Utah state budget
From Sunshine Review
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Utah closed a $1 billion budget gap for fiscal year 2009 but the Center on Budget and Policy Priorities estimates a $720 million budget gap for fiscal year 2010. [1] Despite looming budget gaps the state of Utah managed to close the FY 2009 budget gap without raising taxes or emptying its rainy day funds. “We don’t’ think we’ve hit bottom yet,” Senate Finance Committee Chairman Wayne Niederhauser. [2] With a combination of General/Education Fund budget reductions, $470 million, revenue enhancements, $70 million, federal assistance, $390 million, and one-time fund balances the state closed the budget gap. For FY 2010, lawmakers reduced state spending by about 9 percent on average. [3] In December 2008 Governor Jon M. Huntsman announced a 7 percent cut to the state budget, however, in light of declining state revenues the cuts increased to approximately 9 percent. "We've cut it any number of different ways. We have put people first and foremost. We think we have prudently put forth a budget that still keeps a lot of money in the rainy day fund," said the Governor. But Huntsman noted that some government revisions are necessary. "I think we've got to think anew about how we take care of the needs of the third fastest growing state in America as we move forward," he said.[4]
[edit] Impact of budget woes
- Utah's budget for the fiscal year 2010 is expected to shrink from $11 billion to $10 billion. State spending will be reduced about 9 percent. Public schools will be cut back by about 5.2 percent. [5]
- The State Court of Utah incurred an 8.5 percent total cut for FY 2009. Additionally, proposals are being floated for an additional 11 to 19 percent cut for FY 2010.[6]
- In light of $54.5 million in reductions for the Central Utah Correctional Facility's maximum security expansion to backfill all state agencies facing the budget crisis, 550 inmates could be released as early as September 2009.[7]
- The Utah Science, Technology and Research program faces funding cuts since the current legislature does not appear to plan for utilizing Utah's rainy day fund.[8]
- The state slashed higher education's budget by 9 percent and should the economy continue towards a downward trend more cuts are expected. However, state colleges have had to increase tuition in light of budget cuts. The University of Utah and Snow College will see the steepest increases at 9.5 percent - annual hikes of $430 and $187. [9]
- Utah's non farm wage and salaried job count for February 2009 decreased by 2.1 percent. Utah has lost approximately 26,000 jobs over the past year, lowering total wage and salary employment to 1,221,600. The state's overall unemployment rate increased to 5.1 percent in February 2009 compared to 3.3 percent in February 2008. In February the state recorded approximately 70,400 unemployed, a 25,400 increase from February 2008. Only government, education and health care, and natural resources added jobs over the past 12 months. [10]
[edit] Budget background
Utah's fiscal year begins July 1 and ends June 30 of the following year. Every year the state's agencies submit budget requests along with past expenditures and allocations. Usually by December the Governor develops a budget recommendation which is then delivered to the Legislature. Following a series of hearings and discussions the Senate and the House make any necessary changes before approving the final bill. Once the appropriations bills are debated and the Legislature as a whole passes them the bills are signed by the Governor. [11]
- In March 2008 the American Legislative Exchange Council (ALEC) presented a report, Rich States, Poor States, that stated that Utah's low taxes and controlled spending mean it's primed for prosperity. "The economic growth really, really shows that limited government and low taxes are the way to prosper in this world," said Jonathan Williams, ALEC's director of tax and fiscal policy task force and co-author of the report. [12]
[edit] Budget figures
The following table provides a history of Utah's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $13.0 [13] | $67.6 [13] |
| 2001 | $14.3 [13] | $70.1 [13] |
| 2002 | $15.5 [13] | $72.7 [13] |
| 2003 | $16.1 [13] | $75.4 [13] |
| 2004 | $16.7 [13] | $80.9 [13] |
| 2005 | $17.3 [13] | $88.9 [13] |
| 2006 | $18.5 [13] | $98.0 [13] |
| 2007 | $19.9 [13] | $105.7 [13] |
| 2008 | $21.3 [13] | $114.0 [13] |
| 2009 | $22.8* [13] | $122.9* [13] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about why the crisis exists
- A study by the Rockefeller Institute of Government said that in the fourth quarter of 2008, Utah lost 16.5 percent in tax revenues while the national average was 3.6 percent. Utah's drop in corporate income tax was named the fifth worst in the nation. Sales tax revenues dropped by 16.8 percent compared to the national average of 5.9 percent. Utah's personal income tax revenues slipped 17.4 percent compared to a national average drop of 0.4 percent.[14]
- Andre Baksh, tax economist for the State Tax Commission, said several tax changes (including reducing the sales tax on food) also brought in less revenue. "When you add all those up, it does take a lot out of the base." While he said "the economy is taking a beating right now," the decline in revenues coming from the economy and not tax changes is around 7 percent. [15]
[edit] Proposed actions
[edit] Governor Jon Huntsman Jr.
The Utah state budget, according to Gov. Huntsman Jr. during a press conference on January 16,2009, "can be balanced without a federal stimulus package."[16] Governor Huntsman cited Utah's AAA bond rating and $420 million dollar rainy day fund as positive points for Utah's economy; however, while Utah is not reliant upon the federal stimulus package to balance the state's budget, Utah will benefit from the additional federal funds for projects throughout the state. [17]
[edit] Shutting down 1/3 state offices on Fridays
In reaction to the state's deficit Gov. Jon Huntsman Jr. shut down a third of state offices on Fridays — including driver’s licenses bureaus. Additionally he ordered 17,000 of 24,000 executive-branch employees to work their full 40 hours over four days instead of five.[18] In March 2009 the Governor emphasized that Utah should take advantage of approximately $61 million in federal stimulus money geared towards unemployment. Some lawmakers say they're leery of accepting the money because the state would be left footing the bill for the program once the stimulus money runs out. And by March 12,2009 the Legislature had not made the necessary law changes in order for citizens to qualify for the additional funds. [19]
[edit] Republicans
Republican lawmakers said that they are wary of accepting $61 million in federal stimulus money targeted to unemployment. In March 2009 the Governor stated that lawmakers should not pass up the funds but by the end of March legislators still had not made the necessary changes in order to accept the funds. Senate Majority Leader Sheldon Killpack said,"Any time you have to run legislation and change your state policy and code for one-time money, that doesn't make a lot of sense." Legislators said they looked into adding an expiration date on the unemployment funds so that when the federal funds ended so did the program. Republicans said that they are worried that the state would be left footing the bill for the program once the federal funds run out. However, Rep. Steven Mascaro said lawmakers plan to study the unemployment issue during the summer and consider whether to comply with the federal requirements.[20]
[edit] Democrats
In March 2009 Democrat legislators announced their own budget recommendations for FY 2010. Included in the recommendations are a $1.30 increase in the cigarette tax and an increase in motor vehicle registration fees. Rep. David Litvack said,"By incorporating these new sources of revenue, we were able to restore some of the on-going funding in our top priority areas, securing critical programs and services in health and human services for 2010 and beyond, and reducing the percentage of cuts to the ongoing base budget in public and higher education and public safety." Additionally the recommendations call for budget cuts and the use of federal stimulus dollars. But, contrary to proposals by the Governor, Senator Patricia Jones emphasized that the Democrat proposal calls for fewer cuts to priority areas like education. In public education reduces the cut from 17 to 12 percent and when including the stimulus dollars, public education only receives a 2 percent budget cut. "Our number one goal is to mitigate cuts in our priority areas, namely , public education, higher education, health and human services, and public safety," said Jones.[21]
[edit] Economic Stimulus Package
Utah is expected to receive $1.6 billion from the $787 billion dollar economic stimulus.[22] All told, the federal stimulus plan would create or save 32,000 jobs in Utah, based on White House estimates.[23]
For more information on how the federal stimulus funds are being used in the state of Utah, visit the state recovery website.
According to preliminary reports Utah is expected to receive:
- $390 million in education stabilization funds [24]
- $280 million in Medicaid stabilization funds [24]
- $270 million for transportation [25]
- $70 million towards energy [25]
- $40 million for water [25]
- $5 million towards community development [25]
[edit] Budget transparency
In 2008, the Utah State Legislature passed SB 38. The bill proposed the availability of public financial information on the Internet. Additionally it modified notice requirements of the Open and Public Meetings Act. [26] As noted below, Utah's spending transparency website was launched in May 2009.
[edit] Utah transparency news
- 05/22/09: Transparency Site Launched in Utah:
Spending transparency continues to spread, this week with the launch of Utah's new spending database. This site reveals some of the state's finances and includes expenditure and revenue data beginning with fiscal year 2009. In the next twelve months even more data will be put online, data such as financials for institutions of higher education, school districts, and charter schools. Overseeing this site and its contents are the Utah Transparency Advisory Board and the Department of Administrative Services (Division of Finance). The site does not post state employee salaries, although some information about Utah's employees' salaries is already available here.
- 10/29/08: New Coalition Member: since 1994, the Sutherland Institute has been working "to influence public policy in Utah according to enduring principles such as private initiative, self-reliance, and family as the fundamental unit of society." The Institute believes that transparency in state and local government is fundamental to maintaining liberty. After Senate Bill 38 "Transparency in Government Finance" passed, under the sponsorship of Senator Wayne Niederhauser, the Institute published "Transparency in Government" As an additional paper points out, though, local government transparency is necessary as well. The Coalition looks forward to seeing transparency practices spread down to Utah's local government entities through efforts of the Institute and others.
[edit] Legislation
Utah Senate Bill 38 (2008), Transparency in Government mandated the creation of a publicly available spending database by May 15, 2009. To learn more about SB 38, read the Sutherland Institute's policy analysis, "Transparency in Government."
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by Utah's spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Transparent Utah |  | |  | | | |
Although this database does not list information about Utah's contracts, that information has been made available here.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[27]
- Utah will receive an estimated $1,163,569,856.[28]
- The economic recovery website to show how legislators and government officials in Utah are spending Federal funds is available here.
[edit] Support for creation of the database
Utah Senate Bill 38 (2008), Transparency in Government was sponsored by state Senator Wayne Niederhauser.
[edit] Public employee salary information
There is information about Utah's public employee salaries available here, thanks to the work of the www.UtahRights.com website.
[edit] See Also
[edit] External links
- The Sutherland Institute
- Utah Waste Busters
- Utah Taxpayers Association
- Governor's Office of Planning and Budget
- Local government budget reports
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Department of Finance, Utah Budget
- [Department of Finance, Utah Budget 2009-2010]
- Utah State Legislature
- Utah State and Local Spending 1992-2010 Charts
- Utah
- Utah: State and Local Government on the Net
- National Center for State Courts: Budget Processes for State Budgets 2009
- US Census Bureau: State and Local Government Finances (Utah)
- Utah State Archives Catalog
[edit] Additional reading
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," March 13,2009
- ↑ Stateline.org,"Report: Utah first in economic competitiveness," March 18,2009
- ↑ Center for Public Policy and Administration,"Balancing Utah’s Budget in Tough Financial Times," March 25,2009
- ↑ KSL,"Governor orders state agencies to prepare for budget cuts," December 4,2008
- ↑ Salt Lake Tribune, "Utah Budget Cuts", March 9, 2009
- ↑ Lex Utah: Utah's Legal Scene, "Utah Budget Crisis Update: Court Budget Cuts", February 9, 2009
- ↑ Deseret News, "Funding cuts may force release of 550 inmates", February 10, 2009
- ↑ Deseret News, "Manana not soon enough to fund higher education" February 9, 2009
- ↑ Salt Lake Tribune,"Utah college tuition rising an average 7.5 percent," March 28,2009
- ↑ Main Street Business Journal,"Reviewing Utah's Employment `Gains` and `Losses`," March 2009
- ↑ Governor's Office of Planning and Budget,"Budget Process," retrieved April 7,2009
- ↑ Salt Lake Tribune,"Report says Utah's economy ready to charge," March 17,2009
- ↑ 13.00 13.01 13.02 13.03 13.04 13.05 13.06 13.07 13.08 13.09 13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 US Government Spending,"Utah State and Local spending," retrieved April 7,2009
- ↑ KSL,"Utah's drop in tax revenue biggest in nation," March 13,2009
- ↑ Deseret News,"State sees biggest drop in revenue," March 13,2009
- ↑ Utah NOW, "Governor's Monthly News Conference", January 16, 2009
- ↑ Utah NOW, "Governor's Monthly News Conference", January 16, 2009
- ↑ Stateline.org, "Four-day workweek grows on Utahns" February 2, 2009
- ↑ Associated Press,"Huntsman: Utah should take unemployment money," March 19,2009
- ↑ Salt Lake Tribune,"Legislators balk at $61M for jobless aid," March 18,2009
- ↑ Utah House Democrats,"House and Senate Democratic Caucuses - Budget Proposal," March 5,2009
- ↑ Utah,"Recovery," retrieved April 7,2009
- ↑ American Recovery and Reinvestment Act,"Impact," retrieved April 7,2009
- ↑ 24.0 24.1 Recovery Utah,"Stablization," retrieved April 7,2009
- ↑ 25.0 25.1 25.2 25.3 Recovery Utah,"Infrastructure," retrieved April 7,2009
- ↑ State of Utah,"Performance Elevated," retrieved April 7,2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal,"Stimulus Spending by State," March 12,2009
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