Utah 2012-2013 Appropriations Report
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OFFICE OF THE LEGISLATIVE FISCAL ANALYST JONATHAN C. BALL DIRECTOR 2012-2013 APPROPRIATIONS REPORT UTAH STATE LEGISLATURE 2012 GENERAL SESSION JUNE 2012 SPECIAL SESSION SENATOR LYLE W. HILLYARD REPRESENTATIVE MELVIN R. BROWN CO-CHAIRS EXECUTIVE APPROPRIATIONS COMMITTEE LFA L EGISLATIVE FISCAL ANAL YS T JUNE 2012 Foreword This report is submitted in compliance with Utah Code Annotated 36‐12‐13(2)(j), which requires the Legislative Fiscal Analyst “to prepare, after each session of the Legislature, a summary showing the effect of the final legislative program on the financial condition of the state.” Detailed information on individual state programs is available in the Compendium of Budget Information (COBI) for each appropriations subcommittee. COBIs can be accessed on the internet at le.utah.gov. 2012‐2013 APPROPRIATIONS REPORT Utah State Legislature 2012 General Session June 2012 Special Session Senator Lyle W. Hillyard Representative Melvin R. Brown Co‐chairs, Executive Appropriations Committee Office of the Legislative Fiscal Analyst Jonathan C. Ball Legislative Fiscal Analyst Table of Contents Statewide Summary........................................................................................................................................................... 1 Business, Economic Development, and Labor ................................................................................................................. 27 Executive Offices and Criminal Justice ............................................................................................................................. 65 Higher Education ........................................................................................................................................................... 103 Infrastructure and General Government ....................................................................................................................... 135 Natural Resources, Agriculture, and Environmental Quality ......................................................................................... 167 Public Education ............................................................................................................................................................ 201 Social Services ................................................................................................................................................................ 227 Retirement and Independent Entities ........................................................................................................................... 265 Executive Appropriations .............................................................................................................................................. 279 Glossary ......................................................................................................................................................................... 295 Statewide Summary Executive Appropriations Senators Representatives Lyle Hillyard, Co-Chair Melvin Brown, Co-Chair Kevin Van Tassell, Vice- John Dougall, Vice-Chair Chair Rebecca Lockhart Michael Waddoups Brad Dee Scott Jenkins Gregory Hughes Patricia Jones Brian King Peter Knudson David Litvack Benjamin McAdams Ronda Menlove Karen Morgan Jennifer Seelig Wayne Niederhauser Christine Watkins Ross Romero Staff Jonathan Ball Steven Allred Mark Bleazard FY 2012 - 2013 Appropriations Report Statewide Summary STATEWIDE SUMMARY Utah’s total budget from all sources is $12.81 billion in FY 2012 and $12.98 billion in FY 2013 – up 2.2 percent in FY 2012 and another 1.3 percent in FY 2013. Rising revenue projections supported discretionary General and Education funds budgets of $4.86 billion in FY 2012 and $5.14 billion in FY 2013. Ongoing base budgets from the General and Education funds, net of one‐time investments, increased by $256 million (5.4 percent) from FY 2012 to FY 2013. REVENUE Utah employs a consensus revenue forecasting process. Economists and budget analysts from the Executive and Legislative branches of government work with experts from the private sector and academia to develop common assumptions used for forecasting. The Governor’s Office of Planning and Budget and Legislative Fiscal Analyst then agree upon estimated revenue. The State’s main revenue sources are the sales tax A small surplus from FY 2011, a six percent increase in supported General Fund and the income tax based ongoing revenue estimates, and balances identified in Education Fund. Other major sources are federal a June Special Session afforded legislators around $471 funds, the gas tax driven Transportation Fund, million in new ongoing and one‐time discretionary dedicated credits (fee for service revenue), local sources. Public and higher education received the revenue for education, and bond proceeds. Figure 3 largest slice of new money – 43 percent. Social shows how these sources make‐up total services, driven largely by increased Medicaid costs, appropriations. were next in line at 32 percent. Increased cash for building maintenance and construction combined with rainy day fund deposits accounted for nine percent of new General and Education funds. Additional highway patrol troopers and payment of lawsuit settlements, among other law enforcement initiatives, took another nine percent of the new funds. Figure 2 shows how legislators allocated new discretionary resources (General and Education funds). Budget details by subcommittee are included in the following chapters. Tables showing statewide revenue and appropriations detail begin on page 6. Office of the Legislative Fiscal Analyst 3 FY 2012 - 2013 Appropriations Report Statewide Summary For FY 2013, the Legislature adopted consensus Figure 5 graphically displays the allocation of total ongoing General and Education Fund revenue funding among areas of expenditure. Figure 6 shows estimates of $4.97 billion. This represents a 6.1 the same but for only General and Education Funds. percent increase from the original FY 2012 estimate of Detailed presentations of these figures can be found in $4.69 billion and a 4.2 percent increase from the Tables 1 through 6 at the end of this chapter. state’s revised FY 2012 target of $4.77 billion. One‐time funding sources and legislation approved during the 2012 General Session modify the consensus forecast. The total of all sources – including beginning balances, one‐time funds, and legislative changes – is expected to be $4.97 billion for FY 2012. For FY 2013 it will be $5.15 billion. See Tables 7 through 11 at the end of this chapter for more detail on revenue. Table 8 provides specifics about legislative changes impacting revenue, while Table 9 shows one‐time sources used to balance the budget. APPROPRIATIONS The Legislature approved $13.28 billion in appropriations from all sources for FY 2013. Adjusting for account deposits, loan funds, and certain enterprise funds, Utah’s operating and capital budget for FY 2013 is $12.98 billion. See Tables 1 and 2 for more detail. Of the total FY 2013 amount, legislators appropriated $5.14 billion from the General Fund and Education Fund, an increase of 5.9 percent over the revised FY 2012 budget. In addition to the $5.14 billion, appropriators deposited $11 million into the state’s STRUCTURAL BALANCE rainy day funds. The $11 million is on top of a net $23 Coming into the 2012 General Session, before million Rainy Day Fund increase for FY 2011. accounting for growth in either cost or revenue, legislators faced a $52 million shortfall. They did so Figure 4 because last year they used stop‐gap revenue sources Rainy Day Fund Status like rainy day funds to pay for ongoing costs. The first $500 $52 million in revenue growth went to eliminate this $450 $400 structural imbalance. $350 $300 Millions $250 $235 $230 At the close of the 2012 General Session, Utah had a $200 $143 $123 $194 $115 $150 $41 $171 $189 $105 $110 slight structural surplus. Legislators were careful to $100 $13 $132 $123 $128 $50 $1 $106 $105 match ongoing commitments with available ongoing $53 $0 $26 revenue. However, soon after General Session, the 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fiscal Year State Office of Education identified a calculation error General Education it made in determining the number of weighted pupil units to use in calculating student growth costs. The 4 Office of the Legislative Fiscal Analyst FY 2012 - 2013 Appropriations Report Statewide Summary error led to a Special Session in June, 2012 during H.B. 365, “Revisions to Tax,” changes the research and which lawmakers used one‐time sources to cover an development income tax credit from 9.2 percent to 7.5 additional $25.3 million in ongoing appropriations for percent and enacts sales tax exemptions for public education. As a result, they will face a $25 construction material and certain equipment used in million structural deficit going into the 2014 fiscal year. life science research and development facilities, reducing overall tax liability by $200,000 in FY 2013 EMPLOYEE COMPENSATION and $600,000 in FY 2014. Legislators provided appropriations for employee salaries and benefit costs as follows: H.B. 384, “Sales and Use Tax Seller Nexus Amendments,” addresses the types of sellers who are State Employees: $11.8 million ($6.1 million GF/EF) required to pay or remit sales taxes, which increases for the equivalent of a 1 percent salary increase; $17.9 tax liability by $5.6 million in FY 2013 and $5.8 million million ($10.3 million GF/EF) for