Like many other Americans, Utahns are driving less and buying less gasoline.

And the state's transportation fund was in the red by $10 million last fiscal year because of it. Legislative leaders worry that that trend could continue and be made worse by fewer federal road dollars coming to the state.

A new revenue update for the state's budget year that ended June 30 begins with the main problem: "Economic growth in Utah is slowing."

"The transportation fund has been especially hard hit by the economic slowdown," the report said.

As reported before, the general fund and the education fund failed to bring in the tax revenues estimated by lawmakers last February. Originally, state economists guessed those main budget funds could be off by as much as $100 million.

Tuesday, the updated estimates put it between $55 million and $85 million.

Legislative leaders were worried about that possibility, and they put tens of millions of dollars aside in various savings funds to make up any shortfall — wise planning, GOP legislative leaders told the Deseret News editorial board Monday.

But the real hurt comes in the transportation fund, which could have been $35.18 million higher over the past three years but for a variety of factors — including increased oil use by China and worldwide oil-price speculation — which have led to huge jumps in the price of gasoline.

Utah, like the federal government and many other states, levies a per-gallon gasoline tax. Fewer miles traveled equals less gasoline sold equals less money coming in through the gas tax.

The road-tax revenue is not good news as the state prepares to begin a multibillion-dollar, multi-year reconstruction/expansion of I-15 in Utah County.

GOP legislative leaders fear that the current economic downturn could continue well into this fiscal year, which started July 1.

In the early 2000s, legislators had to deal with a $700 million shortfall over several years.

Updates on the current state budget will come in the fall. But signs are troubling, said Andrea Wilko, chief legislative economist.

While Utah's economy is still growing, it may well grow less than expected. And while wages should remain stable overall, because of inflation there will be a real wage loss of 1 percent.

But leaders say they planned for that during the January-February general session, putting some money aside. The state's two Rainy Day funds have a combined balance over $400 million.

In addition, they've sent a letter to state agencies telling managers to be prepared to cut their budgets by specific percentages should tax revenue continue to fall short of projections.


E-mail: bbjr@desnews.com