bond, or borrow, for up to $100 million more to install utilities and build roads to the new prison site.
Herbert's budget also includes $550 million in rainy day funds for unforeseen emergencies and needs. The governor notes that conservative budgeting has made Utah one of only 11 states with a top AAA bond rating.
Among some other proposals in the budget are:
• A 1 percent cost-of-living wage increase for state workers, as well as another 1 percent for some employees now being paid below market wages — such as the corrections officers and employees in higher education.
• $1.4 million to restore Medicaid dental services to people with disabilities.
• $5 million in water-conservation rebates and advertising.
• $5 million in federal grants to remove dirty vehicles, including school buses, from Utah's roads.
• $7.5 million in one-time funding for affordable housing and homelessness reduction.
• $123,000 for testing, monitoring and other emergency work to address any further algal blooms in Utah waterways.
• $500,000 for water-saving technology at state facilities.
• $250,000 in air-quality research.
• $1 million for the Utah Electronic High School, which was defunded by lawmakers last year and is slated to shut down if new funds are not approved.
• $1.5 million to defend those accused of a crime but unable to afford a lawyer;
• Funding to boost Utah's outdoor recreation and tourism industry, including $1.6 million for the Outdoor Retailer Show, $750,000 for Sundance branding, $1 million in outdoor recreation grants and $1 million for tourism marketing;
• $250,000 to combat addiction to opioid pain-killers;
• $100,000 to buy paper bags for state liquor stores.
— Benjamin Wood contributed to this report. —
Funding sources
Following are major sources for the general and education funds in Gov. Gary Herbert's proposed 2018 budget:
• General Fund, $2.4 billion total
Sales and Use tax: $1.93 billion
Beer, cigarette and tobacco taxes: $119.7 million
State liquor store profits: $119.5 million
Insurance premiums; 115.6 million.
Other: $79.9 million
Cable/satellite excise tax: $29.9 million
Oil and gas severance tax: $18.4 million.
Investment income: $9.2 million
Metal severance tax: $8.2 million
Property and energy credit: -$6 million
• Education Fund, $6.5 billion total
Individual income tax: $3.7 billion
Corporate tax: $340.4 million
Other: $25.2 million
Mineral production withholding: $15.8 million