Utah ends fiscal year with budget surplus

If you hear a big sigh from the Utah Capitol it's state leader's hearing they did good in trimming hundreds of millions of dollars out of the state budget last fiscal year — and reached year's end right on target, a new report shows.

The fiscal year-end Utah Tax Commission report shows the state closing out the last month of the 2008-09 with a $31 million tax surplus in the general and education funds and an $11 million surplus in the transportation fund.

Out of a $10.6 billion budget, that's pretty close.

But hold on to your tax hat.

While lawmakers did a fine job in fixing a badly leaking 2009-2010 budget (which started July 1), they plugged many of the holes with one-time monies — mostly from the federal stimulus package.

And come next January's Legislature, lawmakers will have to make up a $700 million gap in the 2010-2011 budget, which will start July 1, 2010.

And that will really be painful, House Speaker Dave Clark, R-Santa Clara, said Wednesday.

Legislative chief budgeter Jonathan Ball says after a few other required funds transfers are made for the just-finished year, "we believe we'll hit right on" and close out the books with either a very small surplus or deficit.

Said Clark: "We were optimistically pessimistic" — in other words, GOP legislative leaders trimmed back Huntsman's recommended midyear budget adjustments last general session even deeper to avoid a year-end deficit, and they were right to do so.

"After all," Clark jokingly said, "we ended up passing the 2009 budget three times — we should be pretty close."

Lawmakers adopted the fiscal year 2009 state spending plan (which closed out June 30) first at the end of the 2008 Legislature in March of last year. Seeing tax revenues plunge, they came into a special session last September and cut more money from the budget. Then, at the start of the 2009 Legislature they spent several weeks cutting spending for this fiscal year yet again.

The new TC23 commission report shows that state tax revenue in the two main funds dropped by 12.2 percent from FY 2008 to FY 2009, which ended June 30.

That's a tough hit. "And I don't know if we've hit bottom yet. But we have to be pretty close to the bottom," said Clark, a southern Utah banker.