Big boost: State revenue projections triple for coming year
After showing signs of life during the summer, Utah's economic recovery appears to have picked up steam and the governor and lawmakers are now projecting $300 million in revenue growth for the coming fiscal year.
That is triple the forecast from October and gives lawmakers who were faced with several hundred million dollars worth of growth-related demands in education, health care and pensions a bit of breathing room.
"It's good news. It's not great news," said House Speaker Becky Lockhart, R-Provo. "We have almost $300 million in ongoing needs just to maintain the budget as it is today, so I wouldn't want to give anyone the idea that there is a lot of money out there to create new programs and increase funding."
In addition to the $300 million in ongoing revenue money that is now expected to come in every year and will be built into the base budgets there is also $121 million in expected one-time surplus revenue that legislators can spend to patch holes or spend on highways, buildings or other projects, which will not need recurring revenue.
The projected growth in sales tax does not include about $70 million that has been earmarked for transportation projects under a bill that passed the Legislature in 2011.
Gov. Gary Herbert, who will roll out his budget proposal in early December, attributed the increase to policies that help the private sector flourish.
"While recent revenue growth is indeed good news and we remain better off than many states, we still have a lot of work to do. I'm cautiously optimistic, but we must be very careful to invest every dollar in a way that stimulates the economy and furthers job growth," he said.
Last week, legislators were told of $284 million in growth-related demands on the state budget. That includes $105 million to maintain the level of education funding for Utah's schools, which already is last in the nation. Education officials plan to seek another $44 million on top of the current budget.
In addition, the state will need $55 million to catch up on building maintenance projects that were put off during the recession, and an additional $18 million to pay county jails to lock up the same number of state inmates that they now house.
On top of that, legislators will have to find $32 million to fix accounting errors made by the Utah State Office of Education, at least$12 million to mitigate a massive data breach at the Utah Department of Health, and an estimated $21 million for fire suppression costs.
The bulk of the revenue growth a total of $210 million comes from income taxes and is earmarked by the Utah Constitution for public and higher education. The remaining $90 million comes mainly from sales-tax revenue.