SALT LAKE CITY — When the 2014 Legislature begins meeting Monday, lawmakers will face a pressure familiar to Utah families: trying to make sure there's enough money to keep up with expenses.
While revenues are up, there's increasing pressure to look at raising taxes for transportation and education. But legislative leaders say there's little chance tax hikes will be approved during the 45-day session.
This is an election year for most lawmakers, and other issues are expected to surface, particularly dealing with religious freedom and potential antidiscrimination legislation.
The Legislature will address other key issues, including the Wasatch Front's poor air quality, the state's liquor laws, early education, college readiness and intergenerational poverty, each an issue of importance for Utah's families.
Gov. Gary Herbert, whose $13.3 billion budget does not contain any tax increases, expressed frustration over the lack of urgency to deal with transportation funding this session.
"I understand politics, and usually gasoline taxes have historically been done in an off-election year. But we need to have the discussion as far as how we're going to pay for the billions of dollars of needs in infrastructure and roads going forward," Herbert said.
Even the governor acknowledged that it may take time to come up with either a way of tying the first increase in the 24.5-cent gas tax since 1997 to inflation or an alternative fee for drivers.
"I think between now and the next session, there will probably be a serious attempt to modify the gas tax or find a funding mechanism," Herbert said. "I'm anxious to hear any and all proposals."
House Speaker Becky Lockhart, R-Provo, said there could be some action this session on how the gas tax is distributed among government entities, but any change would have to be revenue-neutral.
"It's really difficult to see any increase implemented," Lockhart said. The speaker said she expects most of the discussion about transportation funding to take place during the legislative interim session.
Senate President Wayne Niederhauser, R-Sandy, said he doesn't expect any proposal to increase the gas tax to even come up for a vote, let alone pass this session.
"It can wait a year. It's just every year you decide not to do it, the harder it gets. The cure becomes more extreme and more difficult," Niederhauser said, as revenues decline because more vehicles on the road use less or even no gas.
But the Senate leader acknowledged it's a tough decision for lawmakers seeking re-election this year. "I don't think anybody wants to be pegged with increasing revenues," he said.
Money for schools?
Democrats are going to try again this session to bring in more income tax dollars for schools. Senate Minority Assistant Whip Pat Jones, D-Holladay, is looking at limiting income tax exemptions for individuals and their dependents.
"Utah voters support tax increases to pay for education," House Minority Whip Tim Cosgrove, D-Murray, said.
Only 15 percent of Utah voters polled recently for Weber State University and the Exoro Group said they would not be willing to give up an income tax exemption to increase school funding.
Niederhauser said any attempt to collect more income taxes faces an uphill battle. He said that's the reason Jones is looking at reducing exemptions rather than simply raising tax rates, "which would be dead on arrival."
His solution for finding more money for schools is raising the gas tax to free some of the general fund revenues now being steered into road maintenance and construction.
"If we want to be competitive economically, we can't be out raising the income tax," the Senate president said. "If we solve the general fund problem, we can get quite a bit more for education."
Herbert and lawmakers have agreed the state should expect $338 million more in revenues in the budget year that begins July 1, including $132 million left over from the current budget year.
But there's already a long list of needs next session, including $64 million for the 10,300 new public school students anticipated next year, a proposed addition to the state prison at Gunnison, and addressing air quality.
Add in boosts in spending to maintain ongoing efforts such as the governor's goal of ensuring 66 percent of Utah's adults having advanced degrees by 2020, and much of the new money is gone.
"This is the new normal unfortunately," the House speaker said. "It feels like we're coasting."
The forecasted 3.8 percent increase in revenue over the next budget year may be positive, but economic growth is being hampered by the federal government's regulatory policies, Lockhart said.
She said state lawmakers may have no control over what Washington does, but they can avoid raising taxes to bring in more cash by trying "to find new and more innovative ways to leverage the revenue we do have."
That includes relying more on technology in the classroom, the speaker said. House Republicans are "looking very seriously" at legislation to ready educators to shift away from paper and textbooks, she said.
Lawmakers also have to tackle mounting expenses from the House's special investigation into former Attorney General John Swallow that could reach as much as $4 million or more.
There's also the costs of defending Amendment 3 to the state constitution after a federal judge struck down the amendment in December, and mounting a defense against a new lawsuit over recognition of same-sex couples who married before a stay in the case was issued.
None of those items were anticipated when lawmakers put together the state's current budget a year ago, but legislative leaders said they have no choice but to find the money.
"Afford it or not, we've got the bill," the Senate president said of the Swallow investigation costs. The House committee is expected to wrap up its work during the session.
Niederhauser was more enthusiastic about picking up the tab for defending the state's voter-approved constitutional definition of marriage as between a man and a woman, struck down last month by a federal judge.
While new Attorney General Sean Reyes had told lawmakers it could cost as much as $2 million for outside counsel to take the case to the U.S. Supreme Court, he announced recently the attorneys involved agreed to cap their fees.
"The Senate is very supportive of us defending our jurisdiction over marriage, so we feel like this is our duty to see this through," Niederhauser said. "The people have spoken. It's in our constitution."
The House speaker said the Swallow investigation price tag was not out of line with the House's expectations, and she praised the attorney general for keeping the costs down in the Amendment 3 case.
Lockhart said the state's appeal of the case may mean legislation won't go forward on related issues including the preservation of religious freedom and a statewide ban on housing and employment discrimination against the lesbian, gay, bisexual and transgender community.
"We're still evaluating what the best course of action is. And the best course of action may be to do nothing. And I'm OK with that," the speaker said. "The answer may be stand down. Let's let this run its course in the courts."
There will be a plan to expand Medicaid coverage this session, the governor said. He announced last week he had ruled out "doing nothing" about the extension available under the Affordable Care Act, but he wasn't ready to provide details.
While the federal government will pick up the initial costs of the expansion, Lockhart has called for the state to start setting aside now whatever funds would be needed in the future.
Herbert said such a fund is a possibility, but there are many ways to handle the expansion.
"In the next 45 days, we'll have a decision," the governor said. "We just want to make sure we're not doing something that will come back and bite us in the behind."
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