Before those pesky Democrats or other “big spenders” get carried away with the $240-or-so million in extra money the state took in last fiscal year, meet the Republican Grinches.
In what has become an annual “Come to Jesus” meeting, the Executive Appropriations Committee – made up of the leaders of the House and Senate, both parties – heard some sad news Tuesday afternoon.
Utah doesn’t have the extra cash some were counting on.
Yes, there was $240-plus million in surplus tax collections from the 2012-2013 fiscal year, which ended July 30.
But much of that money, by law, must go into the state’s Rainy Day Funds. (Since all of that surplus came in the Education Fund, powered by personal and corporate income tax, the mandatory draw must go into the Education Rainy Day Fund.)
That leaves $122 million available to spend, save or otherwise dispose of.
In the current budget year, which ends next June 30, there could be another $130 million in surplus cash – although with six months yet to run in this budget year, that number is still fluid.
So, isn’t there still likely to be a new quarter of a billion dollars lawmakers can spend come January?
Yes – but there are already demands on that cash.
Some comes in the form of growth in student numbers; or pay raises for state employees, teachers and college professors; or building maintenance; or payment for state prisoners housed in county jails.
And the list goes on and on:
— Between $282 million and $317 million more in routine, ongoing increased spending. In theory that money must come from natural revenue growth, and those new estimates will come Dec. 10.
Utah’s economy has been growing faster than most other states’, faster than the nation as a whole.
But a recent state economic analysis shows that Utah’s economy is slowing down, and it won’t grow as it has the past year over the next 12-to-18 months.
— The Office of Legislative Fiscal Analyst also said Tuesday that between $214 million and $224 million will be needed to meet various one-time needs.
This is the area where the $240 million in one-time surpluses could go – if not for the required draw into the Education Rainy Day Fund.
In general, the fiscally-conservative Legislature doesn’t like to spend one-time cash surpluses on ongoing programs, like employee salaries.
But, unless the state is in recession, most of the cash surpluses of one year can turn into ongoing revenue growth for the next – assuming taxes aren’t cut by lawmakers.
To dampen down expectations that there is ANY extra cash in the coming legislative general session, GOP leaders like to get a November briefing in which the sorry financial state of Utah is explained to those drooling over hoped-for greenbacks.
That was the talk from legislative budget staffers Tuesday.
Said Jonathan Ball, the Legislature’s chief budget officer: “There’s some excited talk about revenue growth, the downer that I am, I’m going to talk about the cost of growth. To give you some perspective; the budget chairs asked me to do this.”
In short, said Ball, there is, like most years, more demands on available revenues – even before the real budget-setting process begins in the January general session – than money to pay for them.
“We told you last month, that (after payments to the Rainy Day Funds) there was $122 million in surplus from (fiscal) 2013.”
The state is currently in the fiscal 2014 budget year, which ends next July.
“If things go good, in the current year their could be $130 million” in one-time surpluses, some of which legislators historically spend during the mid-fiscal year general session – in this case next January.
Sen. Lyle Hillyard, R-Logan, the Senate budget chair, said it disturbs him when the media combines those two numbers, and everyone thinks there is hundreds of millions of dollars to spend during the general session.
But in reality these are “one-time monies,” noted Hillyard.
And citizens and special interest groups believe it can be spent on ongoing programs in the next budget.
“I tell people there is a clear difference in one-time money and ongoing revenue. I look at ongoing as we look” to balance the next year’s spending and tax collections, said Hillyard.
That budget is the 2015 fiscal year, which starts July 2014 and runs for 12 months.
So, GOP leaders don’t want you asking for more state aid, come the 2014 general session.
And you shouldn’t be too depressed if new revenue growth is spent in the normal places – pay raises for government workers, growth in student populations, Medicaid and such.
