Estimated read time: 2-3 minutes
- Utah's revenue estimates show a $2.3 million deficit for 2024.
- Legislative leaders are advised to use "Rainy Day" funds to buffer shortfalls.
- The budget includes $145 million for reserves and $231 million for tax cuts.
SALT LAKE CITY — The state revenue estimates presented to Utah legislative leaders Monday included some red ink.
"I'm known for my optimism," the Utah Legislature's chief economist, Andrea Wilco, told members of the Executive Appropriations Committee before going over estimates that show a $2.3 million deficit for 2024 and nearly $24.5 million less in the general fund than anticipated in the current budget year that ends June 30, 2025.
But the shortfall, largely in sales tax collections, isn't the only bad news for the budget.
"Since we've done these revenue forecasts, we've actually seen softening, a little bit, of the income tax," Wilco said, adding, "I'd like to just warn you, there are some risks in these numbers." She advised the Republican and Democratic legislative leaders who serve on the committee to set aside money, including in the state's "Rainy Day" funds.
"We think that will then provide you with a little bit of a buffer and then we'll look at these numbers again in February," when estimates will next be updated. Currently, both sales and income tax collections for the 2026 fiscal year are projected to be 3.7% higher than anticipated in May.
The estimates are consensus numbers, agreed to by not only state lawmakers, but also Gov. Spencer Cox, who last week released his proposed $30.6 billion budget for next year. The 2025 Legislature will have the final say on the budget during their 45-day session that begins Jan. 21.
The committee members said little about the estimates or even the shortfalls, but did unanimously adopt the consensus numbers as well as a list of nearly $11.6 billion in proposed expenditures that will enable what's known as the base budget to be ready for the start of the session. That budget is supposed to be what's needed to keep necessary programs, like a proposed fund earlier this year to continue a state-wide dual language immersion program, going.
Also on the list approved Monday is $145 million for the "Rainy Day" funds as well as setting aside $447 million "for later consideration" by lawmakers, including a total of $231 million for another round of unspecified tax cuts, $104 million for state employee raises, and $112 million to cover any potential losses in "high risk revenue."
The spending — and the set asides — use up the expected revenues.
"You're down to zero available for additional spending, both one-time and ongoing," Legislative fiscal analyst Jonathan Ball told the committee. Ball said there is about $1.2 billion in the state's largest "Rainy Day" fund.
He said additions to the funds have been "static" because revenues haven't triggered automatic deposits. But, Ball said, putting $145 million in the "Rainy Day" funds would return the state to previous targets of saving 9% of the general fund and 11% of the income tax fund.
