Utah legislators were well on their way Friday afternoon to wrapping up a special session that trimmed $272 million from current state spending and plugged an $82 million cash hole left over from last fiscal year.

GOP Gov. Jon Huntsman Jr. and Republican legislative leaders called the effort frustrating, but responsible. The session would help them address the declining tax revenues now, instead of January, when the problems could have been worse.

Huntsman also said that it was done cooperatively, even though he probably could have shored up the budget without the Legislature until the 2009 general session. "It was an all-hands-on-deck effort," the governor said of the special session he called to deal with the shortfall. "It could have been a unilateral exercise on the part of the executive branch where we could have gone out and made these changes without involving the Legislature."

House Democrats said more could have been done "to not harm people." But their leaders were happy with some changes made Friday to the budget cuts.

"We are better off" with the final budget decisions "than we were yesterday," said House Minority Leader Brad King, D-Price.

House Speaker Greg Curtis, R-Sandy, said Utahns were well-served by lawmakers' actions. Cutting budgets is "always unpleasant," but the balanced budget is "fiscally responsible" in a time when the economy may get worse and necessitate additional cuts next year.

At the insistence of Huntsman and some lawmakers, more money Friday was put into state corrections, public safety and the courts — perhaps avoiding some layoffs and helping some critical programs there.

Still, Phil Riesen, D-Holladay, House minority caucus manager, said: "We should have bonded more for roads" and used ongoing tax revenues freed up in transportation for Human Service and other programs. Riesen was one of 15 House Democrats who voted against the main budget bill.

"Less worry about concrete, more care about people," said Riesen.

But legislative GOP leaders said lawmakers had done a good job overall, balancing various state needs with dwindling tax revenues.

Leaders said that not only did they come into a special session to fix the budget problems now, before they got worse, they also did not borrow any more money to balance budgets. Instead, they were being fiscally responsible and cutting budgets.

Curtis said that bonding for roads, as some wanted, was avoided "because it is basically borrowing" to pay for ongoing programs.

Major programs were not greatly harmed, a number of cash pots were pulled away from state departments that weren't being spent, and public education was not harmed at all.

While overall about 3 percent was cut from state budgets, more cuts may well be coming in the 2009 Legislature, which convenes in January.

Hoping to at least get through until the 2009 general session, legislators actually cut $400,000 more than needed to balance the budget now — with warnings that the American economy may actually get worse over the next few months, harming state tax revenues even more before this fiscal year ends next June 30.

Public education was not cut in this special session. But unless tax revenues rebound, cuts next year of 4 percent and more could be coming, some leaders warned.

Huntsman was slightly more optimistic, saying that while it would be a "minor miracle" for the state to actually see revenue growth, "we might be able to pull it off."

Senate GOP leaders also said there may not need to be more cuts next year, thanks to their actions in the special session.

"There could be future bad news, so we decided to do the prudent thing," Senate President John Valentine, R-Orem, said. "We're hopeful we've left enough funds on the table for the next budget year," which begins July 1, 2009.

But Senate Minority Whip Gene Davis, D-Salt Lake, sounded less convinced. "I don't want to say I'm pessimistic," Davis said. "Budgets don't turn around overnight."

Utah's colleges and universities regained some money Friday, "but I'm told there will still be layoffs this year" of some higher education employees, said Rep. Kory Holdaway, R-Taylorsville, House chairman of Higher Education Appropriations Subcommittee. He was also "struggling" with public education not being asked to share in the pain, and even was being allowed to pursue new programs.

"I'm wondering if there is a way to not necessarily pull that money off but to at least send a message to public education ... that the economy isn't really that hot right now so maybe you ought to hold onto some of that money," he said during the House caucus.

Leaders said they hoped that general state government can get through this year without laying off any state workers. Next fiscal year is another story, however.

Admitting it was more of a symbolic gesture than a significant money-saving measure, legislators also voted not to take what would be a $10-a-day automatic pay raise for themselves starting next year. And the Legislature's own budget was cut by 3 percent, like other state nonpublic education budgets were.

Some of the Friday budget decisions included:

• Some unused cash sitting as "nonlapsing non-lapsing funds" in a number of colleges and universities were left alone. That was because some of those institutions "have already spent them," said House Budget Chairman Ron Bigelow, R-West Valley.

GOP budget leaders actually changed the way they "swept" various cash-holding accounts specifically because they feared that some colleges and universities — seeing more budget cuts coming in January — would spend down their cash accounts before lawmakers could take the one-time monies next year. Lawmakers took those monies now.

• Rep. Becky Lockhart, R-Provo, explained to House members the difficulty that lawmakers face in funding billions of dollars in new road projects.

While no new road bonding was approved in the special session — something a few Democrats decried (Huntsman also suggested more road bonding) — Utah continues to pour "around $200 million a year in sales tax into roads."

That is needed, said Lockhart, because no longer does the financially-troubled financially troubled federal government provide needed road money to states. Utah taxpayers are putting up 85 percent of the road money, she said. "But about 16 percent of the General Fund" spending has something to do with vehicles — like the Utah Highway Patrol — and so that is not necessarily a bad thing.

• Even with the budget cuts adopted Friday, Utahns should understand just how much new money has gone into public and higher education, Hhuman Sservices, Ccorrections and other critical programs over the past last few years.

For example, before Friday's 3 percent — $272 million — budget cuts, state government has grown by 39.7 percent from fiscal 2005 to fiscal 2009. With those budget cuts, government has grown by 37.9 percent, said Bigelow. And legislators have also cut taxes every year over that time, as well.

Despite that growth, Rep. Greg Hughes, R-Draper, said that the Legislature is still often portrayed as the villains when it in comes to education funding. So cutting education funding just as the new school year is starting "would be like picking up a stick to tweak yourself."

• Huntsman and some other legislators were able to turn back the GOP leaders' original plan of repealing an $18 million tax cut for Utahns who buy their own health insurance. That tax cut will still take effect Jan. 1.

Huntsman said that he was willing to compromise on his initial proposal to bond for some projects in exchange for preserving the tax break. It is an important part of his health system reform effort.


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