Too Blessed to be Stressed, Pt. 2: 2023 Updates to Budget Contingencies

March 31, 2023

Last December, Legislative economists presented their findings from the 2022 Budget Stress Testing exercise to the Executive Appropriations Committee in a report jointly prepared with the Governor’s Office. Stress testing is one part of the long-term fiscal sustainability analysis required under UAC 36-12-13. In a three-year cycle, the Office of the Legislative Fiscal Analyst is required to prepare a revenue volatility report (forthcoming in 2023), long-term budgeting (2024), and budget stress testing (2022 and 2025).

As summarized in this post from December, Utah’s “easy to access” and “moderately-easy to access” budget buffers would be enough to cover reductions in revenue in the event of a severe recession for up to five years. The purpose of this update is to summarize additional contingencies that were appropriated during the 2023 General Session that would fall under the easy and moderately-easy to access categories of budget reserves. These budget buffers represent Utah’s Working Rainy Day Funds, one lever in Utah’s Fiscal Tool Kit. Working Rainy Day Funds are cash-funded infrastructure projects that can be replaced with debt financing in the case of a recession. For instance: if the Legislature appropriates $50 million ongoing for highway development, in the case of a financial crisis this project expense could instead be paid for through bonding, and most of the ongoing funding would be available for more urgent needs.

During the 2023 General Session, the following items considered additional budget contingencies were appropriated by the legislature:

Easy to Access

  • Cash-funded Buildings
    • — $571.1 million one-time for 28 projects for state agencies and higher education entities
    • — $108 million one-time for the Point of the Mountain State Land Authority
    • — $125 million one-time for the State Building Infrastructure Fund
  • Cash-funded Transportation
    • — $45 million ongoing for Active Transportation Statewide Trails Network
    • — $200 million one-time for commuter rail improvements
    • —$100 million one-time for Cottonwood Canyons transportation
    • — $800 million one-time for various transportation enhancements
  • Cash-Funded Water
    • — $170 million one-time for Ag. Water Optimization
    • — $50 million one-time for aqueduct seismic upgrades
    • — $30 million one-time for a local match program for water infrastructure needs
    • — $13.1 million one-time for the Graveyard Wash Reuse Reservoir
  • Medicaid Expansion Fund
    • — $59 million ongoing for authorized uses under UCA 26-36b-208
  • Capital Improvements
    • — $18.5 million ongoing to increase the capital improvements rate set aside from .9% to 1.5% of asset value
  • Debt Service
    • — $440 million one-time and $335 million ongoing to accelerate bonding payments

Moderately Easy to Access

  • State Infrastructure Banks
    • — $10 million one-time for the Utah Inland Port Authority
  • Public Education Economic Stabilization Account
    • — $193 million ongoing for public education including enrollment growth in the case of insufficient revenues in the Income Tax Fund

These changes in working budgetary reserves from December through the end of the 2023 General Session are summarized in the table below:

Ease of AccessibilityFive-Year Total (Dec. 2022)Five-Year Total (March 2023)
Easy to Access$2,722,200,000$4,386,200,000
Moderately Easy to Access$2,670,600,000$3,159,700,000
Somewhat Difficult to Access$2,545,000,000$5,321,300,000
Difficult to Access$1,276,500,000$1,276,500,000

In light of recent and ongoing economic uncertainty, these working rainy day funds and regularly updated analyses provide lawmakers and Utah residents with the security of knowing that the State is prepared to weather the next storm.