A record state budget surplus for Utah is now official.
After months of rapidly escalating estimates, the final surplus for the 2005 fiscal year, which ended June 30, is $170.4 million, according to numbers released Thursday by the Governor's Office of Planning and Budget.
By comparison, last year's surplus was $93 million. In the 2000 fiscal year, when the state had another record-setting revenue stream, the budget surplus was $110 million.
In all of those years, more than a third of those revenue surpluses were transferred to various funds, as required by statute. This year, $31.7 million was put in the General Rainy Day Fund, bringing its balance to $105.6 million, and $26.7 million was moved into the Uniform School Fund Rainy Day Fund, bringing it to $40.2 million. Another $4 million was put in the Tourism Marketing Performance Account and $3.2 million was put into the industrial assistance fund.
After the transfers, the surplus that can be spent by legislators is $104.8 million. Of that, $80.2 million goes to the Uniform School Fund and $24.6 million goes to the general fund.
Richard Ellis, director of the Office of Planning and Budget, said that this year mirrored 2000 in many ways, especially the source of the additional revenue: personal income, especially from capital gains. Although the 2000 revenues were attributable to a booming — and soon collapsing — stock market and this year's personal income owes more thanks to real estate, both are "one-time money from a source that is volatile."
In other words, it's probably best for legislators to not expect another year with this kind of revenue surplus.
"I think we're in real good shape for the (2006) fiscal year, and we should have some type of surplus next year," Ellis said. "But we shouldn't build this into future budgets."
The additional revenue will probably give added heft to tax reform proposals that legislators are focusing on this summer, although it is unlikely that any significant tax cuts would be built into next year's budget based on the one-time revenues. Instead, legislators should probably look toward funding transportation and building projects, Ellis said.
House Speaker Greg Curtis, R-Sandy, was understandably thrilled about the surplus, even if it was not a surprise, and said "it indicates the economy is recovering." The money could fund any number of projects, especially needed capital improvements for higher education and public education, as well as transportation needs.
Still, he echoed the caution voiced by Ellis, especially considering recent events such as Hurricane Katrina, which have pushed gas prices skyward. Because of those concerns, the money will probably not fund projects that require ongoing funding.
Gov. Jon Huntsman Jr. said in a statement that he'll determine recommendations for the surplus when he begins working on his annual budget later this month.
"The numbers indicate that the Utah economy is strong and vibrant," Huntsman said.
Educators are also looking at ways to utilize their new money, even if all of their needs cannot be filled with the one-time funds. The state Board of Education already has a list of projects for the schools' share of the surplus: $10 million each for online testing and education technology; $15 million to make school buildings safer; $6 million for teacher supplies; $1 million for software to help children improve writing skills.
"I would hope they would get high consideration by legislators," board chairman Kim Burningham said.
Not all of that money will go to public education, however, because higher education can also tap the Uniform School Fund. Higher education administrators are "thrilled" with the economy, said spokeswoman Amanda Covington, but they have not specified possible projects.
The State Board of Regents, which oversees public higher education, is meeting next week with the State Building Board to talk more about capital development projects, with the regents' proposed budget expected in October.