Legislature to face bad cash shortages

Month after month, it's more bad news for Utah state government tax revenues.

Legislative leaders say there's little chance that the state's economy will rebound quickly next year, and that means the 2010 Legislature, now three months away, will face serious cash shortages.

"It's more likely that we will start next (fiscal) year $150 million down than $50 million up," said Sen. Lyle Hillyard, Senate budget chairman, referring to last month's revenue estimates for 2010-11.

Combine the $150 million shortfall with an estimated $700 million tax revenue shortfall already projected, and if legislators don't raise any taxes or fees for the 2010-11 budget, they'll have to trim $850 million from state programs, resulting in what some call drastic cuts in programs, including public education.

Tuesday, legislative leaders heard reports from health, correction, tax commission and economic development agencies on what the future cut could mean to them.

Some lawmakers are already talking about raising the state cigarette and alcohol taxes and perhaps putting back on part of the state sales tax on unprepared food in an effort to offset some of the $850 million tax shortfall next fiscal year, which starts July 1.

Hillyard said Tuesday he still doesn't see the need for a special legislative session to further cut the current budget as state agencies should be able to make it to January's general session on their current funding.

"No state agencies should plan on receiving large influxes of additional revenue," said Rep. Ron Bigelow, R-West Valley, the House budget chairman. Further cuts should be counted on, he added.

Some additional cuts could result in:

Personal income tax rebates could be delayed next spring.

Cuts to programs that provide health care to the under-insured and uninsured. State care for 1,000 special needs children could end, but the kids should still be able to qualify for Medicaid. However, the children and their parents may have to travel to Salt Lake City to get treatment.

Payments to Medicaid providers, like doctors, hospitals and dentists, will further be reduced. In just three months, 25 dentists have gotten out of Medicaid, said Senate Minority Leader Pat Jones, D-Sandy, resulting in mostly poor kids no longer getting oral treatment.

"What we have done" in cutting back primary health care "is finally being seen," she said.