State ends fiscal year with $98 million surplus

Budget • Tax revenues are up and spending was cut.

This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Despite a sluggish economy, Utah officials managed not only to live within their means but even ended up with a little extra money in the state's coffers at the end of fiscal 2012.

They finished the budget year, which ended June 30, with a $98 million surplus.

Officials said Tuesday that $46.5 million of that will be available for appropriation in next year's session of the Legislature — allowing agencies and lobbyists to fight over it.

The rest is automatically transferred by law into a variety of funds.

That includes $45 million for the Rainy Day Fund, $5 million for the Disaster Recovery Fund and $1.9 million for the Industrial Assistance Fund.

Gov. Gary Herbert said his administration plans to use the surplus — at least that part available for appropriation — "to strengthen Utah's economy and fund education."

House Speaker Becky Lockhart warned that lawmakers will be tightfisted with it.

"I know people will look at this $46 million, rub their hands together and say, 'Happy days are here again,' somebody's getting a pet project. But let me be very clear: No," she said.

Lockhart said the surplus comes from "making do with what we have and making our dollars stretch as far as possible," so lawmakers will be careful with it.

Data presented to the Legislature's Executive Appropriations Committee showed that the surplus came as some types of tax revenues increased in the year, suggesting the economy is improving.

For example, sales-tax and personal income-tax revenues both increased by 7 percent, while corporate income taxes increased by 4 percent.

"Although too many Utahns are still hurting, our economic progress has been steady and is out-performing many other states," Herbert said. "Utah's economy is clearly getting stronger as we continue to add much needed jobs."

Also contributing to the surplus is that the state cut spending from 2011 levels in key areas. It spent 17.9 percent less in natural resources budgets; 9.1 percent less in community and culture; and 0.2 percent less in public elementary and secondary education. It did spend more in some areas. Medical assistance was up 5.4 percent; higher education funding was up by 3.9 percent over 2011; and public-safety spending was up by 2.8 percent.

The Executive Appropriations Committee also heard that it may have made a good investment last year by creating a new Medicaid inspector general to look for waste, fraud and abuse in that federal-state program.

Inspector General Lee Wyckoff said the program found $28.9 million worth of such problems. He figures that for every $1 the state spent on his office, it is getting a return of at least $9.06. He said his office is generating about $733,000 per employee in savings for the state.

Wyckoff said the high return rate will likely decrease over time as health service providers become more aware of his office and work harder to live within rules knowing the state is keeping a sharper eye on expenses.

"We hope you work yourself out of a job," said Rep. Mel Brown, R-Coalville, House chairman of the committee.

"I'm sure I can find other work," Wyckoff said.