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By Lyle Hillyard
Senate Chair of Exec Approps

Now the session has ended, it is interesting to hear all the comments about what a good job was done in so many areas where the concerns at the beginning were so great. Let me reflect on what I spent most of my time doing – that was the budget.

The process we used seemed to work well. We knew that we were going to need budget reductions in face of the falling revenue collections. The first week was like the last week because it was full time for me to complete the changes on the 09 budget.

After February 17th when the new revenues were announced, it was full time again completing the 2010 budget. Many were concerned that our goal of cutting 15% was way too high but it turned out that this amount was correct when we added in the money needed for growth items such as public education and Medicaid.

We did not need to use our Rainy Day fund or the Education set aside because of the federal spending package. We used about $400.0 M for that and saved the $514.0 M in the two state funds. That will give us cushion if the revenues continue to slide between now and June 30th when the 09 budget year ends. It will also protect us if we need more help during the 2010 year and as we begin the budget for 2011. Hopefully the economy will rebound before then but that is hard to predict.

We are stretched but I believe the investment into infrastructure of roads and buildings will help alleviate some of the problems we have allow to build in those areas and will immediately put our construction workers to work. The reduction in construction costs is remarkable. For instance, we had planned on the widening of the freeway through Utah County from American Fork to Spanish Fork to cost $2.6 B. The latest projection is $1.725 B. Building costs have gone down by 10% in the last 6 months.

We have also back filled the education and human services budgets so that Public Ed’s cut is 5.2 % (even less than the 6% we originally targeted) and Higher Ed at 9%. Health and Human Services will have a net cut of about 11%. This is a little misleading because their base cuts are about 16% and if the revenues don’t pick up and our reserves are used up, it could be ugly for 2011. We are a lot better positioned than any other state that we have discovered. The bond rating companies continue to rank us as Triple A and are astounded by the fact that we still have not used any of our rainy day funds.

1 Comments:

 Steve said...

Senator Hillyard,
We are fortunate to have someone of your expertise and ethical standards leading the legislature's budget effort.

3/17/2009 3:03 PM  

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