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House passes change to Utah’s budget reserve structure to add school fund cap
Summary
House Bill 27 passed unanimously (75–0) to restructure the state budget reserve by combining the general fund and uniform school fund into a combined 6% cap, increasing the theoretical maximum reserve from about $273 million to $324 million and setting revised surplus-transfer rules.
The Utah House passed House Bill 27 on Jan. 28 to change how the state’s budget reserve, or "rainy day" accounts, are calculated and capped.
Representative Craig Butters, sponsor of the measure, explained the bill shifts from an 8% cap on the general fund to a combined cap of 6% on the general and uniform school funds, which increases the theoretical combined maximum from $273 million to $324 million. He said the change allows for an education-specific reserve that cannot be transferred back to the general fund while preserving the overall fiscal discipline of a 6% cap across both accounts.
Butters framed the bill as a tool to protect the state’s credit rating and to provide a buffer against midyear budget cuts. He noted historical context and past cap changes and said the bill was recommended by the state treasurer and supported by the Government Operations Interim Committee.
Members asked technical questions about whether one account could end up holding the full 6% and how transfers would operate; Butters confirmed that in theory one fund could hold the combined cap depending on surpluses. The House approved the bill by a recorded vote of 75 yes and 0 no. The bill will be referred to the Senate for further consideration.
