Utah budget still $54 million short

Utah's economy is not rebounding, and legislators will have to find another $54 million to balance out this year's budget when they come back into session Monday.

New revenue projections for the current year were officially released this week. And as expected earlier, they are not good. Legislative budgeters estimate the current year budget shortfall will be $256 million, up from the previous estimate of $202 million, when state books close June 30.

House and Senate GOP leaders met Tuesday morning, but have not decided how to balance the budget. "We're still talking," said House Majority Leader Kevin Garn, R-Layton, after the meeting. House leaders prefer cutting most of the $54 million from budgets.

"But I think we're at a point where we're going to have" to use some of the state's $120-million Rainy Day Fund to make up the difference, Garn said.

That's what GOP Gov. Mike Leavitt wants — tap the fund and not make more deep cuts into programs.

Last week, Leavitt told the Deseret News that he had "no confidence" in the $202 million estimated shortfall holding up in light of softening corporate revenues and other tax revenue downturns.

Several weeks ago, Senate Majority Leader Steve Poulton, R-Holladay, told the newspaper the revenues could fall by another $50 million by the mid-February estimates. Both turned out to be right.

The House and Senate GOP caucuses voted before the session started in January not to touch the rainy day fund. But three weeks ago the caucuses reversed themselves and voted to spend some savings.

A legal glitch developed, however. Legislative attorneys said the Legislature would have to declare an official emergency to draw from the fund. But an emergency was narrowly defined, making it difficult to take monies out now. So Republicans bypassed the rainy day fund and took part of the surplus left over from the I-15 reconstruction to balance out this year's budget.

But now the budget is another $54 million in the red, and options are dwindling.

Leavitt says he wants to "seriously revisit" the idea of spending money out of the savings account.

Garn said using one-time surpluses to balance out this year's spending "just causes problems in the next year's budget when we have to match revenues and spending." Ongoing monies for programs shored up with one-time funds may not be there, he explained.