Utah state government is more than $100 million in the red for the fiscal year that ended June 30.
Don't worry. Gov. Jon Huntsman Jr. and legislators won't be looking to raise your taxes any time soon although a state gasoline tax hike may be coming next year or in 2010 to generate bond revenue for rebuilding I-80 in Salt Lake County and I-15 in Utah County.
The state still has plenty of money set aside to cover the shortfalls from last fiscal year. Huntsman and GOP lawmakers have prided themselves in conservative budgeting the past several years, leading to hundreds of millions of dollars in tax surpluses.
Still, for GOP officeholders running for re-election this year, having that much red ink is embarrassing as they try to sell voters on their administration of state government.
Democratic gubernatorial candidate Bob Springmeyer said the $92 million in red ink "is a big number. It shows the Huntsman flat tax is a fraud."
And these new revenue numbers, where the personal income-tax collections are under estimates, show that "this kind of tax cut for the wealthy can't be sustained you can't adequately fund public education" with the new personal income-tax system, Springmeyer added.
The State Tax Commission's year-end report shows that in the tax sources that feed the state's General Fund and Education Fund, revenues are $91.79 million under estimates. (The state's budgeting process is complicated, but in general, lawmakers and Huntsman have to adopt a budget that balances with revenues.)
The state's Transportation Fund is $20.34 million short in revenue collections, the new report shows.
"We'll get through this next year, and we'll be fine," Huntsman said. He and lawmakers budgeted wisely last general session, he added. "We had a high end and a low end, and this is closer to the low end of our expectations."
The governor said Utah is dealing with a difficult economy. "We're up against a tough environment. While our state is doing better than most every state in America, we're still finding the environment to be a very tough one. So are families everywhere," he said.
A national legislative group this week released its annual budget study that shows many states are in fiscal trouble, with some having employee layoffs, hiring freezes and face billions of dollars (in total) in red ink.
The percentages of revenue shortfalls in Utah are not large, but the cash is. The general and education funds are off by 1.6 percent from revenue estimates; the transportation collections are off by 0.2 percent. The state's overall budget for 2007-08 was more than $11 billion, but that includes federal funds and many special, earmarked taxes.
Republicans have held the governorship and control of the Legislature since 1984 (earlier for some offices). There were boom years in the 1990s, letting government grow considerably while still giving tax cuts. A downturn in the early 2000s was well-managed by the GOP bosses by holding some budgets as is, cutting a few others and spending down the state's Rainy Day Fund by more than $100 million, leaders avoided big tax hikes seen in other states.
Since then taxes have been cut several times including reducing the state's share of the sales tax on food, cutting and "reforming" the state income tax and giving some relief in property taxes.
Legislators and Huntsman, fearing earlier this year that a downturn was coming, decided to carry over $270 million in one-time revenue surpluses from fiscal year 2008 to fiscal year 2009 (the current budget year). Those funds can be used to plug any revenue shortfalls to balance out last year.
In addition, another $100 million in ongoing taxes was socked away, earmarked for public school student growth. That could be diverted if not all of it is needed for student growth. And the state (now with two Rainy Day Funds) has an extra $414 million locked up in special accounts which lawmakers can tap in an ongoing "economic emergency" like the early 2000s.
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