Shrinking revenues mean lawmakers
must downsize spending plans
By Sheena McFarland
The Salt Lake Tribune
Article Last Updated: 02/19/2008 06:19:15 AM MST
The state Legislature will have about $340 million less to work with this year than leaders previously thought. Now
they must decide what not to fund or which hoped-for tax cut to junk.
New revenue estimates show the slowing national economy has caught up with Utah.
"Expectations have been so high, there will be some disappointment, but there's still plenty of money," said Sen.
Lyle Hillyard, Senate chairman of the executive appropriations committee.
But legislative leaders are hedging about what they'll cut, be it programs or raises for state employees or tax
cuts.
"Basically nothing's off the table," said House Speaker Greg Curtis through a spokeswoman. "We will still have
to look at all our options and decide accordingly. Everything is still open for discussion and I won't rule anything
out at this point."
Senate President John Valentine agreed, saying he will look at all the items in the budget before making a
decision.
Senate Majority Whip Dan Eastman said he wasn't "as optimistic as everyone."
"I am concerned going forward as I look at the downturn in the construction industry; the auto business is way
off compared to last year, and this consumer confidence issue is a big problem," he said. "We are in a downturn
and it depends on this political season how we go."
Before the session began, leaders set aside $116 million in anticipation of economic slowing, but that was not
large enough to offset the declining revenue estimates. However, there is still $613 million to spend by the March
5 close of the lawmaking session.
Earlier in the session, lawmakers passed basic budget bills making up more than $10 billion of the $11
billion-plus budget.
Besides the economic downturn, three other factors helped drive the new revenue estimates down, Hillyard said.
The federal economic stimulus package caused a $65 million drop in revenues; the Utah Tax Commission will
delay some money for a year due to a tax withholding table change, and the federal interest rate cut also hurt
revenues.
Rep. Ron Bigelow, House chairman of the executive appropriations committee, said that not all requests will be
funded this year.
That's true most years, but this year well more than half the $1.1 billion in additional funding requests will go
begging.
"Funding for the lower priorities will not be available, but many of the big needs within the state of Utah [will be
funded]," Bigelow said.
Last week, Bigelow said there "was no question" that decreased revenues would likely erode the Legislature's
ability to provide a tax cut. But Monday neither he nor Hillyard would say which programs will be funded or if a tax
cut is still possible.
Senate Minority Leader Mike Dmitrich, though, had no problem voicing his opinion on the matter. He said he
"hopes that these numbers do away with tax relief."
"This is not the time for tax cuts," said the Price Democrat. "We have so many needs in social services and
human services that need funding."
must downsize spending plans
By Sheena McFarland
The Salt Lake Tribune
Article Last Updated: 02/19/2008 06:19:15 AM MST
The state Legislature will have about $340 million less to work with this year than leaders previously thought. Now
they must decide what not to fund or which hoped-for tax cut to junk.
New revenue estimates show the slowing national economy has caught up with Utah.
"Expectations have been so high, there will be some disappointment, but there's still plenty of money," said Sen.
Lyle Hillyard, Senate chairman of the executive appropriations committee.
But legislative leaders are hedging about what they'll cut, be it programs or raises for state employees or tax
cuts.
"Basically nothing's off the table," said House Speaker Greg Curtis through a spokeswoman. "We will still have
to look at all our options and decide accordingly. Everything is still open for discussion and I won't rule anything
out at this point."
Senate President John Valentine agreed, saying he will look at all the items in the budget before making a
decision.
Senate Majority Whip Dan Eastman said he wasn't "as optimistic as everyone."
"I am concerned going forward as I look at the downturn in the construction industry; the auto business is way
off compared to last year, and this consumer confidence issue is a big problem," he said. "We are in a downturn
and it depends on this political season how we go."
Before the session began, leaders set aside $116 million in anticipation of economic slowing, but that was not
large enough to offset the declining revenue estimates. However, there is still $613 million to spend by the March
5 close of the lawmaking session.
Earlier in the session, lawmakers passed basic budget bills making up more than $10 billion of the $11
billion-plus budget.
Besides the economic downturn, three other factors helped drive the new revenue estimates down, Hillyard said.
The federal economic stimulus package caused a $65 million drop in revenues; the Utah Tax Commission will
delay some money for a year due to a tax withholding table change, and the federal interest rate cut also hurt
revenues.
Rep. Ron Bigelow, House chairman of the executive appropriations committee, said that not all requests will be
funded this year.
That's true most years, but this year well more than half the $1.1 billion in additional funding requests will go
begging.
"Funding for the lower priorities will not be available, but many of the big needs within the state of Utah [will be
funded]," Bigelow said.
Last week, Bigelow said there "was no question" that decreased revenues would likely erode the Legislature's
ability to provide a tax cut. But Monday neither he nor Hillyard would say which programs will be funded or if a tax
cut is still possible.
Senate Minority Leader Mike Dmitrich, though, had no problem voicing his opinion on the matter. He said he
"hopes that these numbers do away with tax relief."
"This is not the time for tax cuts," said the Price Democrat. "We have so many needs in social services and
human services that need funding."
| Kirk Millson Plumb & Co. |
| 801.419.8912 |
| Sugar House Utah: Economic News |
The economy is slowing down, but it's still humming along compared with the rest of the nation. Yes,
the Legislature will have $340 million less to spend, but it still has hundreds of millions of dollars
more than it anticipated a year ago. The problem is, lawmakers' grandiose spending plans grew with
the budget surplus. Some would say that leaving lawmakers with less money is better in the long run.
the Legislature will have $340 million less to spend, but it still has hundreds of millions of dollars
more than it anticipated a year ago. The problem is, lawmakers' grandiose spending plans grew with
the budget surplus. Some would say that leaving lawmakers with less money is better in the long run.
