-Lawmakers will have to find some way to pay for a $16 million increase in state employee health benefits next year.

The state is self-insured, with the health insurance program administered by the State Retirement Office. Health care cost increases have caught up with the fund, and House and Senate members were told Thursday that a 45 percent increase in the premium is needed next year."I doubt we'd spend $16 million more for much of the same thing," said Sen. K.S. Cornaby, R-Salt Lake, co-chairman of the Retirement Subcommittee.

He suggests that lawmakers look at a number of different options, including changing the current 90/10 split on premium payment, with the state paying 90 percent and the employee paying 10 percent, to the employee paying a greater share of the premium; higher deductibles; or moving the whole state program to private industry, like contracting with FHP or Blue Cross/Blue Shield.

-Benefits for higher education employees is also an issue. Scott Gilmore of the State Budget Office told legislators that the governor's budget recommends funding only one-half of the increased costs in benefits, mainly for health and dental insurance. The expectation is that the institutions will fully fund benefits using money from lower priorities, he said.

The legislative analyst recommends a higher education budget of $365.8 million, a figure similar to the governor's recommended $365.9 million, but he supports fully funded benefits. His budget makes up the benefits difference by using lower projected costs for fuel, power and liability insurance.

Higher Education Commissioner Wm. Rolfe Kerr pushed the regents' recommended $377.2 million budget that includes a 4.5 percent pay raise for faculty and staff and full funding to cover cost increases in benefits.