Gov. Norm Bangerter suggests a $3.5 billion budget for the state next fiscal year, which starts in July 1991 - a spending increase of $153 million over the current state budget that contains no tax increases and no tax decreases.
The budget is tight, the governor said Friday morning in releasing his 1991-92 spending recommendations to the Legislature, which meets Jan. 14 in general session."(The budget) doesn't keep up with inflation, growth or federal (government) mandates," he said. Still, considering the financial crisis many states find themselves in, Utah is doing all right, he added. "No one got what they wanted. Remember there was $400 million in requests and we only have a little over $100 million in new money."
Bangerter called it a no-growth budget that still meets the critical needs of the state.
Bangerter suggests few new programs. However, as part of $101 million in "new" money for public education, the governor suggests a six-year class-size reduction plan, with $4 million going next year to reduce the size of the average first-grade class by three students, from 25 to 22.
His recommended budget gives little wiggle-room for legislators, who must adopt a balanced budget before they adjourn at the end of February. With little extra money to play with, Bangerter and GOP legislative leaders expect general dissatisfaction from many special-interest groups who aren't getting what they want. (See reaction story, Page A2). Still, Bangerter thinks what little money there is is spread around fairly.
While there's no general tax increase, the governor is requesting an increase in drivers' licenses fees from $10 to $15, to pay for increased drivers' licenses services, and reiterated his request to create a Department of Environmental Quality.
State employees and public education teachers should get 5 percent compensation raises - 3 percent cash and a 2 percent increase going toward benefits such as health care and to take care of an estimated $18 million shortfall in retirement funds, the governor says. Overall, state spending should increase by a scant 4.5 percent next year.
The state does have some healthy surpluses - $49 million from fiscal 1990 and an estimated $51 million for the current year. In addition to that $100 million, there's $52 million sitting in the so-called "rainy day" fund - a surplus account that Bangerter suggests be allowed to double as time passes.
But those are one-time funds, and can't responsibly be put into ongoing programs such as education or salaries, the governor said. He wants to spend $100 million of that $150 million surplus on one-time items - programs that need extra cash this year only or capital expenditures such as buildings or materials.
A part of that $100 million is $16.8 million for the West Valley Highway and $15 million for the Salt Palace remodeling.
There's only $119 million estimated in new revenue growth for 1991-92, Bangerter says. It's better than no revenue growth at all, but not enough to keep up with inflation, although growth in public education and higher-education students is taken care of. That $119 million is just an educated guess. If a recession hits Utah quickly and severely, that estimate could dwindle, forcing Bangerter and lawmakers to look at the $52 million "rainy day" fund or midyear program cuts.
Bangerter's budget, his sixth as governor and 16th if you include his years in the Utah House, appears to have little or no room for tax decreases.
Over the past several years, Bangerter, a Republican, and the Republican-controlled House and Senate have granted more than $100 million in tax decreases - welcome relief following the 1987 legislative session where the governor and legislators imposed a $165 million tax hike on Utahns.
Just a month ago, voters rejected a ballot initiative eliminating the sales tax on food, a measure that would have cost the state an estimated $90 million.
Democrats, who supported the food tax removal, say they want some kind of food tax relief for poorer Utahns during the upcoming Legislature. Bangerter promised to consider it. But his budget contains no such tax reduction.
"When confronted with the needs of education, health, human services, courts, corrections and other departments, it does not appear that money is available to implement a reduction in the sales tax on food," he said.
Of the $119 million in new, ongoing revenues, Bangerter suggests that $63 million go for public education, elementary, junior and high schools; $26 million for colleges and universities; $26 million for health and human services and $10 million for corrections.
That's tens of millions of dollars less than the agencies requested earlier this year.
Bangerter says the federal government is once again forcing the state to pay for programs but not providing the money. He said even though his 1991-92 budget has $70 million in "new" money - state and federal - for health and human service programs, federal mandates, especially in Medicaid, far exceed the state's ability to pay. Thus, some health and human service programs must actually be cut to pay for the federally mandated programs, the governor said. However, the governor does suggest $3 million for "uninsurables," those unfortunate Utahns who can't afford or get health and other vital insurances.
Bangerter, as he has the past several years, suggests a "moderate" bonding program for state construction projects. For 1991-92, he suggests a $55 million bond for building construction, and also wants a $20 million bond for highways and a $5 million bond for water projects. His budget includes $68 million for debt service.
Slicing up the state dollar
Governor's recommended state budget for fiscal year 1991-92.
Where the money will come from:
Dedicated credits 7.9%
Transportation fund 5.8%
Federal funds 21.0%
Restricted & Trust funds 3.6%
Mineral leases 1.1%
Uniform School fund 25.1%
Property taxes 7.5%
General funds 25.2%
The majority of the general fund consists of sales and use taxes. Income taxes make up most of the uniform school fund.
Where it will go:
Health/Human Services 12.8%
Capital and Debt 3.7%
Courts and corrections 8.0%
Public education 49.2%
Higher education 18.1%
Graphic: Governor's budget summary
Authorized FY 1991 Recommended FY 1992
Business, labor and 67,571,700 71,020,500
Community & economic 58,047,200 47,094,600
Corrections 94,937,800 98,836,300
Courts 45,923,200 48,342,300
Elected officials 27,585,400 25,946,300
General government 70,367,100 72,855,400
Health 403,922,800 444,961,500
Higher education 399,265,800 434,333,000
Human services 326,308,500 351,288,900
Legislature 7,848,000 8,087,100
National guard 3,866,500 4,113,400
Natural resources 66,235,900 65,298,600
Public education 1,190,225,200 1,267,549,500
Public safety 43,136,500 46,925,000
Transportation 152,281,600 151,722,000
Operation Budget 2,957,523,200 3,138,374,400
Capital budget 351,267,000 323,561,600
Debt service 64,163,900 68,484,800
Other 4,000,000 0
TOTAL 3,376,954,100 3,530,420,800