SALT LAKE CITY — With an eye toward Utah's future, Gov. Gary Herbert proposed a $14.8 billion state budget Wednesday that would infuse education, water resources and air quality with new money.
The governor's plan, unveiled at the Salt Lake Community College South City Campus, calls for $422 million for public and higher education, including funds for an expected 9,700 new schoolchildren next year and to ease rising college tuition.
Herbert is proposing a 4.75 percent — or $130 million — increase in per-student spending in public schools, and letting local school boards decide whether to use it on teacher salaries, professional development, technology, early intervention for at-risk kids and other needs. That amounts to $206 more for every Utah student.
Education funding, the governor said, remains his top priority for helping maintain the state's strong job creation and low unemployment.
"I'm wise enough to understand that if we're going to continue to have sustained economic growth, we've got to have a labor force that, in fact, has the skills the marketplace wants and demands," Herbert said.
The state has $561 million in new revenue for the budget year beginning July 1, 2016. About 70 percent of that money would go to public schools and colleges under the governor's plan, putting total education funding at $4.4 billion.
"It's a good start. It's not enough," Herbert said, adding he intends to budget another $1 billion in public education and $275 million in higher education over the next five years.
The governor expects some pushback on his efforts to give local school districts more control over per-student spending. The Legislature is less keen on letting school districts make some of those decisions, preferring to specify where the money goes.
"We have some that want to dictate, mandate line items and say this is what the school district should do, how much they should spend and where it should go to," Herbert told the combined Deseret News and KSL editorial boards.
State Superintendent Brad Smith said he expects that will be worked out during the 45-day legislative session that starts Jan. 25.
"It's regrettable that it would be poised as an either-or option," he said. "Our mission is to do what's best for kids."
Some decisions can only be made at the state level, while school districts and charter schools deliver educational services, Smith said.
"In any given year, getting that balance right is very much walking a tightrope," he said.
While schools could see a lot of new money, other areas in state government not so much. Utah had a $39 million shortfall in projected sales tax revenue this year, meaning there will be less general fund money to spend on things other than education.
"We know that general fund is scarce, and we have to make sure we're really managing that very tightly," said Kristen Cox, the governor's budget director.
The proposal Herbert will submit to Utah lawmakers has no tax cuts or tax increases. It also would not add to the state's debt.
The governor said he's very concerned about the drop in sales tax revenue and lamented Utah losing $180 million due to unpaid sales tax on Internet shopping. If the state had that money, it could consider a tax cut, he said.
Higher education would get $140 million under the governor's plan, half of which would go to building a performing arts building at Utah Valley University and a career and technology center at Salt Lake Community College. He set aside more money for scholarship programs.
Herbert also wants to give higher education employees a 2.75 percent pay raise and state workers a 2 percent bump.
David Buhler, commissioner of higher education, said the governor's budget largely matches the state board of regents' recommendations. He said it shows a "tremendous committment" toward education.
Buhler said there would likely be a small tuition increase next year, but the $9 million Herbert budgeted would help offset that, depending on what the Legislature decides to do. He also praised a new needs-based scholarship program the governor proposed to help students who are close to graduation.
The governor's office anticipates water to be a big issue when the Legislature meets in its general session.
Cox said water is the biggest limiting factor to growth in the state. Utah also has the highest per capita municipal and industrial water use in the country, according to the U.S. Geological Survey.
Herbert is proposing to spend $6.5 million to collect data and study water use throughout the state, with an eye toward the state getting more involved in funding water projects such as the Lake Powell pipeline. The state doesn't own any water delivery systems, leaving that to local governments.
"It is a fundamental shift in policy for the state to take this kind of role in water," Cox said.
Air quality also is a factor for businesses considering Utah and a perennial legislative issue.
The governor's budget plan includes $6.2 million for a new technical support center to monitor air quality and $250,000 for research. Another $500,000 would go to the state's rebate program for homes and businesses that replace pollution-emitting equipment and wood-burning stoves.
House Minority Assistant Whip Joel Briscoe, D-Salt Lake City, said Democrats hope the governor’s budget plan has enough “wiggle room” to promote health care and advance education.
“We appreciate that the governor’s budget begins a commitment to building a sustainable future for Utah, including funding for water conservation and air quality improvements," Briscoe said. "But we cannot have a sustainable future when we neglect our human resources by refusing to provide access to health care or a fully funded education system that can provide room for innovation and growth."
Herbert does address Medicaid in his proposal, but not to the level of his own Healthy Utah plan that the House Republican majority soundly rejected.
The governor proposed $10 million for the so-called coverage gap, those earning below 100 percent of the federal poverty level who otherwise won't qualify for federal health care subsidies. About 62,000 Utahns fall into that category.
"I'm looking to see what (lawmakers) come up with in their own regard to that," Herbert said, adding there is money, including in the state's $528 million rainy day fund, to increase that amount.
"I expect there are probably ways to move that around and come up with the necessary monies to hopefully take care of the gap," the governor said. "The issue isn't going to go away."
Herbert's budget also includes $360,000 to hire two specially trained state agents to do background checks on refugees coming to Utah. He called it an "extra layer of review" of the federal screening process.
"I do believe that if the federal government knows who's in our borders, we ought to know who's in our borders," the governor said.
Other highlights in Herbert's budget plan include:
• $48 million for the first phase to relocate the state prison.
• $9.5 million for teacher supplies.
• $6 million for a new Salt Lake-area homeless shelter.
• $2.4 million to increase state trooper pay.
• $1 million for more state Capitol security.
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