As Utah legislators approach the 2023 Legislative Session that will begin on January 18th, the pile of money the state of Utah has in surplus continues to swell and they will need to decide what to do with it.
As the Taxpayers Association predicted previously, the surplus has crested over the $3 billion mark and sits now at $3.331 billion. At the November Executive Appropriations Committee meeting, the Utah Department of Government Operations presented the State of Utah Financial Highlights as of the end of fiscal year 2022 that ended on June 30, 2022.
This report highlights the various parts of the budget that are now piling up. Specifically, there are 4 factors in the mix:
- The surplus from the previous fiscal year 2022, which is $1,365,750,000.
- The budgeted reserves for fiscal year 2023, which is $1,965,535,000 (the 2022 legislative session appropriated FY 2023 money, and this is the amount that was not spent relative to what the predicted final revenue will come in at the end of FY 2023 in June of 2023).
- These combined amounts total the $3,331,285,000 that could fairly be termed as “available revenue” the legislature could use for tax relief.
- In addition to all this, the Executive Appropriations Committee set a target of $9,721,741,000 for fiscal year 2023. That would be a big drop from the previous year, however we are now almost six months into FY 2023 and the economy has not shown many signs of slowing down in a significant way. Therefore, with every day that passes without major economic shocks, the surplus should continue to grow.
Consequently, estimates for the upcoming fiscal years 2023 and 2024 need to be reconsidered. That is why the recent revenue snapshot summary from the state contained the statement, “State economists are in the process of re-estimating revenue for FY 2023 and FY 2024”.
This should be released in early December and will provide a fresh look at where things stand. A very large boost in education funding will happen automatically due to recent legislation and there will be large amounts of revenue available even after that. Regardless, there will be ample room for Utah taxpayers to see significant tax relief by lowering the income tax rate to 4.5%.