SALT LAKE CITY — Lawmakers now have a total of $581 million in additional revenues to spend this session — and that's not counting the $80 million windfall expected as a result of federal tax changes.
The final estimates add $126 million in anticipated revenue growth and $83 million to the budget surplus to the $327 million in revenue growth or ongoing money, and $45 million in surplus or one-time funds already expected.
"Now the real work begins," Senate Budget Chairman Jerry Stevenson, R-Layton, told the Senate on Wednesday after announcing the numbers. "We do have the money to answer some of the problems."
The revenue estimates also include $68 million in cuts made earlier in the session by legislative appropriations committees, money expected to be added back now that base budgets have been approved.
“The good news is our economy continues to grow," House Budget Chairman Brad Last said in delivering the new revenue projections to the House.
But Last, R-Hurricane, reminded lawmakers that the last time they saw such lofty numbers was in 2008, just prior to nationwide financial crisis.
“While things are going well and we’re excited, (we) always have to keep in mind it’s not going to last forever,” he said.
Gov. Gary Herbert was upbeat about the new numbers.
“The revised revenue numbers released today show the strength of Utah’s economy,” Herbert said. “This consistent growth provides us with the opportunity to make much-needed investments in education, an issue that is a top priority for both my administration and Utah’s Legislature.”
Stevenson noted the additional revenues are close to what the state ended up with during the 2017 session. Before the 45-day session ends in just over two weeks, lawmakers will settle on a spending plan for the budget year that begins July 1.
Even before the new revenue estimates were completed, GOP House and Senate legislative leaders have been quietly putting together a tax reform package that will include both a tax cut and more money for education.
Utah is expecting to collect another $80 million thanks to the $1.5 trillion tax cut passed by Congress just before Christmas. Much of the additional income tax revenue will come from small companies that file individual returns.
Those companies get a 20 percent tax break on their federal returns to match the cut Congress given to corporate taxpayers, but legislative leaders have said there's no need to do the same because Utah's individual and corporate rates are the same.
Both the House and Senate leaders are said to be in agreement over using part of the $80 million for a $55 million income tax cut, reducing the state's 5 percent individual and corporate rate to 4.95 percent.
More money for education is also a priority for them, in light of the Our Schools Now ballot initiative being circulated that would boost both sales and income taxes to raise $700 million for schools annually.
Leaders in the House and Senate are "not on the same page right now," Stevenson said, about what form that additional spending for public education would take. Proposals include a $2,000 teacher bonus and freezing the state property tax levy.
House Majority Leaders Brad Wilson, R-Kaysville, said legislative leaders are planning a “modest” tax cut and some funding measures that would stabilize and make education funding less volatile.
“We’re still working through the details on that,” Wilson said. “It’s still being finalized, but we we’ll be rolling that out by then end of the week, first of next week.”
Lawmakers “have all the ingredients worked out,” he said, but a looking to roll them into on bill.
Senate President Wayne Niederhauser, R-Sandy, said the latest revenue estimates will help determine what's in the final tax reform package. He said he also wants to see a $30 million corporate tax break included.
"We haven't come out arm in arm," Niederhauser said of the ongoing discussions with House leaders. He said the tax cuts will likely be handled as individual bills.
Senate Republicans have long opposed reducing the sales tax base by eliminating the 1.75 percent tax on food, and Niederhauser said Wednesday, "I can't see how anything's changed."