Utah budget running $100 million in black

Following years of shortfalls and belt-tightening, Utah state government has a nearly $100 million surplus in the general fund, a monthly revenue report released Friday by the Utah State Tax Commission shows.

It's the largest surplus since 2000, when the state closed out its fiscal year $120 million ahead.

And that's welcome news, says Gov. Olene Walker, who will leave office in January.

"This definitely shows that the (Utah) economy is turning around," Walker said in a prepared statement Friday as she returned from former President Ronald Reagan's funeral in Washington, D.C.

"We expected that" Utah's economic recovery "was not a curve but an 'L' with an upturn on the end," said Walker. So the quick upturn in surpluses toward the end of this fiscal year is not a complete surprise.

The surplus "is also an indication that we estimated well" in setting and readjusting the fiscal 2003-'04 budget, said Walker.

Walker has already said she'll call a special legislative session in late summer. And if she wants to spend any of the surplus herself, she'd have to get approval of the Legislature then.

But Amanda Covington, Walker's spokeswoman, said there are no plans to put any budget items on the special session call.

"She will deal (with the surplus) in her normal budget recommendation process," which culminates in December when Walker will suggest a fiscal 2005-'06 spending package.

But Walker won't be in office for the 2005 Legislature, where the new governor and lawmakers will set that budget.

"Remember," said Covington, "The law says that half of this surplus goes into the Rainy Day Funds" unless it is appropriated beforehand — and there won't be a special session to do that.

Still, lawmakers can appropriate out of those Rainy Day Funds, as they did in the early 2000s.

But the state's top AAA bond rating could be in jeopardy if legislators don't start replenishing those surplus funds, warns State Treasurer Ed Alter. Lawmakers drained the then-$120 million funds in the early 2000s to make up part of a combined $700 million revenue shortfall.

Tax Commission chief economist Doug Macdonald said Friday with one month to go in the fiscal year, which ends June 30, the state's two main funds, the Uniform School Fund and the general fund, together are running a $98.07 million surplus.