State government will have at least a $70 million surplus come July 1, GOP legislative leaders were told Thursday.
That's a considerable chunk of money that lawmakers will decide whether to spend or not by the end of the session.Gov. Norm Bangerter has estimated before that the state will have a $14 million surplus this fiscal year in the general fund.
The Legislature's fiscal analyst agrees. But he also adds in the rainy day fund, savings in the West Desert pumping project, oil and gas account surpluses and others to come up with the $70 million total.
From those surpluses, which won't necessarily occur next year -Bangerter wants to spend $33 million on needs this year. This is called supplemental spending, and GOP legislative leaders are concerned about the amount of that proposed spending.
"Traditionally, we've had less supplementals than that," said Senate Majority Leader Cary Peterson, R-Nephi.
The $70 million surplus could grow if tax revenue comes in higher than expected, officials said.
Last year the state had a $110 million surplus, more than $80 million of that in income tax revenues. That led to rebate checks and an income tax cut during the politically charged election year.
That likely won't happen this year. First of all, the $70 million is one-time money. To give a permanent tax cut with that cash, lawmakers would have to trim government spending next year accordingly.
Second, Bangerter already suggests a $19 million cut in some tax next year because he believes Utah's economy is rebounding. That tax cut will be dealt with separately.
But the $70 million surplus could put political pressure on lawmakers to cut taxes. And it could mean more pressure to reduce the sales tax on food - an item that is esti mated to cost between $80 million and $90 million.
"The governor believes it's prudent to sock some of this surplus away for future capital needs _ like water development and highways _ while spending some of it next year for those same critical needs," said Bud Scruggs, Bangerter's chief of staff.
Some of the $70 million is in restricted accounts, and can only be spent on specific items. But much of it is available for the Legislature to spend any way it sees fit.