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Continued economic growth means Utah lawmakers will again have more than half a billion dollars to spend on education and other state programs when they gather next month for the 2016 legislative session.
The $560 million in new revenue announced Monday, hailed by leaders as a sign of a positive economic climate, will be added to the state's current $14.2 billion budget.
"Utah's economy continues to be the envy of the nation, and today's budget numbers reflect that growth," said Gov. Gary Herbert, who will release his budget proposal Wednesday outlining how he prefers to spend the new money. "Our continued commitment to fiscal conservatism has led to an encouraging budget projection for the upcoming fiscal year."
But there is an imbalance in where the money is coming from and where it can legally be spent that could pose a challenge for legislators.
Of the $560 million in new tax revenue announced Monday, nearly all of it $532 million comes from income tax and is earmarked under Utah's Constitution to be spent on public and higher education.
That leaves legislators with just $28 million extra in the General Fund money primarily from sales taxes to cover potentially critical areas in every other state program, barring some accounting maneuvers.
For example, the first phase of plans to move the prison is expected to cost an estimated $115 million. Lawmakers were told Monday that growth in Medicaid and other programs will cost the state an additional $36 million next year. And even a 1 percent pay raise for state employees will cost $24 million.
On top of that, budget leaders voted to set aside $37 million from the Education Fund and $15 million from the General Fund to spend on state building upgrades and maintenance.
"We hope come February [when final budget numbers are released] there's additional revenue, but we never know that for sure," said Senate budget Chairman Lyle Hillyard, R-Logan. "I think that puts into perspective, this is a lot of money $560 million but there are a lot of demands out there, as well."
Hillyard said legislators will have to dig deep into the budget to find programs that could be cut to meet the new needs. The other alternative is to pull General Fund money out of higher education and replace it with Education Fund dollars, a sort of accounting shell game lawmakers have routinely done in recent years.
Last year, legislators added $630 million in new money, meaning the revenue growth is actually off the previous pace by about $70 million.