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Budget Issues Remain Despite More Tax Revenues

upr.org
The Utah State Senate.

The Utah Office of the Legislative Fiscal Analyst announced Monday that state tax revenues are up $380 million since the last estimate. With the money, the state legislature could increase spending in 2016. While many welcome the added revenue as an indication of a healthy local economy, others are urging caution.

Logan Republican Sen. Lyle Hillyard said that income taxes are driving the boost, which is a sign that more people are working. However, he said that expectations surrounding the state sales tax have fallen short.

“The sales tax has not really met our projection. So we ended up, the fiscal year that ends on June 30 of 2015, being a $15 million short of what we projected the sales tax would bring,” Hillyard said. “This year, right now, we’re projecting we’re going to be about $30-35 million short.”

Utah’s public school enrollment is expected to increase next year. Hillyard said that the revenue boost may not be able to cover the growing cost of social services.

“If we fully fund the growth, which is under 10,000 students, in public education this year is going to cost us $90 million of that,” he said. “When you take $90 million off the table, it has some impact of what else you can spend for. Salaries are always an issue in the legislature; what do we pay teachers, what do we pay highway patrolmen. Medicaid, it looks like, is going to cost us $38 million dollars of ongoing revenue to fund just the new enrollees. That has nothing to do with the debate about expanding Medicaid.”

Gov. Gary Herbert is expected to unveil his next budget proposal Wednesday morning.