Utah tax revenue is down by 9%? Whew!

Since when is it good news to learn your revenues are down 9 percent?

When you budgeted for a revenue drop of 12 percent.

Utah GOP legislative leaders are actually pleased that a new Tax Commission report shows the state's general and education funds are down 8.9 percent over the first nine months of the current fiscal year.

"We budgeted for a 12 percent drop," said Sen. Lyle Hillyard, R-Logan, the state Senate chairman of the Executive Appropriations Committee, which puts together the state's $10.6 billion budget.

The "good news" — if any dramatic drop in revenue can be called that — means that most likely the Utah's 104-member part-time Legislature won't have to come back into special session in May or June to further trim the current year's spending plan.

And, says Hillyard, "if we don't have to come into special session this fiscal year, we probably won't have to come into special session at all" later in 2009 to readjust the 2009-10 budget, which starts July 1.

That means both state employees and smokers can relax a bit.

Workers won't have to worry about further layoffs or unpaid furloughs, and smokers won't have to worry about a special session where the state's tobacco tax would have likely gone up.

GOP legislative leaders had already warned that the cigarette tax would be the first place they'd look if state revenues fell even further.

"If we are $50 million or less" in the red come fiscal year's end, the state should be able to get through without a special session, Hillyard said.

But if it appears, either this year or next, that the state is running a $50 million or more deficit, then maybe a special session will be needed, he added.

Utah is still by no means out of its fiscal mess, however.

For example, "we trimmed public education by nearly 16 percent. But then we backfilled (mostly with one-time monies) to only a 5.2 percent reduction," warned Hillyard.

If Utah's tax revenues don't rebound quickly, that shortfall must be dealt with in the 2010 Legislature, he said.

Legislators didn't tap the state's $414 million Rainy Day Fund, nor did they touch an extra $100 million lawmakers put aside for public education several years ago.