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With $370 million in projected new money, there will be a feeding frenzy not seen for years in the 2005 Utah Legislature. Having more money makes budgeting even harder because the expectations of education, agencies, special interests and state employees jump dramatically.
It’s terrific that the economy has rebounded enough to produce the additional revenue. But one good year does not mean good times will continue into the future. So it would be unwise to either cut taxes generally or build all the increase into agency base budgets. Better to use the bulk of the increased revenue for one-time appropriations like transportation projects and buildings.
There will be pressure to cut taxes, but after so many years of extremely tight budgets, and with such enormous transportation and education needs ahead, a general tax cut wouldn’t make sense. There is no real clamor among citizens for a tax cut. The increased revenue will make it difficult to raise transportation taxes, like the gas tax, but it might make sense to juggle some taxes to provide a more stable revenue source for transportation, while keeping overall revenue neutral.
For example, to properly fund transportation and provide stability over the next several years, the lawmakers could raise the gas tax, turn it into a sales tax, and dedicate vehicle sales tax revenue to transportation, while reducing other taxes commensurately. The higher projected revenue provides the flexibility to do some creative things for transporation funding without increasing taxes overall. |
