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Show Utah Legislature encounters Budget Balancing Problems Although the 1976 Utah Legislature concluded its budget session . with ' wisespread disagreement as to whether the state budget for the coming year will be in balance, the fiscal outlook beyond 1977 is even more uncertain. This is the main message contained in the fiscal summary of the 1976 Budget Session prepared by Utah Foundation, the private research organization specializing in studies of state and local government in Utah. Among the items contributing to Utah's long-range fiscal problem, according to the Foundation, are the following: 1. An imbalance between income in-come and outgo in the highway: fund has been only temporarily resolved by transfers from general fund surplus. Eventually , the long-range highway problem in Utah will have to be faced-either faced-either through a drastic curtailment, cur-tailment, of highway activity in the state or by an increase in the motor fuel tax. 2. Enrollment projections indicate that there will be a rapid growth in the Utah schools during the decade ahead. Substantial Sub-stantial sums will be needed for operations and capital outlay to provide for this anticipated increase in-crease in the number of students even at present guaranteed levels of state support. In addition, ad-dition, school expenditures in Utah will also rise as the school program is increased to meet rising costs, higher salary and benefit demands, improved services, etc. 3. Because renewal of the Federal revenue-sharing program is uncertain at this time; it is difficult to make any accurate forecast of revenues beyond 1976. Presently, state and local units in Utah receive more than $36 million a year in Federal revenue-sharing funds. 4. Existing legislation contains provisions which automatically will raise program costs and expenditures in the period ahead. Financing of employee retirement costs and repayment of the 1975 bond issue are two of the items that will have a delayed impact on state finances. finan-ces. Such automatic increases place added pressure on Utah's long-range financial outlook. Total state spending authorized for the 1976-77 fiscal year is estimated at $915 million. This sum is approximately $3 million more than the amount recommended by the Governor ' in his budget, and is about $75 million, or 9 percent greater than the spending level approved for the 1975-76 fiscal year. The Foundation report shows that more than 70 percent of the increased spending for the coming year will go for j education-25 percent for higher education and 46 percent for increased support of the public schools. The analysis furether indicates that approximately 23 percent of the increased funds will be for social service programs. Following adjournment of the Budget Session, the Governor vetoed five appropriation items totaling $2.5 million along with a scheduled reduction in the state inheritance tax. He indicated that he also may make across-the-board cuts in the appropriation ap-propriation allocations prior to the start of the 1976-77 fiscal year if he feels that these are needed to balance the budget based on the latest revenue trends. Foundation analysts point out that the principal difference between the Legislature and the Govdrnor with respect to the budget is that the Legislature revenue estimates for 1976-77 are about $4 million higher than those used by the Governor. After allowing for items vetoed by the Governor, and using the revenue estimates adopted by the Legislature, the State will conclude the 1976-77 fiscal year with an ending combined balance of $5.4 million. On the other hand, if the more conservative revenue estimates employed by the Governor are used in the analysis, the ending surplus would amount to about $1.4 million. In addition to the inheritance tax reduction, which was vetoed ! by the Governor, the 1976 Budget Session reduced state individual income tax rates and eliminated the sales tax on prescription drugs. These latter two reductions reduc-tions are expected to effect tax savings of about $8.9 million. The Foundation study indicates, in-dicates, however, that the most significant tax change made this I year from the standpoint of business is contained in the amendments to the Employment .Security Act, which were ap-1 ap-1 proved by the 1976 Session. The revision will allow Utah to retain its experience-rating plan, but will raise the wage base on which unemployment insurance taxes on employers are calculated. Altogether, the 1976 Budget Session dealt with 209 separate bills and resolutions. The ' Foundation report points out that i the volume of nonbudgetary ! matters considered at budget 'sessions has expanded dramatically since the first budget session was held in Utah six years ago. |
