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Utah Legislature starting process of dealing with increased surplus revenues

Sun Advocate publisher

On Feb. 13, the Utah Tax Commission released new projected revenue numbers for the state.

The projections indicated that Utah no longer has an estimated $1.5 billion budget surplus.

Instead, the estimate climbed to nearly $1.6 billion.

"This kind of surplus is unprecedented," said Rep. Brad King during an interview Tuesday afternoon. "We have never had this kind of money to work with."

The original surplus budget estimate came out last December.

But since then, the state treasurer determined that the figures are expected to include an additional $77 million in ongoing revenues and $72 million in one-time money.

"It's a time to be careful and not let things get out of control," pointed out King. "I find myself having to remind people what it was like just a few years ago when we didn't have enough money to even fully fund a lot of programs."

After serving in the Utah Legislature for a decade, King is presently 15th in seniority between the Senate and House of Representatives.

"A lot of people leave this kind of a life for business, for personal reasons and, of course, some of them lose elections and don't return," noted the representative. "The point is that we have people here who have never had to work with a tight budget, so it could be easy to get carried away with spending when the state is flush with money."

The new revenue estimates received subdued response from Utah legislators on Tuesday because of the tragic events of the night before at Trolley Square.

"It is very glum around here today," said King. "Things are quiet. No one is talking about anything else, but the shootings last night."

One of the legislators from the Democratic caucus was in Trolley Square on Monday night and had an unsettling story to tell fellow lawmakers.

Nevertheless, the legislature will soon start the process of dealing with the surplus revenues.

The legislators set a spending cap on many state departments a few years ago and seem determined not to violate the limits.

"There are only a few state departments that don't have caps and that includes public education, transportation in terms of the Centennial Highway fund, transportation investment fund and any programs that are tied to federal service mandates," explained King. "There is also a bill in process that would remove higher education from the spending cap as well."

Three of the four programs identified by the representative could affect Carbon County if the extra money goes into the funds.

Increasing the state's allocations for public education and the money earmarked for the Centennial Highway fund could directly benefit the local area.

Additional money could be available for schools losing population bases in the county and increasing the CHF could pay for more improvements on U.S. Highway 6.

And if a bill were passed to allow the spending cap to come off of higher education, the College of Eastern Utah and the Southeastern Applied Technology College could be affected as well.

The revenue caps take into account factors of increased population and inflation, indicated the representative. Therefore, allocations can increase according to the statistics even with a spending cap in place.

"Up until two years ago, it could also be affected by overall personal income," said King. "But that was taken off a couple of years ago."

A significant portion of Utah's increasing surplus revenues last year came from the personal income facet of state taxation.

Personal income has increased dramatically, primarily because there are so many jobs in Utah begging for workers and the pay scale has gone up to attract employees to fill the positions.

The new revenue projections also consist of money from interest from state investments and increased corporate income taxes, added the state representative.

"Problem is that these two forms of money are the most volatile," explained King. "The state thrives when good interest is being paid on investments and when companies are doing very well. It can be a real downturn if those areas of income generation go away. Both sources of funds fluctuate wildly."

The Utah Legislature always has the option of spending the surplus monies on buildings, infrastructure and other one-time items.

"If we get into things like salaries and ongoing programs with money like this, we can get into real trouble. I am going to try and convince those around me that we should be conservative with this money for the rest of the session," concluded King.

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