SALT LAKE CITY – Legislative fiscal analysts in Salt Lake City have revised their estimates of Utah’s budget position for Fiscal Year 2023-24.
“Thanks to our strong economy, these numbers show that Utah can safely cut taxes and make major investments in water, education, housing and infrastructure,” said Gov. Spencer Cox, welcoming the new estimates from the Office of Legislative Fiscal Analysis and the Governor’s Office of Planning and Budget.
But a national climate of high inflation and increasing interest rates signals that Utah needs to proceed cautiously, according to Cox.
“We’re grateful that the Legislature shares our commitment to fiscal responsibility,” he added.
The good news is that ongoing and one-time funds in the General Fund are up by a combined total of $230 million.
The state also has an additional $12.5 million in ongoing and one-time funds in its transportation fund accounts.
But the state’s accountants admit that they had previously over-estimated ongoing and one-time funds in Utah’s income tax revenue by $230 million.
After accounting for base budget adjustments and set-asides, the new figures leave state lawmakers with the task of allocating an estimated $817 million in one-time funds and $410 million in ongoing money combined in General Funds and Income Tax Revenues during the remaining two weeks of their 2023 General Session.
After the budget announcement, both Senate President J. Stuart Adams (R-Kaysville) and House Speaker Brad Wilson (R-Woods Cross) echoed the governor’s sentiments.
“We can never be too cautious and prudent as we plan for the next fiscal year,” Wilson said.
But the Wood Cross lawmaker added that he remains optimistic that the Legislature will be able to make “significant, generational investments” in areas such as water, housing, transportation and education.
Adams concurred, saying that senators are pleased to be cutting taxes and providing record education funding despite the recent pandemic and a slowing national economy.
“Additionally,” he noted, “ongoing tax revenues are being spent on one-time projects, resulting in a significant, working rainy day fund, something that no other state has.”
That alone will position Utah to navigate economic downturns in the future, Adams boasted.
State officials attribute the new revenue growth to the ongoing momentum of Utah’s economy and the conservative policies that have guided the Legislature for the past 15 years.
They acknowledge, however, that the country as a whole is facing predictions of an economic slowdown due to out-of-control federal spending, rising interest rates, soaring inflation and industry layoffs.
Cox announced his proposed $28.4 state budget in early December of 2022.
That proposal included an income tax rate reduction; a $6,000 compensation increase for Utah teachers and a 5 percent increase in the state’s Weighted Pupil Unit; increased funding for mental health services, first-time home-buyers and victims of domestic violence; and more than $500 million for investments in water conservation, quality, research, infrastructure and management.
Some of those recommendations have already been enacted by the Utah Legislature.
Lawmakers must finalize the state’s budget before their legislative session ends at midnight on Mar. 3.
Utah’s next fiscal year will begin on July 1, 2023.