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SALT LAKE CITY — A legislative committee on Tuesday set aside $400 million for tax cuts to be decided upon next year and approved budget recommendations for the upcoming general session.
The Utah Legislature's Executive Appropriations Committee agreed to set aside $545 million to be spent on ongoing tax cuts. That includes $145 million to cover a freeze on the basic school levy which is scheduled to sunset this year.
The $400 million in potential cuts is separate from Gov. Spencer Cox's proposed budget — which includes a one-time property tax relief and income rebates totaling around $1 billion — and can be spent however lawmakers decide.
House Speaker Brad Wilson, R-Kaysville, said the money being set aside is a testament to the state's fiscal health.
"On one hand, you're seeing us set aside money for a meaningful tax cut for Utahns," he said. "And we've demonstrated over the course of the last few years we've been able to constrain spending. ... On the other side, we're taking advantage of the great fiscal health we're in by putting money aside to reduce debt and to make big investments in infrastructure."
The $400 million in proposed cuts passed nearly unanimously, with House Minority Leader Brian King, D-Salt Lake City, using his negative vote to urge lawmakers to target future tax cuts to Utahns in the most need.
"There's no discussion about to whom the tax cuts are going or for what we're going to allocate them," he said. "Whether we're going to try and target them to people who are in the greatest need."
The committee also approved base budget recommendations for the 2023 general session which begins in January, including around $400 million for public education increases and over $3 billion to pay for inflationary cost increases, pay off debt and invest in infrastructure.
"Utah has made smart, conservative policy decisions that have enabled our state to navigate the uncertainty of a global pandemic," Sen. Jerry Stevenson, co-chair of the appropriations committee, said in a statement. "While Utah's economy remains robust, we are taking note of concerning trends and preparing for the uncertainties that lay ahead by spending additional funds on one-time expenses. As we budget for the state, we will be diligent to not burden Utahns now or in the future."
The appropriations committee received a report from the legislative fiscal analyst about the potential for a recession, and what it could mean for the state. While it remains unclear how likely a recession is, analysts projected that a severe recession could cost the state $3.7 billion in lost revenue over the next five years.
Senior economist Maddy Oritt told the committee the state has done a good job preparing for a possible recession by considering budget surpluses in previous years as one-time rather than ongoing revenue.
"This is really powerful to see this play out like this. (It) would be horrible to live through, and so let's hope we don't do that," Wilson said. "But it also demonstrates, I think, how well-positioned we are to ride something. ... We're really well-prepared for that based on what you just showed us."
