State Senator Lyle Hillyard’s end-of-September assessment of Utah’s budget challenges includes both good and bad news. “The good news is that we ended the fiscal year, June 30, with basically an even, balanced budget,” he said. “That’s remarkable, with the way the economy has been fluctuating. We were down about $23 million but we identified about $30 million of funds that were set aside for use if they were needed. “The other good news is that, even though the economy seems to be slowing from our perspective, it’s not on the rapid decent it was last year that caused us to go to the governor and ask for a special session.” Hillyard said Governor Herbert started the new budget year asking every department to look at a five percent reduction. Now the bad news. “We put in about $450 million of federal stimulus money last year as backfill and that is one time money, so that will be gone,” he said. “In addition we’ve identified about $250 million of funding needs we’re going to have to do this year. For example, we anticipate about 13,000 to 14,000 new students in our public education system and that will cost about $100 million.” Hillyard said the state has a rainy day fund of $420 million plus another $100 million has been set aside as onetime money. “I’m sure part of that will be used,” he said, “I do not want to drain fully the rainy day fund but we will use a significant portion of it this year, I’m sure, to help minimize some of these reductions.” Hillyard said most of last year’s budget cuts were about 15 percent. Primarily at the direction of Governor Jon Huntsman, higher education took cuts of about nine percent while public education’s cut was in the range of five to six percent. “The problem we face is that as the economy continues to slide, and we don’t have the money to backfill like we did before, the cuts we made may just be implemented. “I am getting the sense from John Nixon, Governor Herbert’s chief budget officer, that the Governor will not be quite as protective of public ed as Governor Huntsman was.” Hillyard said public education amounts to half of the state budget and if no cuts are made there it doubles the cuts to everyone else, including higher ed. “It is a $12 billion budget but we’re going to be looking for every $100,000 we can find to address growing needs and demands and shrinking revenues,” said Hillyard. “I’m sorry to say, I don’t think the economy is going to respond very quickly. This year is going to be the most difficult budget we’ve ever done. Plus we’ll have the budget the year after that we’ll have to deal with in January 2011. That’s also going to be a really big challenge.”
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