Despite Budget Surplus, Don't Expect Legislative Spending Spree
by Bob Bernick
09/19/2012 | 986 views | 0 0 comments | 4 4 recommendations | email to a friend | print
Bob Bernick, Utah Policy Contributing Editor
Bob Bernick, Utah Policy Contributing Editor
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Attention lobbyists, special interest groups and others who may want some cash from Utah State government: There is officially an extra $46.38 million to fight over come the 2013 Legislature.

Actually, there is more than $85 million in surplus from the fiscal 2011-2012 budget, which ended June 30.

(That is just 1.7 percent of the $13 billion state budget last year, so the GOP legislative majority did a pretty good job in budgeting how much the state would take and spend over the 12-month period.)

However, by law, some of that cash has to be squirreled away in various Rainy Day and other savings accounts.

So, says the governor’s budget office and the Legislature’s fiscal analyst, only $46 million plus change can be spent by lawmakers come the next general session, which meets early next year.

Of course, the fiscal conservative Republican majority doesn’t have to spend any of that one-time cash.

They could save it.

They could give some back to taxpayers in refunds.

Or they could spend some and save the rest.

Top legislative leaders – meeting Tuesday afternoon as the Executive Appropriations Committee – warned that while having extra money is better than having deficits -- in a $13 billion budget, ending the last fiscal year with less than $50 million in surplus really isn’t much.

And with the needs of student growth in public and higher education, Medicaid, corrections, public safety, state parks and other programs that thirsted for dollars during the Great Recession, that $46 million could be spent in a heartbeat.

“I just want to say how great these numbers are,” said House Speaker Becky Lockhart, R-Provo.

Having executive and legislative economists so closely estimate state revenues six to 12 months ahead – needed for accurate budgeting by legislators – “makes our jobs as stewards of taxpayer dollars so much better, because we are confident of your numbers,” she said.

Just how federal spending reductions will affect Utah and other states is unknown, she said.

“But we are proceeding pretty steadily” along a fiscally sound road, Lockhart added.

“Some may look at this $46 million and say, “happy days are here again.” That someone will get their pet project – I want to be very clear, NO!”

Said Senate budget chairman Lyle Hillyard, R-Logan, the longest serving lawmaker now sitting: “In these troubled times of fluctuating revenues, our (economists) have done an outstanding job.

“We don’t have any holes (caused by budget deficits),” said Hillyard. “We would like more revenue (surpluses). But we’ll take this.”

It’s almost assured lawmakers won’t give any of the extra $46 million back to taxpayers.

It would cost too much, for example, to cut all income-taxpayers a $5 refund check, or whatever the $46 million would end up being spread across the state.

Last year the sales tax collections actually came in 1.2 percent LOWER than the year earlier, not a good sign.

But the personal income taxes came in 7 percent higher and the corporate income tax was 4 percent higher than fiscal 2011, showing that more Utahns are working, and many who are, are making more money.

Republicans across the nation, including Utah, during the presidential debate are criticizing President Barack Obama’s federal stimulus spending program, saying it was a waste of billions of dollars.

A sheet passed out Tuesday, however, shows that in fiscal 2012 the Utah Department of Transportation received 55.1 percent more in federal highway funds, or more than $157 million more, than it did in fiscal 2011.

Legislative leaders also heard more financial good news: The new office of inspector general for Medicaid fraud/inappropriate payments is on the road to recouping nearly $29 million in wrongful payments to medical providers.

Inspector General Lee Wyckoff told the EAC members that his office is spending around $2 million in state and federal monies on his staff, but has recovered, and has in the bank, $7.5 million as of June.

In addition, his office is in the process of collecting another $2.6 million and has $18.3 million in the hearing process.

Finally, the office has sent out about $400,000 in disputed payments during June.

The federal government pays about 75 percent of Medicaid (although that percentage is dropping as the federal government tries to curb deficit spending), while the state pays about 25 percent.

Thus, as Wyckoff’s auditors find and collect bad Medicaid payments, the feds get 75 percent of it and the state gets 25 percent (roughly speaking).

Still, it is clear that come the 2013 Legislature there will be some extra Medicaid funds to spend through Wyckoff’s work – money collected from clear Medicaid fraud or from overpayments made through mistakes in the “complex” federal program for health care for poor and disabled Utahns.

The less general fund monies lawmakers have to dedicate to Medicaid, the more they can spend on other needy state programs or consider returning to Utahns via future tax cuts.

For the real policy-wonks among UtahPolicy followers, you can review some of the reports provided to the legislative bosses Tuesday here.
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