Senate advances SB 117 after debate over accounting change and 60% borrowing cap

Senate Bill 117, which would require governmental accounting changes for internal service funds and cap future borrowing by those funds, was discussed on the floor and advanced to the third‑reading calendar.

Sponsor Senator McAllister told senators the bill implements governmental accounting principles to recognize revenues when earned and expenditures when incurred. He said switching methods will adjust the state balance sheet, estimating an adjustment in the tens of millions: "there's approximately $50,000,000 ... that will be adjusted on the Utah balance sheet because of going to this different method of accounting." McAllister emphasized the bill includes a restriction that future borrowing by internal service funds be limited to 60% of the net book value of equipment and said the measure is intended to add financial control over acquisition of fixed assets.

Opponents raised concerns that reporting those amounts on the balance sheet could create political pressure to spend what appears to be available equity. Senator Hilliard argued that showing sizable accounting‑recognized balances could induce special‑interest claims on those funds, and urged caution. Senators asked whether the change would allow departments to exceed appropriated budgets; sponsors and proponents explained the bill affects accounting recognition and would not change appropriation limits or cash flow until GASB (the governmental accounting standards board) implements the relevant standard.

Supporters noted a less‑painful alternative (a $19 million direct appropriation to cover shortfalls) was discussed in committee but deemed worse than the proposed accounting adjustment. After discussion and questions, the Senate called the question and the clerk recorded the floor result as "SB 117 shows 23 ayes, 1 nay, 5 absent," placing the bill on the third reading calendar.