Neatly summarizing the just-concluded 2016 session of the Utah Legislature is nearly as challenging as the 45-day crucible itself. Collectively, thousands of hours have been spent hearing, sifting, debating and refining hundreds of bills to create new law and determine how best to spend taxpayer monies. As with all legislative endeavors, funding requests easily swamped available dollars and the greatest challenge was finding a balance that will serve well the residents of our state.
Perhaps leading the win column is the resolution of a number of issues surrounding justice reinvestment, homelessness and Medicaid expansion. After months of discussion and negotiation, both the House and Senate have agreed upon a new, uniquely Utah solution to address all of these difficult issues in a more streamlined manner that better utilizes resources, and allows the state to budget according to funds. Many business, community and advocacy groups are supportive of this legislation.
Funding for Utah’s school children and college students once more dominates the $14.5 billion budget for 2016. The total increase for both higher and public education is over $445 million – over $20 million more than originally sought by the governor.
The legislature is appropriating $94 million to accommodate growth for a projected 9,700 new public school students this fall, as well as a nearly $74 million expenditure representing a 3% increase to the Weighted Pupil Unit, (WPU). Monies headed to public education also include $20.4 million in ongoing funding for Charter School equalization and $15 million, $10 million of that ongoing, targeted to improve technology in our schools.
Construction on Utah’s college and university campuses is another big-ticket budgetary item, including more than $113 million approved for new buildings at Utah State and Utah Valley Universities and the West Point campus of Salt Lake Community College.
Medicaid / Homelessness / JRI
Homelessness, justice reform and Medicaid were all addressed this year in a comprehensive fashion that will allow the state to do more for those struggling with addiction and mental health issues, while also reforming our justice system. The Medicaid expansion by House Majority Leader Jim Dunnigan, HB437, will provide a program of coverage through an expansion of traditional Medicaid that will preserve services and benefits to the core group of 300,000 current Medicaid recipients, including children and disabled adults.
Newly-covered populations will include the chronically homeless, individuals involved in the justice system and those in need of substance abuse and mental health treatment. A new data system will also be implemented to allow the state to align programs and track and share data to more efficiently use resources.
The 2016 budget also fully funds consensus Medicaid growth estimates of over $40 million.
Drug Fraud Prevention / Treatment Center Reform
As the need for substance abuse and mental health treatment escalates, it is incumbent upon the state to ensure that limited dollars are being used appropriately and those seeking help are actually receiving it.
The work of Rep. Eric Hutchings, House sponsor of SB123 and HB259, will go a long way in helping to detect and weed out fraud and abuse surrounding these types of facilities. Those seeking services, as well as those paying for services, will have greater assurance that suitable treatments are being administered, and in an appropriate manner.
State Employee Compensation
Continuing to recognize the importance of the state’s highly trained work force, lawmakers approved a 2 percent raise for state employees with an additional 1 percent designated to cover health insurance increases.
Water / Infrastructure
The Legislature took action this year to look ahead and plan for future needs by passing House sponsor Rep. Lee Perry’s SB80. It provides appropriations from the Transportation Fund to be deposited into the Transportation Investment Fund and the Water Infrastructure Restricted Account to pay for future water needs. According to UDOT no currently programmed projects will be impacted, and current funding for the Transportation Fund will be maintained.
Rep. Timothy Hawkes was the House sponsor of SB251, which funds the establishment of criteria for better water data and reporting to allow for the creation of new water conservation targets. As our desert state continues to expand, along with our water needs, we must prepare for the future as we look for solutions that allow us to sustain our present trajectory of growth and prosperity.
House Budgetary Overseers Release Proposals – March 5, 2016
Of the many duties making up each legislative session, nothing is more important than producing a balanced budget. Collectively, thousands of hours have been spent hearing, sifting, debating and refining hundreds of funding requests to determine how to most responsibly spend taxpayer monies.
As is the case every year, higher and public education funding needs dominate Utah’s $14.5 billion budget for 2016. The total funding package for both higher and public education is more than $440 million – $18 million more than originally recommended by the governor.
Other educational funding highlights include:
$94 million appropriated to public education for growth to fund an estimated 9,700 new students this fall;
3% increase (nearly $74 million) in Weighted Pupil Unit (WPU);
$20.4 million in ongoing funding for equalization; and
$15 million to improve technology in the schools.
Higher education is also front and center in the 2016 budget, receiving $23.8 million for compensation increases for instructors. This money is meant to help offset potential tuition increases based on recommendations from the various public universities and colleges across the state.
Campus building construction is another big-ticket item in the 2016 Utah budget, featuring:
$41.5 million for a Technology Education Center at Salt Lake Community College’s West Point campus;
$39 million commitment for a new biological sciences building at Utah State University; and
$33 million commitment for a new performing arts building at Utah Valley University.
Additional budget highlights:
After seeking a solution for several sessions, legislators are setting aside $17.5 million to fund Medicaid expansion for Utah’s poorest residents – the chronically homeless, those involved in the justice system and individuals suffering from mental health or substance abuse problems. The budget also fully funds consensus Medicaid growth estimates.
State employees will receive a 2% salary increase and 1% health insurance cost increase.
Three million dollars dedicated to the creation of an action center for Science, Technology, Engineering and Math (STEM) in education. This initiative is aimed at stimulating economic development throughout the state and keeping Utah economically competitive in the world’s job market.
Three quick reminders:
These are not the final numbers; those will be approved sometime next week.
Utah is constitutionally mandated to balance its budget.
The Executive Appropriations Committee puts together a final budget, but the Legislature still must approve it.
China’s Liaoning Province delegation visited the Capitol Thursday, February 25.
Utah Legislature adopted concurrent resolution SCR17, sponsored by House Speaker Greg Hughes and Senate PresidentWayne Neiderhauser, that celebrates and renews the state’s unique 10-year state-to-province relationship with its Chinese counterpart. The resolution was signed by Speaker Greg Hughes, President Wayne Neiderhauser and Governor Gary Herbert during a ceremony in the Gold Room.
A major purpose of the Liaoning delegation’s visit is to investigate new business, trade, educational and cultural opportunities and partnerships with Utah.
“In recent years, China has emerged as an economic powerhouse and has strongly signaled that it has no intentions of relinquishing this new role,” explained House Speaker Greg Hughes. “Many Utahns will benefit from the deepening partnership between Utah and Liaoning Province in tourism, trade, science and education that fostered by this visit.”
H.B. 251 Post-employment Restrictions Amendments passed the the House 72-0 on Wednesday, February 24, 2016. This bills honors commitments written into our Utah State Constitution: “It is the policy of the state of Utah that a free market system shall govern trade and commerce …” Furthermore, “[e]ach contract … in restraint of trade or commerce is prohibited.” Article XII, Section 20.
Research has shown that areas that limit or prohibit non-competes generate more patents, attract more talent and entrepreneurs (leading to more start-ups), and experience faster growth and more high-income jobs. Intel, Hewlett-Packard and Google all represent companies that would not exist if non-compete agreements had been enforced.
Restricting non-compete agreements will make Utah more attractive to entrepreneurs and highly-skilled workers, leading to more start-ups and higher income levels. H.B. 251 strikes the right balance between the rights of employers and employees by allowing for legitimate business contracts to continue while prohibiting anti-competitive practices.
H.B. 251 Post-Employment Restrictions Amendments has been sent to the Senate for consideration.
SALT LAKE CITY (Feb. 22, 2016) – Utah’s consensus revenue numbers were released today in cooperation with leaders from the Senate, House of Representatives and the Governor’s Office of Management and Budget.
After making adjustments related to increased income tax, lower severance tax and other revenue adjustments, the new consensus estimates provide $400 million for additional ongoing appropriations, $20 million higher than the December estimates. In addition, $150 million is available for one-time appropriations, $30 million lower than December estimates.
“The revised revenue numbers released today show overall growth in income throughout the state with the exception of declining prices, primarily in the energy sector,” Gov. Herbert said. “Utah’s continued commitment to fiscal conservatism positions us well as we make critical budget decisions in the weeks ahead.”
Senate President Wayne Niederhauser said, “These numbers are the final target to which we will balance the budget over the next few weeks. They are optimistic but conservative – we expect that Utah’s economy will continue to grow as we work to manage our revenues and expenditures judiciously. A reliable state budget always hinges on a reasonable, conservative budget forecast.”
“The Utah Legislature has some of the best fiscal analysts of any state in the country,” said Speaker Greg Hughes. “We do estimates in December and February to closely monitor the changes in the economy and our analysts respond accordingly. These combined revenue estimates have remained largely unchanged and give us the framework for completing our budget process.”
Utah’s combined General Fund and Education Fund revenue estimates remain largely unchanged from December, the combined effect of healthy increases in individual income taxes, reductions in oil and gas-related taxes, and an abundance of caution concerning the direction of markets. State economists tend to take a cautious approach to revenue estimating, an approach that has served the state well in the past. Even given this approach, economists expect revenue will increase 4.5% year-over-year in the coming year.
State economists project economic growth will be stronger than expected in the fiscal year that begins July 1 (FY 2017), increasing ongoing revenue estimates by $20 million. This increased estimate is driven primarily by healthy increases in household incomes. The State is estimated to $400 million in new ongoing revenue to allocate this General Session. Of this total, $350 million is in the Education Fund and $50 million is in the General Fund.
Largely due to the effect of low oil and gas prices and caution related to global economic conditions, one-time FY 2016 collections are now expected to be $30 million (-0.5%) less than previously estimated in December. Even after that adjustment, Utah is estimated to have $150 million more in collections for FY 2016.