2011 legislative preview.

• Author: Stewart, Heather

The 59th general session of the Utah State Legislature is about to commence. And with several hot-button issues simmering--and a budget to balance--the session will usher in weeks of scripted floor debates, dull-as-dirt committee meetings, impassioned public testimony and grandstanding before television cameras.

Within all of this activity, legislators will tackle tough problems, like funding the growing demands on Medicaid, and take on deep philosophical challenges, like the balance of power between states and the federal government.

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The business community will be watching the session with an eye to preserving Utah's status as the "Best State for Business" (according to Forbes). How can we improve and fully fund our public education system? Can we tackle the thorny issues around immigration reform without damaging our fragile economy? And just as important are the nuts and bolts of our economy, like taxes, transportation and vital human services.

The Bottom Line

Nailing down the budget is by far the top priority of the Legislature. Last year, in the face of declining state revenues, the Legislature relied on a significant amount of "one-time" funding in several areas to avoid severe budget cuts. This means that legislators must examine those budget items again this year and find sources of revenue to keep them funded.

While the Governor's Office is projecting a healthy growth in state revenues for this year, with additional revenue of $215.6 million, that money will be sucked up almost immediately by the need to replace one-time funding--pulled mostly from the state's rainy-day fund--with ongoing funding.

"The budget that we put together [last year] had a structural imbalance of over $300 million, so we'd like to work on getting that back in," says Senate President Michael Waddoups. "Without that, we'll probably devastate the rainy-day fund. It's gone from nearly $500 million down to just over $200 million."

The rainy-day fund will almost surely be tapped again this year, but Waddoups is hoping to preserve at least $100 million in the fund. Gov. Gary R. Herbert's budget recommendation is to replace one-time funding with about $100 million in ongoing funds and to retain $110 million in the rainy-day fund.

Herbert's budget recommendations have already sparked controversy, however, as the governor has proposed requiring businesses to file their state taxes quarterly, rather than once each year. While this does not technically change the amount businesses will pay, it does force them to pay it several months sooner, creating a one-time cash windfall for the state.

Republicans in the Legislature have already vowed to block this proposal and instead slash government budgets to make up the difference of a projected $130 million.

Elementary Math

Education is the biggest budget item for the state, and with enrollment continually growing, keeping education fully funded is a constant challenge.

"Last year, the Legislature was able to find a way to fund education at the same dollar amount that they had the year before. The...