WinterSports2002.com, Wednesday, March 20, 2002

Utah revenues drop, but a Games boost is possible

By Bob Bernick Jr.
Deseret News political editor

State revenues are still dropping, but it's not time to panic yet, officials say.

A new Tax Commission report on tax revenues shows that up through January, and after adjusted for a $256 million projected shortfall, the state is still $29.3 million short in its main two funds — the Uniform School Fund and the General Fund.

But, says Tax Commission chief economist Doug Macdonald, the revenue update does not include sales tax revenue during the Olympics. And that could well give tax collections a boost.

The report is not a revenue projection. Rather, it is an actual count of tax receipts from July 2001 through January 2002.

In mid-February, lawmakers adopted revenue estimates that showed the state running a $256 million shortfall in the two main funds. Legislators cut budgets for the second time in the general session to deal with part of that shortfall, resulting in perhaps 200 layoffs of state employees. They also factored in the lower revenue estimates into the 2002-2003 budget, which they later adopted.

Many factors make the current $30 million shortfall iffy, officials said Tuesday.

Historically, the monthly revenue accounts (called TC23 reports) fluctuate in April and May as hundreds of thousands of Utahns file their state income tax returns. Sometimes, during the year, people overpay their withholding and so get money back. Sometimes they don't take enough out each month and have to pay the state.

In years gone by, the TC23s sometimes would show growing deficits only to have those negative numbers wiped out as income tax receipts are balanced out in the late spring months.

Finally, even though legislators tapped the state's Rainy Day Fund for around $45 million last month to "balance out" the current year's budget, the fund still has around $80 million in it and could be used again to make up any revenue shortfalls at the end of the fiscal year in June.

E-MAIL: bbjr@desnews.com

© 2002 Deseret News Publishing Company