Gov. Mike Leavitt begins his yearly media blitz Thursday explaining to Utahns how he wants to fund hundreds of state programs for fiscal 2001-2002.
And as he prepares for what lawmakers call "the governor's dog and pony show," legislative leaders are gearing up for a $7 billion-plus budget for next year that will include upward of $500 million in new revenue.
"It will be a very good budget year, one of the best in a decade," said House Majority Leader Kevin Garn.
To blunt recent criticism of the budget unveiling, Leavitt, who starts a third four-year term in January, is meeting with GOP House and Senate members. On Nov. 27 he met with Utah County and southern Utah GOP lawmakers. Monday night he went to a Layton motel to meet with Salt Lake, Davis and northern Utah legislators of his own party.
The governor "seems to be listening to us," said Garn, who in the past has criticized how Leavitt releases his proposed budget.
Leavitt's budget proposals will begin trickling out Thursday and Friday with announcements on efforts to keep nuclear waste out of Utah and higher education funding. More media events follow next week, including the release of a much-anticipated public education spending plan that comes on the heels of Tuesday's teacher walkout.
"We have some great initiatives in all the areas the governor has committed to show leadership," said Leavitt spokeswoman Vicki Varela. "We'll be able to address long-term areas of need."
Leavitt chooses to release his plans in small chunks, saying separate announcements make the complex state budget more understandable for the public.
But some lawmakers see the practice as a week of gubernatorial budget campaigning. At one point several years ago, a couple of House Republicans talked about "gagging" Leavitt — not letting him talk publicly about his budget until lawmakers convened. Conservatives complain that it's tough to cut Leavitt's spending proposals after the governor has promised a certain level of program spending.
Legislators, who have final say on the budget, will be looking at around $155 million in "one-time" monies left over from the past fiscal year ($113 million in surplus) and ever-building surpluses for the current budget year.
The latest Utah Tax Commission revenue forecast for fiscal 2000-2001, the budget year we're now in, shows a $43 million surplus in the General and Uniform School funds, the two main funds in the state budget.
It's likely lawmakers will open the current year's spending plan during the January/February general session and use some of that money. "The revenue estimates for the current year are growing, up from even October's estimates," House Speaker Marty Stephens said Tuesday.
Over the next five fiscal years, legislative fiscal analyst John Massey estimates state revenues will grow from between 3.6 percent to 6.8 percent. That's healthy growth, but short of some of the double-digit growth years of the early to mid-1990s.
However, the 2001 Legislature will be awash in money — both in ongoing new revenue growth and in cash-in-the-bank and estimated fiscal 2001 surpluses. Legislative leaders expect a preliminary budget forecast later this month to show about $500 million in new, spendable revenue.
"There will be a lot of money" for lawmakers to make decisions about, said Garn, R-Layton.
It's likely Utahns will see some kind of tax cuts or adjustments, although they may not be very large and may be targeted to areas not directly seen by everyday taxpayers.
Utah's income tax brackets may be indexed by lawmakers for inflation. A legislative interim study committee has adopted a bill accomplishing that.
State personal income tax brackets haven't been changed for inflation since 1973. The result is that more low-income Utahns have been forced onto the tax rolls and have, through yearly salary inflation adjustments, been pushed into higher brackets. More than 60 percent of Utahns are now in the highest tax bracket, paying 7 percent on income of more than $7,500 a year.
Garn said there's a possibility that in indexing the brackets, lawmakers could decide to lower rates or make some other adjustments next year that could mean an actual personal income tax cut for some or all Utahns. "That will be discussed," Garn guesses. The bare-bones bill would cost only $5 million, not much out of $500 million in new revenues.
Lawmakers could also extend the current manufacturer's sales tax exemption on equipment replacements to the mining industry. Some lawmakers want to encourage financially stressed coal companies to reinvest in Utah.
There's also talk of tying some portion of the hazardous waste fees paid by companies dumping trash in huge West Desert storage facilities to public education. A rise in those fees could mean more cash for Utah schoolchildren. But Stephens, R-Farr West, doesn't like the idea of earmarking any taxes.
Still, it's unlikely there will be a huge tax cut in 2001, says Garn. "There's absolutely no talk" of a tax increase for education or for any other reason. "The worst thing we could do is tax a prosperous economy," Garn said.
When the proposals will be released
Gov. Mike Leavitt announces his 2001-2002 budget proposals:
Dec. 7 — Nuclear waste
Dec. 8 — Higher education
Dec. 11 — Public education
Dec. 13 — Economic development
Dec. 14 — Overall budget
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