Not enough to go around. Lawmakers facing tight budget year

Utah Capitol 27

Lawmakers are crying poverty this year, and new revenue estimates coming next week aren’t expected to bring much relief for budgeting efforts.

Right now, there’s about $641 million of new money, which is sometimes mistakenly referred to as a “surplus” sitting in the legislature’s Education Fund, which can only be spent on public and higher education and nothing else. That includes $251 million in one-time money and $390 million in ongoing funds. 

The problem for lawmakers is the General Fund, which pays for everything else, has only about $100 million of new money available, and next week’s revenue estimates aren’t expected to provide any breathing room.

“If we have any more money come in, it’s going to be education money,” says Sen. Jerry Stevenson, R-Layton, who is the co-chair of the legislative committee that makes final decisions on budgeting decisions. “It’s not going to be General Fund money.”

Legislators are staring at a laundry list of requests for spending, with very little money to meet all of those needs. As of last week, legislative staffers said they had 207 spending requests totaling more than $570 million. 

“Okay, so what’s the problem?” you might be thinking. There’s $500 million extra money they haven’t spent yet. 

There’s the rub. $343 million of those appropriation requests come out of the General Fund, which only has about $100 million available. Legislators say they’re only expecting the new revenue estimates to add another $30-100 million to the General Fund, which is far short of what is needed to meet all of the requests. An expected cost of living raise for Utah State employees (which will help cover the cost of an increase in health insurance premiums) will eat up about half of the new money available right now, and paying for Medicaid takes the other half. 

“Everyone wants money for their bills, but there’s just not enough slop in the trough,” said one lawmaker about the dearth of available funding.

House Speaker Brad Wilson, R-Kaysville, told reporters this week that he saw two proposals, one costing $20 million from the General Fund and the other with a $16 million price tag. “Both were good bills, but there’s just no money for them,” he said.

And the Utah Constitution forbids lawmakers from transferring money from the Education Fund to pay for those General Fund requests.

Legislators say the estimated $641 million in new money for education could grow when those new revenue estimates show up next week. So, what will they do with it?

$50 million of it is already spoken for as lawmakers used it to completely pay for the expected growth in the student population in the base budget process.

Next up is an expected increase in the weighted pupil unit, or WPU, which is the basic way that schools are funded in Utah. A one-percent increase in the WPU translates to about $33 million in funding. Legislative sources tell it’s reasonable to expect an increase in the WPU of about 4-4.5%, which is between $132 million and $148 million for schools. 

The WPU is money that goes to the school districts, and lawmakers are also eyeing some money for teacher raises, as well as putting aside cash into the education rainy day fund as a hedge against a future economic downturn.

All of that money flying around does not take into account the desire on the Hill to provide some sort of tax relief this session. If there is a tax cut, it will have to come out of the remaining $591 million in education money.

Had the controversial tax reform measure not been repealed earlier this session, lawmakers would have an estimated $250 million more in General Fund money available this year. That extra revenue would have been offset by a tax cut paid out of the Education Fund. 

New revenue estimates are expected to be released on February 22.