Legislative leaders believe the state may be flush with cash to spend on one-time construction, transportation projects.
Among items high on the wish list for some are adding a second parallel track to the FrontRunner commuter train, along with road construction and maintenance.
“We have been wanting to bond for some roads and double-track FrontRunner for a couple of years. It’s likely we will try and get it done this year,” House Majority Whip Mike Schultz, R-Hooper, said.
The proposed improvements include “strategic” double-tracking between Ogden and Provo, which would allow trains to run every 15 minutes during peak hours. There are also plans in the works to offer express trains that would have one, or even zero stops before the destination station.
“Those express trains could shave 20 minutes or more off the commute time. It’s the biggest thing we can do to ease congestion along the I-15 corridor,” Schultz said.
These improvements would cost approximately $450 million, with the federal government, Utah Transit Authority and state government each paying a portion, he said.
The Utah Transit Authority issued a statement Monday that double-tracking would help to improve the reliability, frequency and capacity of its FrontRunner trains.
About 70% of the 90-mile FrontRunner system from Provo to Ogden now runs on a single, shared track, so trains may pass each other only at stations and a few sidings. A delay at one station, for example, can cause a ripple effect of delays down the entire line.
FrontRunner trains may now run about every half hour at most. Double-tracking could cut that in half, to allow service every 15 minutes.
“Local funding would also put UTA in the position of competing for existing and future funding opportunities at the federal level,” the agency added. It said it has been “working with legislators on providing information and potential options that would prepare for our future growth and further build upon FrontRunner’s success and importance to the region.”
Transportation is also among pressing issues for House Speaker Brad Wilson.
“We have record in-migration and the transportation needs of the state are getting acute,” says the Kaysville Republican. “We’re going to have to find a way to address those sooner or later.”
Sen. Jerry Stevenson, chair of the main budget committee, says educators and state employees might also be in for a boost. Lawmakers have also discussed using the money to pay for maintenance projects in Utah’s 43 state parks, which saw an increase in visitors this year because of the pandemic.
In February, before the pandemic hit, the Legislature was flush with cash. Lawmakers had an estimated $900 million in extra cash to spend because of booming income tax collections and healthy sales tax revenue. But, the reality of the coronavirus pandemic quickly put a damper on spending plans, including tax reform. In the end, lawmakers cut nearly $1 billion out of the budget but were able to boost spending for public education slightly, though less than planned.
Now there are some indications that overabundance of caution may reap financial rewards next year.
“By cutting and being very responsible financially, we have positioned ourselves for probably the best comeback in the nation,” says Stevenson, R-Layton.
While he wouldn’t give exact numbers, Stevenson says income tax and sales tax collections are trending ahead of projections. Utah’s unemployment rate is lower than the national average, and that’s been a major factor in keeping those tax revenues from falling off a cliff, which is what lawmakers expected to happen.
The better than expected economic situation means lawmakers can look at putting some money toward areas of the budget that have been left wanting in recent years.
“I think we’re going to look at taking care of some of the ongoing needs we backed out of last year, including compensation for state employees and education,” says Stevenson.
Taking care of those parts of the budget will likely eat up most of the ongoing money lawmakers expect to be available next year. Most of the extra cash they’re anticipating will come from one-time sources and conservative lawmakers generally avoid using that revenue for ongoing programs, like education or social services. That points to the likelihood of extra cash going toward meeting the state’s growing transportation needs as well as building construction.
However, construction is a red hot industry in Utah right now. With so many projects underway across the state, workers are in short supply. That means labor costs will be higher than usual, which may complicate any push for capital projects.
But construction is a proven economic stimulus. Buying materials and paying workers helps circulate money through the economy, which provides a lift to other local businesses, which then produces sales and income tax revenue for the state.
Some legislators say in the current economic climate, it makes sense to issue bonds for those projects. Lawmakers love to crow about Utah’s triple-A bond rating and low levels of debt. Plus, with interest rates hovering around zero, there’s very little cost to the state, and borrowing allows the state to stretch those tax dollars.
Wilson says he expects to have a conversation about bonding over the next couple of months, and the state could easily borrow $2 billion and only get to about half of Utah’s statutory limit on debt.
Borrowing money when there’s so much one-time money available might be a hard sell, however. Earlier this year lawmakers freed up some significant funding by replacing cash set aside for construction of the new prison with bonds. And, even though interest rates are low, that money does have to be paid back, so many Republicans, worrying about another economic downturn, are wary of embarking on a construction spending spree.
“We’re very concerned with how this looks 6 months down the road,” says Stevenson. “When you walk up to the front of a store and it used to say open 9 [a.m.] to 9 [p.m.], and now it says open 11 [a.m.] to 6 [p.m.], you have to wonder what kind of effect that will have on sales and income tax.”
Legislators will begin tackling the budget in earnest when the session begins on Jan/ 19, but they won’t get final revenue projections for setting next year’s budget until mid-February.
— Tribune reporter Lee Davidson contributed to this report.