Utah's economic engine is revving, but the state faces fallout from a booming population, the potential closure of Hill Air Force Base and high energy prices, according to a new report.

With more than 50,000 births in Utah in 2004 and a wave of school-age children expected in the coming decade, Gov. Jon Huntsman Jr. is placing economic revitalization at the top of his to-do list.

"The reason the economy is No. 1 is because we've got to pay the bills for education," Huntsman said Thursday. "I don't believe in just taking a static pie and taking more one year for this, more another year for something else. I believe fundamentally in expanding the pie. The only way you can do that is through economic revitalization."

Utah ranks as the seventh fastest growing population in the nation, according to the 2005 Economic Report to the Governor. The state's population grew 2.3 percent in 2004, more than twice the national rate.

"We have a strong internal rate of growth that is here and always will be here," Huntsman said. "In fact, it's getting larger with each passing year. This 50,000 number is a message loud and clear that we have a growth engine that will be with us forever."

The report noted that Utah's economy improved in 2004, with job growth of 2.5 percent compared to a 1 percent rate nationally.

"Things are looking good in the state of Utah, but there are some factors that could possibly threaten that," said Robert Spendlove, economist for the Governor's Office of Planning and Budget. "The increase in school-age population is definitely a challenge for lawmakers. However, as much of a challenge as the school-age population growth will be, the growth in the retirement age population is becoming an even bigger issue."

Over the coming decades the number of people 65 years and older will skyrocket. In 2000, for every 100 working people — 18 to 64 years old — there were 14 people 65 years old or older. By 2050, the retirement age population will increase to 34 people for every 100 working people.

Other concerns include the possible closure of Hill Air Force Base, which would dramatically affect Utah's economy. Defense spending in 2003 totaled $3.1 billion, the report said.

Huntsman said tax and regulatory reforms are needed, and he lamented that the state was "not in the game" in promoting travel and tourism.