SALT LAKE CITY — Governor Gary Herbert is set to reveal his budget recommendations for the 2013-2014 fiscal year Wednesday afternoon and intends to emphasize funding for education. But the looming federal "fiscal cliff" could impact his budget plans.
According to Utahpolicy.com, the "fiscal cliff" could result in a $500-million loss in state revenues, creating big budget problems for Gov. Herbert and the 2013 Legislature.
And according to Senate Budget Chairman Lyle Hillyard, R-Logan, if the federal government can't produce a solution to keep the U.S. from the "fiscal cliff," it could mean a 5 percent budget cut across the board for federal programs in Utah. That would mean a cut to military bases, national parks, health care and more.
Currently, Utah is expected to take in an extra $300 million in tax revenue for fiscal 2013-2014.
The state also expects to gain an estimated $15 million in one-time capital gains tax. But a lot of that would be lost if federal taxes go up and federal programs take a cut.
Additionally, the state expects another $284-million increase to state expenses for things like education for the growing population of Utah's students.
When Gov. Herbert releases his budget Wednesday, there will be a big emphasis on funding education. The governor would like to see 66 percent of Utah adults achieve a certificate or degree by 2020.
"Education is my #1 budget priority," Governor Herbert said. "That's not going to change. The priorities don't change if there's a little bit of money or a lot of money to spend."
The governor says revenues have rebounded to near pre-recession levels, but uncertainty over the federal budget, and the fiscal cliff, is like a cloud on the horizon.
No matter what the base budget is, if the U.S. does go off the "fiscal cliff," Utah legislators may have to adjust funding to certain programs, or try to dip into the rainy day fund.
The General Session starts Jan. 28.