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New Utah revenue numbers 'disappointing'

Published: Tuesday, July 28 2015 9:04 p.m. MDT

The Utah State Capitol on the opening day of the Utah State Legislature Monday, Jan. 23, 2012. (Scott G Winterton, Deseret News) The Utah State Capitol on the opening day of the Utah State Legislature Monday, Jan. 23, 2012. (Scott G Winterton, Deseret News)

SALT LAKE CITY — New projections released Tuesday giving lawmakers another $14 million to spend this session fell short of some expectations.

"Disappointing," was how Senate Majority Leader Scott Jenkins, R-Plain City, summed up the additional $9 million in ongoing revenues and $5 million in one-time monies available to the 2012 Legislature.

"It's so little you can't see it," Jenkins said. "We had hoped for a little bit extra in the hopper so we had some dough to work with."

The state was already expecting $280 million in revenue growth in the new budget year that begins July 1, and a $128 million surplus in the current budget year, based on estimates made last fall.

While no one is complaining about having even more cash, there is concern it isn't enough to cover some items lawmakers hoped to fund, a shortfall Jenkins said adds up to some $50 million.

"That's a big number," Jenkins said. "This is an issue. I'm not really sure what we're going to do."

Caught in the shortfall is a 1 percent pay raise for higher education employees, Jenkins said, but not similar salary hikes for state workers and public school teachers recommended in Gov. Gary Herbert's nearly $13 billion budget.

Even so, lobbyists for government employees sounded worried.

"I'm a little nervous that they're going to have less enthusiasm," said Kory Holdaway, government relations director for the Utah Education Association.

Holdaway said the association is focused on securing the money needed to cover enrollment growth in public schools as well as a pay increase for teachers and other employees.

"We're still hopeful the Legislature will continue to prioritize education as they said they planned to, recognizing that there may not be as much funding available," he said.

Dave Buhler, associate commissioner for the Utah System of Higher Education, tried to sound upbeat.

The new revenue numbers are "not like the biggest we've ever seen, but they are positive," Buhler said. Higher education saw budget cuts that added up to 14 percent over the past two years.

"We've taken some hits, but the state's been through some pretty tough times. We understand that," he said, adding he hopes that "gives us some priority."

During an Executive Appropriations Committee meeting Tuesday night, Senate Minority Leader Ross Romero, D-Salt Lake, said the higher education budget subcommittee put giving a pay increase at the the top of their list.

"We all recognize the value they've been bringing and the extra burden they've been asked to bear," Romero said.

The Executive Appropriations Committee accepted the new revenue numbers without debate and is expected to make recommendations on budget priorities on Wednesday.

The governor, who is emphasizing the strength of the state's economy in his reelection campaign, said in a statement that the new numbers simply show the earlier forecast was sound.

"Utah's economy is still growing, and while we clearly still have work to do and jobs to grow, our forecasts are holding and this state continues to lead the nation out of the Great Recession," Herbert said.

House Speaker Becky Lockhart, R-Provo, was also positive about the new numbers.

"It's good news they're not less," Lockhart said. "That means we're beginning to see growth in the economy, steady but slow. So I think people should feel confident about that."

She said she was not concerned that the numbers suggest income tax revenues will fall short of last fall's projections, while sales tax collections are expected to be higher.

"I don't think it should surprise people there are minor ups and downs here and there in income and sales tax," she said. "I'm not disappointed."

Senate Budget Chairman Lyle Hillyard, R-Logan, acknowledged there's "been a lot of expectations” for a big boost in revenues.

"The bad news is, they haven’t increased very much," Hillyard said.

Senate President Michael Waddoups, R-Taylorsville, said he was pleased the state's tax revenue picture was steady, if not slightly improving.

"We're doing well comparatively but we're still impacted by the national economy," Waddoups said.

He said another $23 million available though a recently announced national mortgage lender settlement should go to bolster the state's Rainy Day fund.

The Legislature's GOP majority and the governor have agreed to cover the cost of growth in public education, about $36 million, and eliminate the $52 million so-called structural imbalance in the budget, created by using one-time money to pay for ongoing programs in lean years.

Add in the state's increased Medicaid costs and other programs expected to win funding approval and there may only be some $20 million left to be used towards tens of millions of dollars in budget subcommittee priorities.

Voices for Utah Children issued a statement urging lawmakers approach the new budget with caution.

Revenues still lag behind what the state took in during robust budget years, the advocacy group said, at the same time families need more help than ever dealing with the affects of a troubled economy.

At the same time, the Salt Lake Chamber said the new revenue estimates are a reason to be optimistic and suggested lawmakers "use these funds to further propel the state's ongoing and accelerating recovery."

Contributing: Marjorie Cortez

E-mail: lisa@desnews.com

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