The state of Utah could be ending its fiscal year in two weeks with a $70 million surplus or $100 million in the red.
We'll get back to you in August on the exact number.
That's what legislative leaders were quietly told this week.
After the Utah Tax Commission decided to no longer reflect estimated tax revenue surplus or shortfalls as part of its monthly TC23 report on tax collections, the Legislature and Gov. Jon Huntsman Jr.'s budget office decided to put out "rough" estimates of how the state was doing tax-collection-wise and spendingwise in the early summer and late fall.
The idea was that a group of state economists would examine tax collections and give legislators a broad range in how the state was doing in cash flow in, versus spending out. Kind of a nice thing to know if you are running a business or a government.
June 30 is the end of the fiscal year. So, usually, legislative leaders get some kind of budget/spending report in their June interim study committee meetings. And the Executive Appropriations Committee, made up of leaders of both political parties from both houses, on Tuesday was given a letter detailing the latest revenue updates. But the letter was not discussed in that committee and was not on the agenda.
Instead, Sen. Lyle Hillyard, R-Logan, wrote a summary about the broad estimates on the Senate Republicans' blog site. It is not an official state site, but the Senate Republicans' "unofficial" partisan site, as the site itself defines itself.
Citizens can read about whether the state is in the black $70 million or in the red by $100 million on Hillyard's blog at www.senatesite.com/blog/.
Senate President John Valentine, R-Orem, said it is not really important how such information is released in an open legislative meeting or on an official state Web site but rather that it was made public, in this case through a blog on the Senate Republicans' site.
Valentine said there is nothing suspicious going on and no one really thought to mention the letter during the Executive Appropriations Committee meeting. And it was nice that Hillyard decided to blog about it and make it public, he added.
But House Minority Leader Brad King, D-Price who got the letter in a pre-committee briefing by the Legislature's budget staff said, "I much prefer that this information be released in a more official way, on an official state site or meeting in a less partisan manner."
He said he wants Utahns to get important state financial information quickly. "It is important for citizens to know this as it is important for legislators to know it." King added, as other legislators did Wednesday, that the possible $100 million revenue shortfall is nothing to worry much about now. "Although with such a broad range $70 million in the black to $100 million in the red it's hard to know what to think now."
The budget numbers were discussed in a closed Senate GOP caucus Wednesday. The numbers were not discussed during the open part of a House GOP caucus Wednesday. (The House GOP caucus was closed at one point to talk about members' re-election campaigns this year.)
Speaking after the closed GOP Senate caucus, Valentine said he's not worried about the budget yet. "What I would worry about is if we started getting outside of the range" of tax collection revenue estimates. Hillyard said cuts in the 2008-09 budget "are not a probability just a possibility."
Andrea Wilko is chief economist for the Legislature's fiscal analyst office and helps put together the state's revenue estimates and spending. Wilko said a more exact financial report will be given to legislators in August with a better idea then if the state ended this fiscal year in the black or the red. By law, Utah must have a balanced state budget.
But in any case, legislators and citizens shouldn't worry, she said. Even if the state is in the red by $100 million for fiscal 2007-08, the Legislature "carried over" $270 million in cash from this year to the next fiscal year. "So (the state) is just fine," she said.
In addition, the state has two so-called "rainy day" funds that contain several hundred million dollars each, which can be tapped in case there is an unexpected downturn in state tax collections.
The June TC23 report, while not estimating any tax surpluses or shortfalls, does say state revenues in the two main tax funds the General Fund and the Education Fund are running 0.8 percent below estimates.
Sales taxes are down 4.1 percent from last year's take, or about $69 million. The corporate income tax take is down 5.1 percent from last year, or $100 million.
Some other state tax collections are up. The personal income tax take, for example, is up 1.7 percent, or $41 million. Valentine said the TC23 report was made public prior to the Executive Appropriations Committee. "And that is really the official state (Tax Commission) document."
In his blog, Hillyard, the Senate's budget chairman, said Utah "still enjoys one of the hottest economies on the planet." However, recent tax collections are not what budgeters hoped for.
Utah state government has routinely seen huge budget surpluses in recent years. The GOP-dominated Legislature has been cautious in spending, legislative leaders say. And the result is that even though there has been a downturn in many other states' economies, and Utah's has not grown as fast as in recent years, Utah state government is still in good shape.
"Some of us old-timers have been through an economic cycle or two, and you probably remember us worrying about it during (this last legislative) session," wrote Hillyard.
"We'll be just fine for fiscal year 2008," which ends June 30, Hillyard said. If it turns out that tax revenues continue to slide, lawmakers can address any shortfalls in the 2008-09 budget when they meet next January, he added.Wilko said many Utah businesses chose to pay much of their income tax in June. And since those monies haven't been counted yet, it is possible the state could still end the fiscal year in the black.
Contributing: Lisa Riley Roche