New revenue estimates show the state has about $340 million less than expected to spend this legislative session, and, as a result, fewer funding requests will be met for things such as education, health and road fixes.

It is estimated legislators now have about $613 million in available surplus money to spend, with more than double that amount in requests for funding. The surplus is new money that would be used to fund expanded or new programs, building projects or tax cuts.

"The main challenge we will have is the expectations," said Senate budget chairman Lyle Hillyard, R-Logan. "People, when they look at the reality versus the expectations, there are going to be some disappointments."

Some reasons for the lower revenue estimates include a deflated national economy, lost tax revenue resulting from President Bush's economic stimulus package, and also a change in interest rates.

But the numbers are still the third-highest increase in revenue in the history of the state, according to Hillyard. "The past two years were stupendous," he said.

From the podium on the House floor, Speaker Greg Curtis, R-Sandy, said that even with the new numbers, "there is a significant amount of money" that can be spent. Still, "some adjustment in appetite" must be made.

During the remaining weeks of the session, lawmakers will determine what budget requests should be funded. Republican leaders declined to list any specific programs that might lose out but said they would review every request and even several million in tax cut proposals — specifically, the House Republican caucus has already voted in favor of $100 million in property tax cuts, while the Senate Republicans have also said they would like some cuts — to see what deserved to get money.

"Everything, including transportation, health and public education, will all be reviewed," said House budget chairman Ron Bigelow, R-West Valley. "There will be discussion on all these issues about what the priorities are."

On the Democratic side, Senate Minority Leader Mike Dmitrich, D-Price, said he is worried some pet educational programs such as school counselor programs and literacy improvement will be impacted.

The new estimates show a decrease of $212 million in projected revenue in the state's education fund, which is funded by income taxes. The general fund has a decrease of about $129 million.

"It's going to take some of our priority items," Dmitrich said in terms of education funding. "With the general fund, there's a lot of little items that could be impacted, but we've been treated fairly well in the past."

In December, the state estimated it would have about $954 million to spend on top of base budget amounts. The new revenue estimates put the available spending at $613 million, with about $411 million in the state education fund and $202 million in the state general fund.

The Legislature previously approved $11 billion in base budgets, which are essentially equal to last year's funding. The remaining budget discussions will focus heavily on the new spending.

Beginning today, legislators will meet in their individual committees to discuss new spending priorities. Legislators are also planning to meet in the Executive Appropriations Committee at 4 p.m. to officially adopt the revenue estimates and start sifting through spending requests.

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Contributing: Bob Bernick Jr., Lisa Riley Roche

E-mail: nwarburton@desnews.com