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Show Utah Faced With Problem Surrounding Tax Lag Utah is faced with a serious budget balancing problem in the 1967-69 bir ennium because of the overly ov-erly optimistic revenue estimates es-timates contained in the 1967-69 Governor's Budget Bud-get and used by the 1967 Utah Legislature in making mak-ing their appropriations for the biennium. ' This was pointed out in a . study just released by Utah Foundation, the private pri-vate tax research organization. organi-zation. The Foundation analysis shows that actual revenue collections in the general fund and the uniform school fund for the 1967 fiscal year were $5.4 million mil-lion below the official estimates es-timates used at the' time of the 1967 legislative session. The unofficial estimates es-timates made ' by Utah Foundation were considerably consider-ably more ' conservative and eventually proved to be only slightly high exceeding actual collections collec-tions by $1.0 million, or 0.8 per cent for fiscal year 1967. Even more serious than the $5.4 million shortage in revenue for the 1967 fiscal year, according to Foundation analysts, Is the fact that estimates of revenues rev-enues for fiscal 1968 and fiscal 1969 were projected v in the budget from this optimistic op-timistic 1967 estimates. Even if the projected rates of increase used in the budget for the next 'two years are correct, the. fact that sucth projections will be made from a much lpw-er lpw-er base would greatly reduce re-duce the expected revenues reven-ues for the next two years. As a result, the Foundation Founda-tion concludes that the total to-tal shortage of funds in Utah for the 1967-69 biennium bi-ennium could be several times the $5.4 million shortage shor-tage incurred in fiscal 1967 alone. Another dark cloud on the horizon, the report continues, is the prospect of a Federal tax increase later this year. Such an increase would have a direct dir-ect effect in reducing state individual and corporate income tax collections, as well as adversely affecting other state tax revenue collections, such as the sales tax. A prolonged labor la-bor dispute in Utah could have a similar adverse effect ef-fect on state revenues dur- inr. Ln . ! 1 1 Jl iiifc; 111c luu UMUHU. Earlier this - year the Governor predicted that the state would end the 1965-67 biennium with a surplus of $11.3 million in the general fund and the uniform school fund. This expected "surplus" has almost al-most vanished because of the failure of revenues to meet expectations and the fact that the 1967 Legislature Legisla-ture appropriated $5.5 million from this expected surplus for bond repayment. repay-ment. The Foundation report observes that the failure of revenue collections to meet earlier expectations could force Utah (1) to trim expenditures by cut ting back on the appropriation appropri-ation allocations to the institutions of higher learning lear-ning as well as other general gen-eral fund agencies andor (2) to increase revenues through a state property tax hike above the 7.3 mill level contemplated in the budget. The only bright spot seen by the Foundation in this rather gloomy revenue reven-ue picture, is that total property tax valuations in 1967 will be higher than anticipated. Preliminary estimates by the State Tax Commission place the total to-tal assessed valuation more than $50 million above the estimates used in the Governor's Go-vernor's Budget. Assuming Assum-ing a similar under-esti-mation of the property tax base in 1968, the total savings sa-vings to the State in nigh-er nigh-er state property tax collections col-lections and reduced state aid from the uniform school sch-ool fund could amount to more than $3 million during dur-ing the 1967-69 biennium. |
