The Soil: Base Budgets
Every successful harvest begins with the quality of the soil. In Utah, that “soil” is the base budget; the essential, ongoing funding that keeps state services rooted and resilient. Last year’s 4.8% revenue growth allowed the state to weather the impact of recent federal tax changes (H.R. 1/OBBA), which reduced income tax liability for Utah taxpayers by over $500 million.
Base budgets for the current budget cycle added $275 million in new funding. Increases included roughly $225 million towards Public Education, amounting to a 4.2% bump in the Weighted Pupil Unit (WPU), the primary nutrient for classrooms.
Considering these two large investments, the Executive Appropriations Committee (EAC) directed subcommittees in December to recommend 5% in ongoing reductions to their state fund budgets.
The Seed Catalog: Subcommittee Priority Lists
During the first three weeks of the General Session, the eight appropriations subcommittees acted as master gardeners, reviewing hundreds of seedlings, in the form of requests for new funding from both agencies and legislators. The culmination of their hard work is included in their recommendations to EAC which are linked below:
- Criminal Justice
- Economic and Community Development
- Higher Education
- General Government
- Natural Resources, Agriculture, and Environmental Quality
- Transportation and Infrastructure
- Public Education
- Social Services
The Weather Forecast: February Revenue Estimates
Like any garden, the budget is dictated by the forecast. The February Revenue Estimates arrived on Friday, offering a mostly sunny outlook:
- Estimates identified $125 million in new one-time funds, largely driven by a $99 million surge in the Income Tax Fund.
- An additional $88 million in ongoing revenue was forecasted, with the General Fund contributing $50 million.
Overall, revenue is expected to reach $11.99 billion for FY 2027, a healthy 3.67% increase even after accounting for the ongoing impacts of federal tax reconciliation.
Pruning and Thinning: The Executive Appropriations Committee
While every seed has potential, in a world of limited resources, not every plant can make it to harvest. EAC now begins the vital work of identifying which requests are best suited to the current fiscal climate.
While the February forecast projects modest growth, revenues may be less robust than policymakers had hoped for. Consequently, it is likely that most of the recommended ongoing state fund reductions identified by subcommittees will be adopted. This budgetary pruning assists with operational efficiency and provides an opportunity for state tax cuts.
The Harvest: Appropriations Bills
As the General Session approaches its conclusion on March 6th, the final produce is gathered into Appropriations Bills. A facet of the harvest is the “Bill of Bills,” which bundles all the funding for legislation and final budgetary tweaks into a single, balanced bounty to be considered by the legislature prior to adjournment.