Republican legislative leaders unveiled their “socks and underwear” budget Friday, allocating about $30 billion in taxpayer money and adding millions of dollars to school voucher programs, career training for high school students, raises for state employees and tax cuts for a fifth year in a row.
The full budget won’t be decided until the final minutes of Utah’s annual lawmaking effort, which ends at midnight on March 7 — meaning lawmakers, lobbyists and Utahns looking for funds for their programs still have a week to make their final requests and pleas to lawmakers.
“By maintaining fiscal discipline while making critical investments, we are ensuring Utah’s long-term prosperity,” Senate Executive Appropriations Committee Chair Jerry Stevenson, R-Layton, said in a statement Friday. “This budget keeps our state on a path of sustainable growth, economic opportunity and a high quality of life for all Utahns.”
Republican leaders have tried to downplay budget expectations this year after announcing that revenue numbers came in $112 million lower than forecast a few months earlier, leaving them less money to spend on new projects and programs.
That number, however, did not include about $230 million that they had set aside last year for tax cuts or $104 million tucked away to give raises to state employees and teachers.
Friday morning, Gov. Spencer Cox and legislative leaders announced that teachers would get a $1,400 pay raise and support staff would get a one-time $1,000 bonus.
And tax cuts are still on the table, but have been scaled back.
Thursday night the House passed a bill that would reduce the income tax rate from 4.55% to 4.5% — cutting about $97 million in state revenue. It also would expand the child tax credit to parents with a child up to five years old and extend a tax break to companies that provide child care.
One of Cox’s main requests, a tax break for senior citizens’ Social Security income, is still being hashed out.
House Speaker Mike Schultz said Thursday that the tax package would include an income tax reduction — the fifth consecutive year for such cuts — an extension of the child tax credit and some break on how much Social Security income is eligible for taxation.
“We want to give families a tax cut, every citizen a tax cut and we want to continue to work on Social Security,” Schultz said.
Schultz said he expected the House will end up not taxing Social Security income for households making up to $90,000, and maybe slightly more.
According to an analysis by the Institute on Taxation and Economic Policy done for Voices For Utah Children, a child advocacy group, the general income tax cut would mean $1,929 in annual savings for the state’s top 1% of earners and $35 a year for a household earning between $63,100 and $103,200.
If it is approved, the last five years of tax cuts will have saved the top 1% of households $17,361 a year and those middle income households $313 a year.
Corporations have received the same tax breaks, 94.5% of which go to out-of-state corporations, while 5.5% of the reduction went to Utah businesses, according to the ITEP report.
Senate President Stuart Adams, in a statement Friday, said, “This budget reflects Utah’s values — responsibility, innovation and forward-thinking investments.”
Some highlights of the Legislature’s budget recommendations include:
