‘Money is getting tight’ – Legislative leaders racing to set next year’s budget, including a big tax cut

Utah Capitol 21

Legislative leaders are warning lawmakers money is getting tight as they work to set next year’s budget.

Despite excess revenues in the neighborhood of $1.1 billion this year, most of that is already allocated for big-ticket items on the docket this year. If all goes according to plan, lawmakers have already earmarked at least $980 million of that extra money.

  • $341 million for an income tax cut as part of the sales tax overhaul.
  • $75 million from the general fund for a sales tax cut
  • $72 million to pay for the legislature’s scaled back Medicaid expansion
  • $330 million to pay cash for the final construction of the new Utah state prison in Salt Lake City.
  • At least $170 million for increases in education funding.

“Those first two numbers are question marks,” said Sen. Jerry Stevenson, R-Layton. Stevenson is the Senate chair of the Executive Appropriations Committee, which means he’s currently in the thick of budget negotiations.

The final amount of the tax cuts will depend on how much money lawmakers will have to work with once the big financial issues are taken care of. That includes covering the increases in health insurance and benefit costs for public employees, any cost of living or other raises, other boosts in public education funding. So, it’s not difficult to see how budgets could get tight, especially if lawmakers want to implement two big tax cuts on top of the other spending.

“I don’t know what we have yet,” said Stevenson.

The amount of money they have to spend may become a little less murky on Thursday. Sources tell UtahPolicy.com they’re expecting another round of revenue projections, hopefully on Thursday which they will use to set the final budget bill. The general hope is the new set of financial numbers will be rosier than February’s numbers. Once that amount is known, lawmakers can determine how much money they’ll have for individual spending bills, which will be funded during the final week of the session.

House Speaker Brad Wilson, R-Kaysville, said earlier this week that the boost in education funding, normally measured in an increase in the weighted pupil unit, the basic measure of spending, could look a little different this year.

“Directionally, we’re heading toward a boost in funding for education, but it may not come in the traditional WPU,” he said.

Wilson explained that leaders want to invest in education funding, but some other programs outside of the WPU may see an increase. Those could include more funding for school readiness programs and at-risk students and increasing the teacher salary supplement for STEM teachers.

The final decisions for next year’s budget must be made by the Executive Appropriations Committee by Friday. The committee is scheduled to meet to vote on the final budget recommendations Friday afternoon at 12:15.