SALT LAKE CITY — Because the state took control of the scandal-plagued Utah Transit Authority last year, it must now show the agency’s debt on its annual financial report.
As a result, the report for the fiscal year ended June 30 reflects an additional $2.65 billion in liabilities. But that doesn’t mean the state is on the hook for the debt, said State Auditor John Dougall.
“UTA is still accountable for their own debt, but we have to show that because they’re a sub-beast of the state,” he said. “There’s nothing in here that says the state assumes responsibility for the debt or anything like that.”
In 2018, state lawmakers did away with the UTA’s 16-member board of trustees selected largely by local leaders to a three-member commission appointed by the governor. Dougall said that necessitated UTA being treated as a “component unit” of the state, though not as a state agency such as the Utah Department of Transportation.
“This is more than just a technical thing because of the nature of the governor’s power to appoint and remove from the board. It’s much more because of his ability to remove for any purpose that really says the state can now exert control over UTA,” Dougall said. “When it comes to the rules that we have to deal with, that’s what we look at.”
The auditor’s office recently finished its review of the state financial report, including debt and other long-term commitments Utah incurs during the ordinary course of business.
“Utah is a rapidly growing state,” Dougall said. “It is important for citizens to monitor the use of debt by its government.”
As of June 30, state debt, largely made up of general obligation bonds, totaled $4.1 billion or about 66% of the Utah’s constitutional debt limit.
Utah is a rapidly growing state. It is important for citizens to monitor the use of debt by its government.
–Utah State Auditor John Dougall
Business activities, which include the state’s water loan and community housing programs, account for another $1.38 billion in long-term liabilities, while “component units,” now including UTA, totaled $4.88 billion.
Those liabilities, largely revenue bonds, do not count against the state’s constitutional debt limit of $6.24 billion.