The State Tax Commission says things will perk up, fueling a resurgence in the sales taxes that the Utah Transit Authority Transit needs. If taxes remain flat, though, as they have been lately, the agency will have to cut $5.5 million next year.

"This is a very difficult budget," UTA General Manager John Inglish predicted for 2009. "We've got ridership growing like crazy," making service cuts especially distasteful.

"In our business, the better it gets, the worse it gets," Inglish told UTA board members Wednesday, "especially if you've got a downturn in the economy . . . at the same time you've got escalating fuel prices."

Wasatch Front sales taxes subsidize the bulk of rail and bus operations at UTA, and diesel's price surge already is estimated to have devoured nearly $7 million of the $177 million 2008 operating budget. Next year UTA expects electricity prices to rise 12 percent as well, meaning TRAX light rail will join buses and FrontÂRunner commuter trains in draining more of the budget.

Transit planners have made up the difference so far with administrative savings and fuel surcharges that first boosted the cost of a basic fare to $2 and in October will push it to $2.25. A regular fare increase is scheduled to lift the price to $2.50 in January.

Inglish said that if taxes don't pan out as the state predicts, service cuts will follow sometime in 2009.

"There's nowhere else to get it," he said. Further fare hikes would be "pushing the limits."

The state's rosier taxation outlook - 4.5 percent sales-tax growth next year compared with 1.75 percent this year - is based on the notion that Utahns' current scrimping will lead to pent-up demand for goods next year.

Most years UTA assumes a 5.5 percent revenue growth when budgeting, but not in recessions.

Just in case, UTA budget crunchers looked at what would happen if tax growth stays just above 1 percent. The result was a necessary $5.5 million cut from the agency's anticipated $201 million operating budget - a spending plan that grew in part because the new FrontRunner system will operate for the full year.

Budget projections assume diesel will average $4.25 a gallon next year.

The grim possibilities of cutting bus routes or train frequencies led board members to suggest a rainy-day fund for future budget binds. Terry Diehl said it's important to start now even if it's too late to help next year. The reserve would grow whenever sales-tax revenues are higher than UTA's budget predicts.

"We've got to address it now," Diehl said, "because it's going to happen again."

bloomis@sltrib.com

What's next

Utah Transit Authority staffers will present possible cuts this fall as the agency's board considers next year's budget.