Utah Governor to Sign Legislation Cutting $175M and Balancing Budget

DALLAS - Utah Gov. Jon Huntsman Jr. expects to sign four bills that rebalance the budget by cutting $175 million in spending.

"These bills are the result of the collaborative process that we have engaged to provide a balanced budgetary approach," Huntsman said after passage of the measures on Monday.

The four bills passed by the Legislature were HB 3, covering the state budget; SB 4, which provides for education funding; HB 300, which provides for the state building maintenance fund; and HB 301, which deals with the state's disaster recovery fund.

Though Utah's shortfall looks small compared to neighboring Arizona's recently covered $1.6 billion budget gap, the cuts are still painful, legislators acknowledged. Rep. Brian King, D-Salt Lake City, urged lawmakers to dip into the $414 million rainy-day fund to avoid cutting education spending.

Public school funding took a smaller cut than expected, 1.5% compared to across-the-board cuts of 3.8% for state agencies. The $76 million reduction for schools was less than half of the $194 million originally proposed.

The Utah School Employees Association urged legislators to free up more general revenue for education by using more bonds to finance road construction.

Utah County legislators, mayors, and county commissioners are also urging the use of up to $5 billion of debt to cover expansion of Interstate 15, the major thoroughfare through the Salt Lake City metro area.

In his state-of-the-state address, Huntsman said he ordered that major road projects that had been on hold because of budget constraints be allowed to resume. Like other states, Utah is expecting to gain a share of the federal stimulus package for highway infrastructure.

With the current budget crisis fixed for now, stakeholders in the budgeting process are concerned about further cuts in the 2009-2010 budget that lawmakers are preparing to draft.

"The Utah Legislature has 37 days left to finalize a budget for the 2009-2010 fiscal year," the Utah State Employees Association pointed out in an alert yesterday. "Although revenue projections are not expected to be available for another two weeks, legislators are predicting an additional $100 million in revenue shortfall."

The association is also urging lawmakers to tap the rainy-day fund to avoid further cuts to education.

Among the cuts that may affect bond issuance were postponements of a prison expansion and research buildings designed to save $98 million.

Despite the financial straits, Utah has no indication that its triple-A credit rating from all three major rating agencies is at risk. Standard & Poor's recently affirmed its AAA on the state.

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