Budget forecast looking rosier

Gov. Olene Walker and Utah's 104 state lawmakers could have millions of dollars more to spend than they have let on — perhaps $60 million or more above the budget projections announced this week.

"It looks far better" than the projections, Walker admitted after Thursday's monthly KUED press conference.

Both the governor's office and legislative fiscal analysts released budget projections this week, and both budgets identified a $38 million budget deficit in the current budget year, which ends June 30.

However, the Utah Tax Commission released a report on Monday showing that tax collections were $23 million higher than expected, meaning the state, barring another recession, is on its way to a healthy budget surplus, not a deficit.

Walker said the Tax Commission report, called a TC-23 report, is "a ray of sunshine," and there is optimism the state's rebound from the recession will hold throughout the Christmas season. If that happens, the state could be left with a big pot of cash to balance out the current budget, and there might be leftovers for the cash-strapped 2004-05 budget year.

Walker added that her budget was crafted without the benefit of the latest data from the TC-23 report, which logged tax collections through the first five months of the fiscal year. The projected deficit, she said, was based on early information that might be outdated given the state's current tax collections.

Doug Macdonald, chief economist for the Tax Commission, said he is not certain how the fiscal analysts with the governor and Legislature came up with a $38 million deficit number. But he is certain tax collections are "$23 million, almost $24 million above" projections through the end of November.

Lawmakers will receive an economic report in late February in the days just prior to adjournment, and those revenue projections will provide the basis for next year's budget.

"I hope the Legislature has the luxury of seeing higher revenue projections," Walker said.

The strategy of not revealing all the tax revenue that is available is a time-honored tradition on Capitol Hill. It allows lawmakers to hold budget hearings without any promise of new revenues, and that cuts down on the clamoring by special interests for more and more money. And when money comes available late in the session, the decisions on how and where it will be spent usually fall to the Executive Appropriations Committee, consisting primarily of leadership.