This year, the Utah Legislature passed its largest budget ever, topping $13 billion. This money is appropriated for education, transportation, public safety, healthcare, etc. The majority of this money comes from income taxes (which goes solely to education), sales taxes and user fees. But, according to the Tax Foundation, 31.6% comes from money sent to the state from the federal government. The map below shows that Utah ranks 39th in the country for federal aid.
There is a minor conflict between the numbers that the Tax Foundation uses and what the State of Utah’s budget shows. As you can see in the nearby chart, Utah’s budget includes $4.7 billion from the federal government. As a percentage of the total state budget, that percent is more accurately stated as 35%.
As you can see in the nearby chart Utah spends its lion share of federal money through the Department of Health and the Department of environmental quality. Education in Utah also receives a significant amount of money from the federal government. In fact, over $500 million of the public education fund is from federal money and almost $750 million dollars of the higher education expenditures in Utah are from the Federal government. One thing that is important to note however is that there is nearly $2 billion that is not accounted for in the Utah State budget. This $2 billion comes in the form of student loans, academic research, and other grants to Utah’s university system.
Source: Utah State Auditor Report No. 12-40
Should Utahns be worried that such a large portion of its budget comes from the federal government? Utah is being proactive on this front and attempting to answer this question. In fact, just this month the legislature convened the inaugural Commission on Federalism to study how Utah can maintain the proper balance in governance with the federal government. The first witness that addressed the Commission, made up of members of the Utah Senate and the Utah House of Representatives, was Congressman Rob Bishop. During his testimony, Congressman Bishop pointed out that when you accept federal money you must comply with federal requirements, or in other words when you accept federal money there are strings attached. Recognizing this is critical for Utah legislators to be cautious when considering the expansion of programs that are encouraged and incentivized by additional federal money. Such is the case with the expansion of Medicaid, where the costs are unclear. As the first article in this edition of the Utah Taxpayer argues, cutting benefits and raising taxes are not palatable, but given the federal governments track record, it’s not likely to follow through on its promises.
Source: Tax Foundation