State’s nearly $22B budget plan spends big on education, transportation

Disagreements remain over how much money to borrow.

(Francisco Kjolseth | Tribune file photo) This Jan. 19, 2021, file photo was taken on the day the Utah Legislature opened its 2021 legislative session at the Capitol in Salt Lake City. With a March 5 adjournment next week, lawmakers are putting finishing touches on the state's budget, with remaining disputes over the level of borrowing.

Utah legislative leaders said the process of setting next year’s $21.7 billion budget was one of the easiest they’ve ever experienced. Having more than $1.5 billion in extra money to spend can help clear any roadblocks that pop up.

“This is probably the smoothest budgeting process I’ve seen in my nearly decade of doing budget negotiations with the Senate,” House Speaker Brad Wilson, R-Kaysville, told reporters Friday.

Last year, the unfolding coronavirus pandemic forced legislators to cut nearly $1 billion from the budget they had approved just a few months earlier. But, the economic damage from COVID-19 was not nearly as bad as they predicted.

Earlier in February, new consensus revenue numbers showed there was more than $1.3 billion in extra one-time cash to spend along with just over $200 million in ongoing funds.

Legislators are using that cash to restore much of the funding they slashed last year, plus fund a number of new program requests this year.

In addition to billions in spending, legislative leaders are pleased with their plan to offer approximately $100 million in tax relief. Most of that cash was left over from the abandoned effort to overhaul the state’s tax system in 2019. The pandemic derailed plans to use the money for tax cuts last year.

As usual, one of the biggest funding items this year is the public education budget. Lawmakers agreed to boost school funding by $400 million before the session even started. That included paying for the growth in the student population and inflation. They also spent $122 million in one-time money to provide bonuses for teachers.

The final education budget adds just under another $32 million in ongoing funds and $44.8 million in one-time money to that total. It includes $7 million for optional enhanced kindergarten, plus millions to pay for online education.

Lawmakers are determined that $274 million in federal COVID-19 relief funds for Utah schools go toward helping students who have been impacted by remote learning. Earlier in the session, they added language to the public education base budget bill mandating those funds go toward any number of programs to help those students catch up with their grade level. The final budget will include similar language, blocking local school governing bodies from spending those funds on school improvements.

More than $273 million in one-time money and just under $24 million in ongoing cash will go toward economic development programs. There is $20 million for grants as well as $10 million to pay for developing rural broadband internet.

This grant program will be part of the Governor’s Office of Economic Development, which will use that $20 million to help businesses that “experienced a high level of revenue decline” because of the coronavirus pandemic. Those funds will also go to assist organizations that host live events or entertainment that experienced a major disruption due to COVID-19-related shutdowns.

The Inland Port project is in line for $8 million to fund operations there.

Some $115 million is set aside in the budget document for an “infrastructure development account.” That money will go toward an “infrastructure bank” to fund transportation improvements or utilities around the inland port and Point of the Mountain developments.

“The state would allocate some money to those banks, and then as projects come onboard, they have the ability to make an application to borrow money from the state or from this fund,” House Majority Leader Francis Gibson, R-Mapleton, said, “and then be able to repay it back through the proceeds that are generated from the projects.”

“When you start a construction project, it’s going to take a lot of roads, power, water — all the things you need up front to do a major development,” said Sen. Jerry Stevenson, R-Layton. “We would loan these funds out to fund those projects, and they would be paid back over several years.”

Another big-ticket item is building construction. There’s more than $211 million allocated in one-time funds for several new buildings, mostly on college and university campuses around the state. There’s more than $37 million to pay for a health sciences building at Bridgerland Technical College in Logan. Another $31 million covers a general education building at the Salt Lake Community College campus in Herriman. A new applied sciences building on the University of Utah campus carries a $59 million price tag, while a classroom building at Southern Utah University will cost $42 million.

The construction spending spree also covers $4 million for renovation and construction of new committee meeting rooms at the Capitol Hill complex.

Lawmakers also are proposing $56 million to fix a structural imbalance in the state’s Medicaid program. Enrollment in the expanded program under the Affordable Care Act is growing more rapidly than revenues, so the money is needed to keep the service in the black.

There’s $5 million to pay for salary increases for caseworkers at the Utah Division of Child and Family Services. Many of those caseworkers don’t make enough money to get by without relying on government assistance.

The state is putting $50 million toward homelessness and affordable housing programs. That includes $10 million to the Olene Walker Housing Loan Fund to fund an affordable housing loan program from Sen. Jake Anderegg, R-Lehi, that was passed in the 2020 session but was a victim of budget cuts last year. Also, $15 million for a rental assistance and affordable housing program from Sen. Derek Kitchen, D-Salt Lake City, was included in the appropriation.

There’s another $15 million in state money that will be matched by $15 million from community and local government sources to support homelessness services. Those funds will be spent by the new Utah Homeless Council and state homeless coordinator. Called by some the new “homelessness czar,” that person will be in charge of overseeing the state’s approach to the problem.

Also funded is nearly $550,000 to restart a program sending postcards to vehicle owners reminding them to renew their registration every year. Legislators eliminated that program last year, but are restarting the practice after learning many motorists were unaware their registration had expired.

There’s $1.2 million to convert Bridal Veil Falls into a state monument. This comes after the Utah County Commission floated the idea after a private developer wanted to build a private lodge at the top of the falls. Another $67 million is set aside for improvements at Utah State Parks and $20 million for the creation of the new Utah Raptor and Lost Creek State Parks. A $39 million one-time request to fund trails, open space, and parks was also added to the final budget proposal.

The spending plan includes intent language to spend $9.8 million for the Utah Lake Authority, with the money to be used for cleaning up the lake and ongoing maintenance. A separate bill to create this new authority was controversial enough that it didn’t make it out of a House committee.

The plan to merge the Utah Departments of Health and Human Services into one agency has been approved by legislative budget writers with a $1.635 million allocation.

But, it’s not all smiles when it comes to approving the final budget next year. House Republicans are pushing a massive $2.26 billion proposal for transportation and transit projects. That includes $1.4 billion in debt through bonding. Republicans in the Senate have expressed some unease with that big of a number.

“I think there is some discussion around the number, you know, how high does that bond go,” House Majority Whip Mike Schultz said. “We’re open to looking at what the options are.”

While House leaders expressed willingness to negotiate with their Senate counterparts, they also stressed on Friday that the $1.4 billion in bonding would act as a set-aside that would support transit and construction projects for years to come.

Borrowing that much money all at once would “make me extremely nervous,” Schultz, R-Hooper, said.

“It’s basically just planning and preparing and getting the process rolling for the next eight years of transportation projects,” he said.

Tribune reporter Bethany Rodgers contributed to this story.