News
Utah surplus grows by $26 million
State appears to be $62 million richer now than in January
Utah’s economy is picking up steam, a new state Tax Commission report shows.
By Bob Bernick Jr.
Deseret News political editor
But commission chief economist Doug Macdonald says state leaders shouldn’t breathe a sigh of relief yet.
"We can’t say the economy has turned the corner with war (with Iraq) still hanging over us," Macdonald said Friday after releasing the commission’s monthly TC23 tax revenue update.
The new report says state government is running a $26 million surplus for the current fiscal year, which ends June 30, above the $36 million in new revenue estimates adopted by legislators last month. That means the state is $62 million richer than it was in January.
While the state’s tax take is just one measure of Utah’s economy, tax revenue does fluctuate with economic activity and is therefore a good indicator of economic health.
Running a tax surplus is a welcome change to a deficit, which lawmakers saw for around 18 months as they had to make up a cumulative $700 million revenue shortfall over two fiscal years.
However, it’s not time to celebrate yet, warns Macdonald.
The new report says while some taxes are up, others are down, indicating a still-rocky economic recovery.
The cigarette tax is down 29 percent from estimates. Lawmakers increased the cigarette tax last year.
"The motor fuel tax is down 11.6 percent, worse than expected," said Macdonald.
The wine and liquor take is down 9 percent. And the beer tax is down a gulping 21 percent. Both wine, liquor and beer tax revenue for February 2003 were expected to drop over February 2002 because tax officials saw a marked increase in spirit sales during the 2002 Olympics.
One of the only bright tax spots in the new report is sales tax, up 3.1 percent. However, 2 percent of the increase comes because of internal water fund transfers, Macdonald said.
Corporate income tax brought in $9 million more than expected, individual income taxes up $12 million and sales tax also up $12 million.
New revenue estimates spared legislators from having to trim another 2 percent from state budgets a month ago. Instead, when the extra $36 million was reported the money quickly spent on a number of needy state programs through a supplemental appropriation.
Legislators may get a shot at spending new extra revenue when the fiscal year ends June 30.
Gov. Mike Leavitt says he may call a special session in the next several months on the $50 million proposal to sell the state’s interest in the Workers Compensation Fund, if officials get a better assessment on the value of the state’s interest.
MATR Supporters (view all)
Sorry, we couldn't find any posts. Please try a different search.