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Show New Spending and Tax Limits I Require Tighter Budgets I 1 Because of taxes and expenditure w l limitation legislation enacted by the I 1979 Utah Legislature. Local units of W government and the state of Utah will A have to undergo considerable budget T tightening after this year. This was m . the conlusion reached by Utah T r Foundation, the private research l organization in an analysis of HB 303, I ' which was approved earlier this year. y i According to the study, if the 1 " limitations had gone into effect with y the 1969-68 fiscal year, cumulative A state and local savings in Utah over j f the following ten years would have 1 amounted to $674 million. By 1976-77, Y r total state and local taxes would have Q i been reduced by $160 million per year, I ' or 19 pecent below the amount ac- y i tually collected. Such a reduction k would have necessitated much closer V scrutiny of spending priorities, and A . some activities and services V r currently performed probably would o i have been reduced or eliminated. T ' When the limits become effective, l state appropriations will be allowed to I rise by not more than 85 percent of the y i percentage increase in the state's A personal income. For local units, the y f increased ceiling in local taxes will be A , equal to 90 percent of the increase in T r per capita personal income with an & k adjustment for local population J r changes. These limits will have the y i effect of gradually reducing the i ' proportion of Utah personal income w i going for state and local taxes. A Foundation analysts pont out that a y f major problem in implementing the A i limitation plan will be the difficulty in Y ' developing the basic data (such as i local population statistics) on which T f the limitation will be based. y i Responsibility for developing these I data rests with the legislative fiscal y I analyst. A l Another problem, according to the y f Foundation, is with respect to ap- A i plication of the law to local school Y r districts. Because a substantial A i portion the total local school tax levy X is the 24 mills required for par- y i ticipation the basic school program, A districts with rapidly rising assessed y w valuations will be adversely affected A k by the limitation provisions. In some Y r instances, application of the & L limitation formula could completely T f eliminate the capital outlay program y V of a local district. A Although the 1979 Utah Legislature y did enact this statutory measure A which places a lid on state spending y I and local taxes, it did not approve a A L resolution to limit expenditure in- Y r creases in Utah by constitutional A L means. Many tax and expenditure Y f limitation proponents contend that O such a constitutional amendment is I f needed to prevent special interest y groups from forcing a breach in A established limits. They claim that Y 9 constitutional limits are necessary to A prevent government from taking an Y r ever-larger . share of the total O economic pie. X f critics, on the other hand, argue W I that a constitutional spending limit 1 f expresses a basic distrust of y representative democracy and tends A to destroy the flexibility required by y I government to deal with continually A changing problems, It therefore Y r becomes difficult to meet sudden A L emergencies wheh government Y f spending limits are locked in by a y i constitutional amendment. X . The new statutory limitations will y i become operative in fiscal years after A l December 31, 1979, for local units of y f government and after June 30, 1981, A v for the state of Utah. Thus, the limits Y f will be applied to counties and A i specified special districts with the I 1980 calendar year, to municipalities O and other local units with the 1980-81 X fiscal year budget, and to the state y with the 1981-82 fiscal year budget. A |