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Utah state budget revenue aren't bad, or good

Published: Monday, Nov. 15 2010 10:15 p.m. MST

SALT LAKE CITY — The state's latest revenue estimates aren't bad.

But they're not really that good, either.

While the exact numbers won't be made public until Tuesday, state budget director John Nixon said Utah should see at least some revenue growth in the current budget year that began July 1.

Just not very much.

Nixon said there should be less than $10 million in additional revenues, an amount that's statistically insignificant in a budget that adds up to more than $11.6 billion.

"The good news is it wasn't negative," Nixon said. "We kept it flat. It is a positive number. But it is a very small positive number."

Growth in corporate and individual income taxes, as well as sales taxes, is less than half of an average year, Nixon said.

"During the big boom years, we were growing double-digits," he said, recalling the hefty surpluses of the recent past that resulted in slashing taxes, not budgets.

"It's like a tornado coming through. You don't rebuild overnight," Nixon said. "Things are getting better. We've just come through one of the biggest recessions since the Great Depression."

Outgoing House Speaker Dave Clark, R-Santa Clara, also said that after two years of revenue estimates being in the red, it's going to take time to climb out of the recession's aftermath.

"We think we have bottomed out," Clark said. "I think we have quit going deeper, but we still find ourselves in that financial hole."

The new estimates are being released in advance of Wednesday's special legislative session, called by Gov. Gary Herbert to accept $101 million in federal stimulus funds for schools.

Legislative leaders are already planning on using $50 million of the stimulus funds to cover a shortfall in school spending from the previous budget year that ended June 30.

There are bigger budget worries, however.

That's because the state is using some $313 million in one-time money rather than ongoing revenue sources to balance the current budget, creating what's called a structural imbalance that can't go on for long.

Nixon said the governor will start to replace some of that one-time money in his new spending plan, due out in mid-December, for the budget year beginning July 1, 2011.

But correcting the imbalance has to compete with other state needs, especially in education. Last year, lawmakers were not able to fund enrollment growth in public schools.

University of Utah political science professor Matthew Burbank said state officials are going to have to manage expectations as the revenue estimates tick upwards.

"The state has done a lot of things that have been an attempt to simply say, 'We'll buy a little bit of time here,' " Burbank said. "Even though we're talking about better tax numbers, it doesn't mean our budget difficulties are over by any means."

Even though Nixon said revenue growth will stay slow for some time, he is optimistic Utah's budget concerns will be put to rest in the next couple of years.

"Utah's in a good position," he said, citing the state's economic development efforts. "As the state's budget director, I'm able to sleep better than a lot of my peers in other states."

e-mail: lisa@desnews.com

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