Legislators worry about state's 2011 budget health

While Utah state government may get out of this fiscal year fine financially, it's next year and the year beyond that worry top state bosses.

And according to a new study put out by a nationwide legislative group, Utah is not alone in future budget worries.

Most states are missing their tax-collection goals as of April of this year, says the National Conference of State Legislatures.

Utah is off on its personal income-tax collections — one of the worst showings among the 50 states — reports the NCSL. But the Beehive State is doing OK in its sales-tax collections and its corporate income-tax take. And it is up 96 percent in severance-tax collections.

"We should end this fiscal year (June 30) just about right on budget," says Jonathan Ball, the Legislature's chief budget officer.

Utah House Speaker Dave Clark, R-Santa Clara, recently warned that Utah may be able to struggle through until January of 2010 without a special legislative session or major adjustments in spending.

But the spring of 2010 could be trouble. And the 2010-2011 revenue picture "scares me spitless," says Clark, a southern Utah banker.

Between facing the end of a $400 million federal stimulus package, greater contributions to the state's retirement fund and mandates to fund student growth in public education and Medicaid-enrollment increases, Ball says Utah could face a $700 million "gap" for fiscal year 2011.

Legislators will set that budget in the next general session.

Because Utah used federal stimulus one-time cash and state revenue surpluses to "backfill" hundreds of millions of dollars into ongoing programs, especially public education and health care, if the current serious recession doesn't rebound quickly, really tough political decisions must be made.

Sound bad?

Other states are much worse off, the NCSL study shows. California, the poster-boy of bad state budgeting, could run out of money in mid-July this year if drastic program cuts aren't made and taxes raised.

Clark said Utah lawmakers will have to seriously look at raising the state tobacco tax and maybe even the alcohol tax — along with more budget cuts — come the 2010 Legislature.