The state could close the last fiscal year, which ended June 30, with a $130 million surplus in its two main funds – the Education and the General Funds.
The Transportation Fund could see a small $10 million surplus.
Those were the estimates presented to legislative leaders Tuesday afternoon when they met in the Executive Appropriations Committee.
That $130 million – which is not that far off in a $15 billion budget – is the top side.
The economists in the governor’s office, the Legislature’s Fiscal Analyst Office, and Tax Commission also said the state could end the 2017 fiscal year $5 million in the red in the two most important funds.
The mid-point in the new estimate is more than $62 million – so it is safe to say that there will be a healthy revenue surplus when lawmakers meet in five months in their 2018 general session.
At that time they will open the current fiscal year’s budget and spend some of that money – if tradition holds.
The surplus is only one indication that Utah’s economy is still strong – one of the best in the nation.
Unemployment remains low, the report said, as does inflation.
And as of the first of the year, Amazon started collecting Utah’s sales tax on all of its online purchases – adding to the growth overall in the sales tax.
Overall, legislative budgeters estimated that tax and fee revenue would grow by 4.6 percent from July 2016 to June 2017 – and the actual collections will be near that estimate.
“Utah is a great place to be right now,” said Andrea Wilko, the Legislature’s main economist.
As new home buyers know, and sellers, too, Utah’s housing market has taken off over the last 12 months.
Thomas Young, another legislative economist, said home prices have rebounded beyond the peak in 2008, before the Great Recession.
House Majority Leader Brad Wilson, R-Kaysville, is a homebuilder.
He said houses are selling as fast as builders can construct them.
But there is another concern, he added.
His inputs, both land, and building materials are going up faster than even the hot home prices – something he has not seen before.
Sen. Karen Mayne, D-West Valley, who is close to laborers, said while Utah’s economy is going well, it would not be proper to say firms should move here because of “cheap” labor.
Utah’s wage growth was up over 8 percent last year, noted Wilko.
“We have competitive wages,” said Mayne, “not low wages.”
When wages go up, the middle income can buy more, said Mayne – whose late husband, Eddie, was president of the Utah AFL-CIO.
And that helps the retail sales tax.
Yes, added Wilko, retail sales tax collections are up around 8 percent – showing the two economic factors are tied together.
