14 October 2014
. Posted in Today At Utah Policy
Good times continue to roll for Utah State government; new tax revenue updates show in the current fiscal year the state’s two major funds should show between a $70 million and $200 million surplus.
Those are the largest surpluses (at the $200 million mark) in recent years.
Just a month ago, final audited figures show that for last year there was a $166 million surplus in the Education Fund and the General Fund, the two funds that basically pay for state government operations.
In addition, the new updates for fiscal 2014-2015, which started July 1, show that the state’s Transportation Fund could come in next June between $10 million in the hole, or $10 million in surplus.
Typically, during the January-through-March general legislative session, lawmakers open up the current year’s budget and spend some of the surplus – if there is one.
In bad times, like the last Great Recession, lawmakers open the budget sometime during the budget year and actually cut program spending.
But that certainly isn’t happening this year.
In fact, legislative and administration economists are usually conservative in their tax revenue forecasts, meaning when state budgets are finally balanced at the end of the fiscal year there is more money coming in than mid-year assumptions.
Of course, GOP Gov. Gary Herbert has been bragging about Utah’s economy – and growing tax revenues – for several years.
Utah has one of the lowest unemployment rates in the nation (around 3.5 percent) and some of the highest economic growth, as well.
The new forecasts say Utah is doing well because:
-- Corporations are running high cash balances, and so are able, if they desire, to invest more money in production.
-- Utah businesses are humming, greater output, better sales.
While all is good, state economists (being economists) warn some things could go south.
-- The Fed could still raise interest rates, which is usually toxic to businessmen and women.
-- While the stock markets near record highs, that alone is cause for concern. Europe seems to be falling back into recession – a triple dip recession, which is rare, historically speaking.
And a stock market collapse, like seen in the Great Recession, remains possible.
-- Finally, parts of the world are either in war or in trouble for a variety of reasons.
However, the economists say in their report to the Executive Appropriations Committee: “We remain optimistic that the Utah and U.S. economy will continue to grow modesty over the next 12 to 18 months.
“In particular, we expect Utah to remain a growth leader nationally.”
As usually, Sen. Lyle Hillyard, R-Logan, the Senate’s budget chairman, says before folks and special interest groups start spending some of that $200 million in their minds – in preparation for the 2015 Legislature – they need to recognize that money has not come in yet, and that there will be all kinds of demands on it.
Several civic and political groups are already planning on asking the 2015 Legislature for some kind of tax/revenue enhancements for public education, water development and road construction and repair.
And if there is a $200 million surplus in tax dollars, politically speaking asking for more taxpayer money will not be an easy sell to Utah’s traditionally conservative members.
