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Friday, January 19, 2007

Digging into the Numbers

Tax cuts, debt reduction, education, transportation....

When we dig into the details of the state's budget priorities, calculator in hand, it’s amazing how fast we reach the point where someone says, “… and then there’s no money left for anything else.”

Here are the numbers.

In fiscal year ’08 the State of Utah will have an additional $1.565 Billion dollars to spend or give back to the taxpayers. $676 Million dollars will be ongoing revenue. $760 Million will be one-time money.

Re: $676 Million Ongoing

Our colleagues in the House have suggested setting aside $227.2 Million of the $676 for education (that is $300.0 Million minus the $72.8 M already slated for education growth in the Base Budget Bill), which brings the total ongoing money available to $442.8 Million. The idea is to take out an additional $300 Million for a tax cut, which leaves $142.8 Million for everything else.

What is "everything else?"

Well, the governor has proposed $70 M ongoing for transportation infrastructure. That is probably a good idea. We also need to give state employees a cost of living increase, which will cost $10.7 Million per percentage point. So, a two percent increase for all state employees will cost $21.4 Million. A three percent raise would cost $32.1 Million. We also need to reserve $18 Million for health insurance and retirement. Committee priorities have yet to join the equation.

Do the ruthless math and watch how fast even an unprecedented surplus is whittled down.

That said, we’re excited to
  • Do some great things for education this year;
  • Provide necessary funding for transportation,
  • Take care of state needs; and
  • Give the extra money back to the taxpayers.
We are going to continue working out the details in a special caucus meeting tomorrow (Saturday). The goal is to flesh out some initial decisions that make sense.

Re: $760 Million One Time Money

Most of us feel like it makes little sense to go deeper into debt this year - in fact, we should be paying off as much debt as possible. If we pay cash instead of bonding for current state projects we need to complete, we’ll need to reserve $400 Million from our one-time pot of gold ($50.0 M to finish the Capitol Renovation, $100 M for roads and $250 M. for Centennial Highway construction).

That would leave the state with $360 Million net one-time money. Paying off existing debt could eat into that to the tune of almost $200 Million ($194,925,000 to be exact). If we want to pay cash for USTAR instead of bonding, that would be another $110 Million.

Again, the Senate Majority will meet for a special planning caucus tomorrow (Saturday) to dig deeper into these numbers and make some tough choices.

We’re excited by the unprecedented opportunity facing our state this year. We're honored by the weight of the consequential decisions before us, and are looking forward to working with our colleagues downstairs on priorities and the ultimate direction of state policy.

Stay tuned.

2 Comments:

Blogger The Senate Site said...

We sent this Media Advisory. If you didn't get it, but wish you had, drop us a line and we'll check to make sure you are on the Senate E-mail list.

FOR IMMEDIATE RELEASE
January 19, 2007

SENATE LEADERSHIP TO REPORT ON SPECIAL PLANNING CAUCUS

WHO: Utah Senate President John Valentine and members of Senate Majority Leadership.

WHAT: Informal briefing and discussion of the Senate Majority's Planning Caucus which will be held Saturday morning.

WHEN: Saturday, January 20, 2007, at 1:30 p.m.

WHERE: The Utah Senate President's Office, W115 Utah State Capitol Campus

# # #

NOTES:

1. One of the primary goals for this caucus meeting is to continue analysis of the budget numbers and start to move forward on plans for a tax cut, debt reduction, education funding, transportation funding, cost of living increases for state employees, etc.

2. You can find current budget information at http://senatesite.com/blog/2007/01/digging-numbers.html and http://www.senatesite.com/Documents/AvailableRevenue07.pdf.

1/19/2007 7:27 PM  
Blogger The Senate Site said...

FOR IMMEDIATE RELEASE
January 20, 2007


SENATE MAJORITY SETS POLICY DIRECTION FOR THE ’07 SESSION

SALT LAKE CITY - Earlier today, the Utah Senate Majority met in caucus to discuss policy and priorities for the state budget surplus. After a detailed analysis of the numbers, they established the following policy goals and proposals for the current legislative session:

1. Fund Public Education at levels at, or to exceed, the $320 Million proposed by the Governor.

2. Continue work on tax reform. The Senate Majority would like to bring the flat tax rate down to a level at which many more Utahns will benefit. In addition, they would like to consider tax cuts for research and development which will attract more business to Utah, equalization of cable and satellite TV tax, and a renewable energy credit. A statewide uniform rate for sales tax on food will also be considered.

The Senate Majority proposes that $150 million is a reasonable tax-cut target this year.

3. Avoiding unnecessary public debt is a top priority. The Senate Majority intend that the state set aside enough one-time money for projects such as roads and buildings so no bond will be necessary. In addition, they support using much of the surplus to pay down existing debt.

4. A pay increase for state employees is a top priority. This will help the state keep up with the cost of living and to attract and retain a qualified workforce.

5. The Senate Majority supports increased funding for Utah’s transportation infrastructure.

6. Significantly increasing the state’s investment in Higher Education will also be a top priority.

The Senate Majority deferred making final decisions on some of the above dollar amounts in anticipation of the appropriations committee and public input process. They encourage citizen participation and look forward to hearing from all impacted parties.

The Majority also looks forward to working with their colleagues in the other half of the legislature and on the opposite side of the aisle to develop sound policies for the good of the state.

# # #

1/22/2007 7:25 PM  

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