Utah Senate hears revenue update, faces $171 million shortfall for 2009

Senator Hilliard told the Utah Senate that updated revenue estimates show a $171 million shortfall in the fiscal 2009 budget and an additional ongoing shortfall of roughly $320 million for 2010. "We now face a deficit in the 02/2009 budget of 171,000,000," he said after distributing the revenue worksheets to senators and apologizing for an earlier brief public posting of the estimates.

Hilliard said December receipts were worse than expected earlier in the session but that recent collections had improved, reducing previously feared declines. He outlined policy options: uniform cuts (roughly 3.5 percent), choosing not to backfill some previously restored amounts, or seeking other funds to fill gaps. He cautioned against tapping the full rainy-day fund, calling it necessary insurance for next year.

The senator also flagged programmatic sensitivities, saying that changes to Medicaid eligibility or funding could create "maintenance of effort" problems and complicate federal matching dollars. He said some federal stimulus and other temporary spending could ease pressures but cautioned that strings on federal money would require careful review. "Part of the thing we need to factor in... is the stimulus package with its tax cuts will also cost the state of Utah some money," Hilliard said.

Several senators requested more detailed breakdowns comparing February to December figures and isolating one-time versus ongoing revenues; Hilliard and staff said they would provide further detail offline and in caucus handouts. The senator said staff work and coordination with the governor’s office were ongoing as lawmakers consider a mix of cuts, backfills and identified funding sources.

Next steps: caucus review of the handouts and continued staff analysis; no formal budget decisions were made on the floor during the session.