Revenue Updates
Earlier this week, the Tax Commission released the latest revenue summary, detailing collections through January 8th. This month’s report captures sales and wages from the first half of the holiday rush. Accordingly, it’s no surprise that Sales Tax revenues ticked up slightly from December’s revenue recap. In all, collections to the General Fund grew 4.5% over the same period in FY 2023. As we’ve discussed throughout this fiscal year, investment income from rainy day fund balances continues to be a top performer for the General Fund.
Last month, we waited in anticipation not only for these holiday-associated revenue bumps, but also for the year-over-year comparison of quarterly prepayments of State and Local Taxes (SALT) from Pass-through entities. The biggest change from last month was Final Payments surging by 40 percentage points, improving to be effectively identical to last year at this time. Combined with positive withholding, this paints a strong picture for Utah’s labor market.
In total, revenues to all state funds are up 3.6% over the same time last year. The current yearend expectation for these funds is to contract slightly from FY 2023. Economists will update revenue estimates in late February, before appropriations bills are drafted.
Requests for Appropriation
Revenue estimates impact the ability of the Executive Appropriations Committee (EAC) to consider and ultimately fund Requests for Appropriation (RFAs). RFAs are used to fund programs and projects that are not associated with current legislation (Fiscal Notes are used to fund the impacts of policy changes). While the last few General Sessions presented the challenge of effectively using large surpluses, this year revenues look more ‘typical.’ Utah is constitutionally bound to end the session with a budget balanced to available revenue. As such, this year legislators face the once familiar challenge of living within Utah’s means.
By legislative rule, RFAs are due the 11th day of the General Session at 12pm (next Friday, January 26th, 2024). Appropriations subcommittees will hear requests during their meetings over the next three weeks before presenting EAC with a prioritized list to consider. For more information on Requests for Appropriation, check out this post from last session: The ABCs of RFAs.
As of publication, there have been 89 RFAs assigned to a committee for a total ask of $160.6 million one-time and $50 million ongoing.
The reports referenced in this post are available at the following links:
January Revenue Snapshot (FY 24)
Tax Commission Revenue Summary (Period 6, FY 2024)
Revenue Publications Archive
Requests for Appropriations by Legislator