Audit: Utah Becoming More Dependent on Federal Dollars

Who do GOP state lawmakers love to bash?

Democratic President Barack Obama and the federal government.

Where do we get the lion’s share of our state revenue?

Democratic President Barack Obama and the federal government.

A new state auditor report shows that for fiscal year 2014 – which ended last June 30 – Utah State Government got $4.368 billion from the feds.

And while the cash we’re getting from the feds is dropping this fiscal year (different reasons for that), the trend line for Utah taking more and more federal aid is clearly growing, says GOP Auditor John Dougall, who used to be one of those Republican legislators who hated to take federal money.

You can read his new report here.

Each general session – the 2015 Legislature starts Jan. 26 – legislators put together the state budget. The current year’s budget is just over $13 billion, and GOP Gov. Gary Herbert suggests a budget for fiscal year 2015-2016 of $14.3 billion.

But this is a budget of state revenues – which mainly come from the personal and corporate income tax and the state sales tax.

Dougall points out in his new report that for fiscal 2014 when you include the federal monies that come to the state and are spent on a variety of programs, Utah spent $17.433 billion last fiscal year.

And the fed money made up 25 percent – a quarter – of all the money that was spent by the state.

And that is more than the $2.919 billion that came in individual income taxes or the $2.149 billion that came in the state sales tax – the state’s main two tax revenue sources.

This coming Legislature, state economists estimate lawmakers will have $638 million in new money to spend – both in ongoing revenue growth and in one-time surpluses from last fiscal and the current fiscal year.

But all those numbers, while reassuring, shrink when compared to how much the federal government is transferring each fiscal year to our state government, Dougall says.

He adds: “In addition, the state reported another $2.052 billion in federally provided food commodities, loans outstanding, endowments, and loan guarantees for total federal assistance of $6.42 billion.”

Herbert is now trying to sell to conservative legislators his Healthy Utah Medicaid expansion program.

One of the governor’s arguments is that Utahns send back each year to the federal government (through federal taxes and fees) more than $400 million.

And it is only right that we get back most of those taxes in helping our own poor get health insurance.

Herbert’s Healthy Utah will cost the state only around $4 million over the next three years, while getting back hundreds of millions from the feds.

Dougall says: “Despite the decline in receipt of federal funds received during the economic recession, as the economy has slowly recovered Utah continues to increase its dependence on federal funding over the long term.”

Herbert and GOP legislators recognize this – and the Legislature has put together a special Federal Funds Commission to study the issue.

You can read what the commission is up to here.

But while Utah conservatives may want to become less financially dependent on the federal government, Dougall’s latest report shows just how difficult that would be.