Dueling Surplus Numbers Muddy Utah’s Budget Picture

Utah Capitol BuildingWhat’s $7 million among friends?

In the case of Utah’s $13 billion 2015 budget, not much, apparently.

It can be very confusing reporting on Utah’s state finances. So it is always best to keep all your figures straight.

A new report by the Legislature’s Fiscal Analyst Office, seen here, says the state’s two main funds – the General Fund and the Education Fund – ended the last fiscal year with a $96.2 million cash surplus.

A day earlier, Gov. Gary Herbert issued a press release saying the state has $103 million in surplus from last fiscal year – a difference from the analyst’s numbers of $6.8 million.

So, who is right?

Remember the old TV commercial where two folks are arguing over a product – and in jumps another actor who says: “Stop! You’re both right!”

Well, same case here. Mostly.

The Legislature’s report looks ONLY at the difference between what was authorized spending in state budget bills for fiscal 2015 and what revenue came in during the same 12 month period – July 1, 2014, to June 30, 2015.

And that difference is $96.2 million extra in taxes raised above budgets authorized.

Herbert’s budget office adds in monies that were AUTHORIZED in the budget bills and then how much was SPENT, compared to taxes taken in.

So, state agencies were permitted to spend $6.8 million more than they actually did – and then compare that to tax revenue collected.

Add the over-collections — $96.2 million – with the unspent monies that could have been spent — $6.8 million – and Herbert’s $103 million is also accurate.

Now, out of the $96.2 million – the actual over-collections last year – a number of monies must be put aside by law – a certain percentage to the Rainy Day Fund, some for this savings pot, some for that pot, and you end up with – as the Fiscal Analyst Office reports — $43.8 million lawmakers in the 2016 Legislature can spend, save, give back to taxpayers, or just hide in old coffee cans buried on the Capitol lawns.

Thus, in future media reports you may read or hear that the state has $103 million in surplus from last year.

That’s true.

You may read the state took in $96.2 million more in taxes last fiscal year than budgeted for.

That’s true.

And you may hear that lawmakers have $43.8 million in surplus monies they can spend in the 2016 Legislature.

That is also true.

If lawmakers decided to take away from state agency budgets the $6.8 million that agency bosses didn’t spend last year and spend it on something else – outside of those budgets — then you can also say that those monies are “surplus” and are being spent in a different way.

Well, maybe you can say that.

But here’s an example where you couldn’t: Let’s say lawmakers approved the state Parks Division buying a new nifty four-wheel-drive truck costing $35,000.

But for various reasons Park bosses couldn’t actually purchase the vehicle during the fiscal year ending June 30 – but had it on order. Under Herbert’s accounting that $35,000 is “surplus” monies.

However, come July 15 this year – after last year’s financial books closed – Park bosses cut a $35,000 check and bought the truck. That $35,000 is not really “surplus” anymore, is it? It’s spent.

The Fiscal Analyst figure takes that into account – since it assumes all of the Park Division’s budget was spent.

So, it is that final Fiscal Analyst number – the $43.8 million – that is the most important today.

For that – combined with February 2016 updated revenue projections for the fiscal year 2017 – is the final number lawmakers will be fighting over as they put together next year’s overall state budget this coming general session.

If you have any questions about what is written above, don’t bother asking me. I was lucky to write this story at all.

Just know this: Last session legislators had, in total, more than $700 million in “surplus” funds to spend – and they spent nearly all of it.

They won’t have even a third of that much extra cash in the 2016 Legislature – but still likely have hundreds of millions of dollars more to spend on all kinds of programs next year as compared to the current year’s budget.

Except they won’t likely be spending any of that money of Medicaid expansion. Don’t even get me started on trying to figure that one out.