SALT LAKE CITY (AP) — As the state Legislature and Gov. Gary Herbert are set to unveil their updated 2014 budget forecast Monday, statehouse leaders say Utah's finances are strong but looming federal spending cuts could leave them with deep holes to fill.
The possible $85 billion in federal spending cuts will be triggered next month unless leaders in Congress and the White House are able to come to an agreement on a budget standoff. If the March 1 deadline passes, state agencies and programs that depend on federal dollars could be hurting.
"I'm fairly confident from everything I'm hearing that it's going to occur," Sen. Lyle Hillyard, the Utah Senate's budget chairman said Friday. "I'm also fairly confident it's not going to be nearly as draconian as everybody's saying as they're getting ready for it."
The Logan Republican said the cuts will be small when compared to the overall levels of current federal spending and federal debt, but it will have an impact on Utah.
"We just don't have enough state money to fill in all the holes that will be created," he said.
The most recent calculations from legislative analysts show Utah may lose $39 million in federal dollars if those cuts take place, particularly in education, health and human services and transportation-related programs.
We just don't have enough state money to fill in all the holes that will be created.
–Sen. Lyle Hillyard
The real numbers and their effect won't really be known until it happens, and the Legislature will likely no longer be in session by the time those cuts are felt, Hillyard said.
"We don't really know," he said. "We're just going to do our budget."
Hillyard anticipates Utah's updated 2014 budget forecast will be positive and there will be some surplus as lawmakers begin to craft their budget around those numbers.
Two of the biggest challenges will be finding room in the roughly $13 billion state budget to pay for swelling costs associated with increased enrollment in public schools and climbing costs for health and human services programs, some of which are a result of the federal health care law, Hillyard said.
Sen. Karen Mayne, a Democrat from West Valley City, said lawmakers in her party are most concerned about funding education.
"Whatever moneys we have, we hope that goes to education because we have such a need there," she said.
Funding priorities for Democrats also include Medicaid and transportation, particularly road upgrades, Mayne said.
During a news conference Thursday, Herbert said the budget "is the No. 1 issue on everybody's mind."
"We're doing well. Our economy is growing. It's solid," he said. "But sequestration has the ability to impact us, as far as the moneys we get from the federal government."
Herbert said that even if the federal spending cuts kick in, Utah will still try to balance its budget and live within the available money it has.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)