Utah revenue growth ‘pretty flat.’ What does that mean for a tax cut this year?
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It doesn’t look like Utah lawmakers are going to have extra money to spend this session, but a tax cut is still a priority for Republican leaders.
“I’m going to tell you what I think. I think things are pretty flat,” Senate Budget Chairman Jerry Stevenson, R-Layton, told reporters during the Senate’s daily media briefing on Thursday.
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The final adjustments to projected revenue collections for both the current and next budget year that begins July 1 are scheduled to be announced on the House and Senate floors Friday, before lawmakers break for lunch, Stevenson said.
Senate President Stuart Adams, R-Layton, tried to sound upbeat,
“Well, that’s better than down,” Adams said. “You see what happens ... prices go up, it causes inflation. Inflation goes up. How do you curb inflation? Raise interest rates. Interest rates go up, what happens to an economy? It dies.”
The Senate president said lawmakers are focusing this session on energy, water and housing, “the things that we think drive an economy and it’s because if you have a strong economy, you have plenty of money” to pay for schools, roads and other needs.
“The budget numbers are reflective of the fact that we need to keep a strong economy going in Utah. We’re going to try to do that this session,” Adams said, adding he still backs what would be a fourth year of tax cuts.
“I’ve not wavered on my tax cut,” he said. “We’re going to measure twice. we’re going to cut once. And we’re going to do it with an eye to the future so we’re going to make sure we don’t make a mistake.”
Legislative leaders set aside $160 million for a tax cut even before the session started and the Senate has already passed SB69, which reduces the state corporate and individual income tax that amount by dropping the rate from 4.65% to 4.55%.
“A tax cut is in the budget,” Adams said, part of what is expected to be added to about $28 billion in base budget spending already approved 10 days into the 45-day legislative session.
Stevenson has already been calling this an “underwear and socks” budget year, comparing what state agencies can expect to an austere Christmas where the best that can be expected are practical gifts.
In the budget year that ended June 30, 2023, state revenues fell nearly $50 million short of expectations thanks to slower than anticipated income tax collections. Legislative leaders were advised in December to be cautious about spending due to revenue
Then, the estimated revenue increase for the budget year that begins July 1 was nearly $638 million, split between $504.2 million in ongoing funds and almost $133.6 million in one-time monies.
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While the GOP supermajority in both the House and Senate have made another tax cut a priority this session, Democrats in both chambers are opposed.
“We’re hoping that we can focus on programs and services that really are needed for our working families,” Senate Minority Leader Luz Escamilla, D-Salt Lake City, told the Deseret News.
Calling the prospect of another year of flat revenue growth “scary,” Escamilla said “maybe that sends a message to my colleagues in the majority to reconsider the $160 million tax cut so we can then get those services in place.”
The minority leader said she wasn’t surprised to hear the state’s finances are relatively static.
“I didn’t expect a huge gap and like, way better numbers,” Escamilla said. “But if it’s flat, potentially being the same, let’s put to work that $160 million.”
