This is an archived article that was published on sltrib.com in 2015, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Utah state government finished the year with a $103 million surplus and analysts are expecting the growth to continue, with booming income tax collections expected to drive the budget as much as $190 million higher next year.
But sales taxes the state can't collect on Utahns' online purchases continue to take a big — and growing — bite out of the state treasury.
"A healthy budget surplus is a sign that Utah continues to live within its means," Gov. Gary Herbert said in a statement Tuesday. "I am proud of Utah's growing economy, and I remain committed to making sure Utah is not only the best-managed state in the nation but also the best prepared for any economic difficulty down the road."
To that end, $59 million of the surplus for the 2015 budget year — which ended June 30 — are required by law to be socked away in Rainy Day Funds, essentially savings accounts that have been tapped during economic downturns. The accounts now hold $528 million, more than any other time in state history.
It is brisk job growth that is driving the state surpluses, both in 2015 and the projected growth for the coming year. Income-tax revenues came in $119 million higher than projected for the 2015 budget year and are projected to grow by as much as $175 million next year.
"Overall … economic growth remains strong in the state with more upside potential than downside risk," said legislative analyst Andrea Wilco. "We've actually recovered almost to a boom period in most of the economic indicators."
Sales and use taxes, meantime, have been sagging, with collections finishing the 2015 budget year $16 million below targets and projected growth for the coming year may need to be revised downward by as much as $70 million.
Severance taxes — those paid by oil, gas and hard-rock mining companies on the resources they extract — have been dismal and are expected to come in $20 million lower than projected next year, a result of the fact that both production and price of the natural resources remain down.
And online commerce is sapping the state's sales tax collections, and Internet sales are expected to grow to $188.5 million next year.
Unless Congress acts to tax Internet sales, the only option is for the state to continue to take sales tax dollars out of higher education and move it to other programs, according to Senate President Wayne Niederhauser.
The alternative is more increases to the gas tax, like the 5-cent-per-gallon hike the Legislature passed last session, as a way to pay for roads, which now are funded largely through sales-tax revenues.
"By actually increasing the gas tax this past session, we released some of that pressure" on the sales-tax revenue, he said.
The average wage in the state grew by $929 in 2015, bringing it to $43,116. That remains about $7,400 below the national average. Utah's average is expected to grow $777 next year.
Housing prices grew at 7 percent for the 2015 fiscal year and are expected to climb by 4.5 percent in the coming year.
Twitter: @RobertGehrke