3.4% budget boost sought

Gov. Olene Walker's proposed $8 billion budget, unveiled Monday, was greeted by the expected jeers and cheers. And another thing was clearly evident: She's going to gore some political interests, including fellow GOP leaders, who have opposed many of her initiatives.

By recommending cuts in roads and water and banking on a rebounding economy, Walker expects to round up $140.7 million in new revenue for public and higher education, $30.8 million more for programs for the needy and $101.7 million for other state programs. That all adds up to a 3.4 percent overall increase in the state budget, which includes a 2 percent pay increase for state employees.

And she does it without a general tax increase or a hike in the gas tax.

"This is the best budget under current revenue projections we can put together," she insisted.

It is an ambitious first budget for Walker and one that puts her at odds with legislative leaders of her own party.

"I haven't sensed any change in the legislative will to maintain roads and water projects," said Senate Majority Whip John Valentine, R-Orem. "There are areas (of Walker's budget) legislators will have extreme difficulty with."

But Walker wasn't surprised by the GOP leadership response. "They had problems with lots of it," she said.

How does she expect to spend more money and not raise taxes? Walker's fiscal analysts say the economy will grow next year by about $104 million, still far short of the $273 million she needs to pay for everything she wants. However, the latest report by the Utah Tax Commission shows a $23 million surplus in the current budget cycle — an encouraging sign, Walker said, that the economy is rebounding faster than her initial projections. But current projections aren't that rosy, and Walker's plan to come up with $273 million to pay for everything she wants involves shifting money around. In addition to the $104 million in new revenue, she plans to:

• Eliminate a sales tax diversion for water projects, which would divert $14 million to other state needs.

• Eliminate a sales tax diversion for so-called local B and C roads, diverting $18 million.

• Take $65 million in annual tax revenue now going to highway projects ($15 million would go back to highways next year, but without any guarantee it would continue after next year).

• Require small-business owners to file their taxes quarterly, which would raise $30 million the first year.