Look for Utah GOP legislators to pay cash for the new Utah State Prison.
Monday morning, Republican Gov. Gary Herbert and majority leaders announced a $1.321 billion surplus for this current year, which ends on June 30.
GOP House caucus members were briefed on the plan in a closed House caucus just before they went into a special session to pass the compromise Prop 2 – medical marijuana – law.
Lawmakers will take $125 million in one-time surplus monies coming in this year and $110 million in ongoing tax surpluses to come up with the $235 million for the prison this next year.
The new prison is being built in the northwest portion of Salt Lake City, scheduled for opening in a few years.
Pouring cash into the construction will greatly reduce bonding, which the Legislature approved several years ago.
After other deductions are made, lawmakers and Herbert will have “free revenue” of $521 million in one-time monies and $565 million in ongoing new tax revenue, which will be allocated one way or the other in the upcoming 2019 Legislature, which starts Jan. 28.
One GOP source told UtahPolicy.com that the above numbers might decrease by several tens of millions of dollars because many wealthy Utahns pre-paid some of their state income taxes believing they were going to get a larger federal income tax cut than ultimately came to them with the Trump/GOP congressional tax cut earlier this year.
But overall the huge tax surpluses are coming because of Utah’s growing economy and the federal tax cuts.
Herbert remains in office next year – halfway through his last term.
But the Legislature will have new leaders: Sen. Stuart Adams, R-Layton, replaces retiring Sen. President Wayne Niederhauser, R-Sandy; and Rep. Brad Wilson, R-Kaysville, replaces Speaker Greg Hughes, R-Draper.
Both new Senate and House leaders say that they want to save much of the new surpluses – one-time and ongoing – and spend much of the rest on roads and other cash-needy projects, like buildings.
However, the new revenue estimates show ongoing tax surpluses of $488 million in the state Education Fund.
In the 2018 Legislature, leaders promised to pump around $350 million more into public schools, over a several year period.
The ongoing revenue surpluses announced Monday could speed up that spending on schools – much of which would go into teacher salaries.
However, at the same time, by a 2-to-1 margin, voters last month rejected a 10 cents per gallon gasoline tax, the lion’s share going to public schools.
So GOP lawmaker and Herbert have received mixed messages on significantly increasing school funding.
Utah continues to suffer from large classroom sizes and remains last in the country in per-student spending.
Herbert will release his recommended 2020-2021 budget on Thursday, which will include updated revenue spending/saving for the current year’s budget – the $1.3 billion surpluses – announced Monday.