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SALT LAKE CITY — At the same place pioneers arrived in the Salt Lake Valley more than 172 years ago, Gov. Gary Herbert rolled out a $20 billion budget for Utah Wednesday that includes his largest-ever request for public education funding amid concerns about the impact of tax reform on schools.
The governor, who is not seeking reelection after more than a decade in office, also called for a freeze on increases in tuition at state colleges and universities until officials can define what is affordable, $100 million to improve air quality by investing in transit and electric vehicle infrastructure and $20 million for affordable housing.
Among the other highlights in the budget recommendations Herbert unveiled on a snowy morning in front of roaring fire inside a building at This Is The Place Heritage Park are a $40 million endowment to preserve open space and recreational areas, taxing vaping and e-cigarette products and $5.6 million for health crisis centers.
The budget for the spending year that begins July 1, likely the governor’s last full set of recommendations to the Utah Legislature, come as a referendum is being circulated statewide to repeal the tax reform package passed in a special session last month. The changes reduce income taxes but raise sales taxes on food, gas and some services.
Herbert’s budget cites the $160 million overall tax cut in the package, the result of dropping the state income tax rate from 4.95% to 4.66% while providing an increased dependent exemption and new tax credits aimed at low- and moderate-income Utahns.
Lawmakers, who begin meeting in regular session on Jan. 27, have yet to deal with the education piece of tax reform that seeks to remove the requirement in the Utah Constitution that income taxes only be used for education while making it easier for local school districts to increase property taxes.
The governor emphasized his commitment to continuing to fund education even as income tax collections are expected to drop by $639 million. He told a Utah Taxpayers Association conference Tuesday that sales taxes spend the same as income taxes and announced his funding goal for public schools.
His budget would add $292 million in new money to K-12, increasing the weighted-pupil unit funding mechanism for schools by 4.5%, providing $18.6 million for optional enhanced kindergarten and boosting access to computer science programs.
The focus is on reforms for higher education. Besides the tuition freeze, Herbert’s budget calls for consolidating postsecondary governance, differentiating the cost of associate degrees and identifying programs that should be competency-based.
He has set the goal of reducing per capita emissions in the state 25% by 2026, and wants $34 million to expand transit options as well as $63 million to enhance the infrastructure for electric vehicles, possibly adding as many as 400 charging stations throughout the state.
His proposal is up from the current $19 billion budget, but includes money for the full Medicaid expansion with a work requirement that was just approved by the federal government. There is a 2.5% pay increase for state employees, but Herbert stressed the workforce is lower than it was in 2002 despite population growth.
No new bonding is recommended, and there is $635 million set aside in rainy day funds. The budget was released later than usual because of the Legislature’s tax reform efforts, intended to fix the state’s structural imbalance between the two key revenue sources, income and sales taxes.