Font ResizeLegislative budget leaders issued a broad warning to state agencies to pinch pennies in light of the larger-than-forecast revenue shortfall that seems to be emerging from the latest tax collection data.
In a letter citing the state Tax Commission's most recent numbers, Sen. Lyle Hillyard and Rep. Ron Bigelow -- co-chairs of the Executive Appropriations Committee -- said the Legislature had budgeted for a 3.9 percent decline for the current fiscal year. But the latest quarterly tax report showed a 22 percent drop.
In September, economists advised the appropriations committee that this year's revenues would fall within a range of plus $50 million to minus $150 million of what had been budgeted. Legislative estimates trended toward the lower end.
"Taken together these reports give us pause over whether the state budget for FY 2010 will hold without further reduction," the Oct. 27 letter said, urging extra caution in spending decisions over the coming months.
"The figures are continuing to drop," Hillyard said in an interview Wednesday, "but we don't think it's dramatic enough to call for a special session."
By making adjustments early on, Hillyard said, agencies can avoid getting blindsided when the Legislature has to start making cuts in January. At that time, second-quarter data will be available and the grim picture could have softened a little.
Don Uchida, Director of Utah's Division of Rehabilitation Services,
"We were given the [federal] stimulus money as a band-aid and thought we'd be all right until this latest thing came out," Uchida said. "We thought we had our contingency plan in place but this is far worse than anything we planned for."
Uchida oversees four divisions, one of which survives solely on state funding -- services for the deaf and hard of hearing.
"I fear they'll take the brunt of the hit," Uchida said.
Services for the blind and visually impaired -- which gets half its funding from the state and the other half from the federal government -- could also be impacted, he said.
Uchida dreads the thought of having to trim case services, namely the money his department spends on helping disabled clients get jobs and achieve independence, in a time when the general public is experiencing layoffs.
"People with disabilities are the last to get hired and the first let go," Uchida said. "And our referrals are up 20 to 22 percent over last year. So it's going to be really difficult."
Coming into the holiday season, when revenues generally rise, means the grim picture could brighten a little.
"It's wait and see," said Legislative Fiscal Analyst Jonathan Ball, noting that the rate of decline is nowhere near what it was last year.
"But that doesn't mean it's getting better in terms of increasing revenues," Ball said. "We'll know more in December" -- when new revenue estimates come out.
Come January, Hillyard hopes that lawmakers will be able to focus on 2011 without having to plug a huge hole in the current, 2010, budget.
Further cuts will be a challenge, he said.
"We'll try to be fair," Hillyard added. "Some agencies can take cuts better than others."
