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Utah lawmakers shave a billion off infrastructure plan over fear of too much debt

Negotiations drop $1.4 billion in bonding to $264 million

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Area at I-80 near 7200 West where the Utah Inland Port is planned to be built in Salt Lake City on Monday, Jan. 27, 2020. Utah lawmakers on Tuesday, March 2, 2021, struck a deal for the last lingering, unresolved piece of the state’s 2021 budget.

Steve Griffin, Deseret News

SALT LAKE CITY — Utah lawmakers struck a deal Tuesday for the last lingering, unresolved piece of the state’s 2021 budget.

House and Senate legislators, who initially disagreed over how much the state should bond for infrastructure projects, landed on a substantially smaller number: $264 million, down from $1.4 billion, according to a new version of HB433.

Tuesday afternoon, the Utah House of Representatives voted unanimously to approve that new version of the spending bill, sending it to the Senate for consideration.

The substitute, put forth by bill sponsor House Majority Leader Mike Schultz, R-Hooper, would also increase the amount of one-time money for infrastructure projects to nearly $1 billion, up from about $823 million from general fund revenues.

“I want to say it’s even better than a compromise,” Schultz told the Deseret News in an interview shortly before the House’s vote on the bill, saying House and Senate lawmakers worked through the issue over the weekend. “I think this is a better way forward.”

In total, the change would bring the House’s originally $2.26 billion spending plan, which would have been a historic amount for infrastructure spending, down to about $1.2 billion.

The change comes after Senate Republican leaders balked at the hefty $1.4 billion in bonds proposed. Senate Majority Leader Evan Vickers, R-Cedar City, said that figure made him “queasy,” expressing concerns about the possibility of an economic “cliff” as Utah continues to recover from the pandemic.

Though the state’s revenues were better than expected this year despite the pandemic’s economic impacts, Vickers worried some ill-effects could still be on the horizon after federal COVID-19 stimulus funding runs its course.

“It still accomplishes all the things we wanted to get done as far as infrastructure projects,” Schultz said, although he said some of them will be delayed maybe one or two years.

“Some might be upset it’s going to take a couple of years longer to get the projects done,” Schultz acknowledged. “But what’s most important is we get the projects done and we don’t have to take on as much debt.”

One item that wasn’t previously included in the budget but was added in HB433 is an investment fund for a solution to traffic gridlock in Big and Little Cottonwood canyons — ski areas that attract visitors across from the nation. The fund would be fed by a percentage of sales and use tax revenue, capped at $20 million a year.

Studies are still being conducted to pick the best strategy, but one that has caught the interest of the governor is a gondola up Little Cottonwood Canyon. Once those studies are done, Schultz said, the Legislature will consider its proposals and use the money in the investment fund to “solve that problem.”

Schultz previously argued it was a “perfect time” to bond that amount, which he said would not increase the state’s current debt levels because other bonds are being paid off. He also argued it would help maintain construction levels that are now winding down on the new Utah State Prison and the new Salt Lake City International Airport.

Schultz said the new version of HB433 would help maintain those construction levels until year 2024, then it “does drop down, so I hope that it doesn’t drop down as far, and so I hope we can work over the next couple of years to figure out a way” to infuse more money into infrastructure.

“But, you know, we’ve got a couple of years ahead of us and we can figure that out,” he said, noting that in future years the state could get another large infusion of one-time cash that could be put toward infrastructure projects.

Senate President Stuart Adams, R-Layton, while discussing the new proposal in a media availability Tuesday morning, said the new plan still means big spending for the state’s roads, economic development and rural areas.

“The list is long,” Adams said. “This is the year for a tax cut, the year for education, the year for infrastructure. It’s the year for affordable housing. It’s the year for funding Medicaid growth. It’s a year for taking care of the (Utah) Inland Port and the Point of the Mountain and other economic development projects. It’s been a heck of a year.”

Adams said shifting the funds to using more one-time money and less in bonding wouldn’t cut into any other programs already laid out in the budget.

“We’ve taken several hundred million off of the table of ongoing money because of the fact we’re concerned that ongoing (money) may not continue because that money is reflective of the stimulus the federal (government) infused into our economy,” Adams said. “If you don’t use it ongoing, it creates the extra one-time money that we’re using.

“And one-time money isn’t very smart to use for employee salaries or ongoing expenses,” Adams added. “So I suppose you could say it may be able to be used elsewhere but generally speaking the best use for one-time money is on one-time expenses, which are infrastructure, and that’s what we’re doing.”

Schultz said all of the projects are still being funded that were in the previous version of HB433, but he did note on the House floor that $36 million for a the proposed Utahraptor and Lost Creek state parks, and $67.5 million to enhance existing state parks were removed because they were already funded in other budget bills that cleared the Legislature on Tuesday.

Both the House and Senate gave final approval to HB3 and SB2, which codify the rest of the state’s over $20 billion budget approved by the Executive Appropriations Committee on Friday. Final passage of those bills approved an additional $238.6 million in ongoing funds and $676.6 million in one-time funding.

Until the session ends Friday night, the Legislature will spend the next three days finalizing bills that have fiscal notes and must approve a final “bill of bills” to solidify all of the state’s funding.

Lawmakers got a scare Tuesday morning when a senator was discussing the budget during floor debate.

Senate Budget Chairman Jerry Stevenson, R-Layton, had just finished presenting the House’s budget bill and was about to present a bill to set up a $75 million “infrastructure bank” for the Utah Inland Port Authority when he told his colleagues he needed to take a break because he was having a “health issue.”

“President, I’m going to have to sit down for just a second, I”m having a health issue right now,” Stevenson said.

Adams then initiated a “saunter” while a Senate secretary could be heard asking Stevenson if she should call 911. Stevenson left the chamber, followed by Adams as the Senate finished its morning floor time. 

Shortly afterward, Adams told reporters Stevenson was “doing great.”

“He gave us a scare, but I would say anybody that runs a $20 billion budget and follows it up with an inland port bill probably needs to be a little bit faint,” Adams said. “But he’s doing OK.”

Adams said Stevenson “just got light-headed.” A fellow senator who is also a physician checked on him, he said.

A Senate spokeswoman said Stevenson “as a precautionary measure” went to a doctor for “further monitoring.” She said he’s “doing well and is planning to return to the Capitol later” Tuesday.

“He’s doing well,” Adams said, “but he did give us a little scare.”

Contributing: Ashley Imlay