Cox proposes $29.5B state budget with plans to build 35,000 new starter homes

WEST HAVEN, Weber County — The median price of a home in Utah was over $500,000 in September, up from $336,000 four years ago, according to Utah Gov. Spencer Cox.

That "terrifying" number reflects the difficulty many young Utahns face in purchasing a new home, which is why the governor is proposing a $150 million plan to build 35,000 new starter homes by 2028.

"The fact is, the single greatest threat to our future prosperity, the American dream and our strong communities is the price of housing," Cox said during a press conference at a Nilson Homes development in West Haven on Tuesday. "Our kids will never be able to call Utah home if we don't start building starter homes again."

Several factors, including policy and profits, have led developers to focus on building large, expensive homes or apartment complexes, leaving first-time home buyers with few options. Homeownership can not only provide financial and social stability, it can increase civic engagement, the governor said.

"I want you to imagine a world where an entire generation of people never have the opportunity to own a home. What does this state look like 50 years from now?" Cox asked. "I believe this is an existential threat not just to the American dream, but to our way of life as a state and as a country."

The plan was unveiled Tuesday as part of the governor's proposed $29.5 billion budget, which tops last year's record ask of $28.4 billion.

His budget announcement comes one day after the governor announced he would ask lawmakers for nearly $200 million to address housing and homelessness in the state, along with plans to fill Utah's shortage of mental health professionals.

Cox's budget provides for key policy solutions he believes will help the state adapt to population growth and support families.

Here are a few other key provisions in the governor's proposed budget:

• $193 million to address homelessness, which includes nearly $130 million for emergency shelters, $8 million for behavioral health professionals and $57 million for prevention, including affordable housing. The governor also requested $50 million to build on the Utah Legislature's first-time homebuyer program that provides down-payment assistance for people purchasing certain newly built homes.
• The homelessness provisions also include a $10 million one-time investment to establish a diversion court pilot program called HOME Court, which is described as a "less restrictive, civil option for individuals with mental illness who do not meet the standard for civil commitment or other criminal diversion courts."
• $1.04 billion for education and workforce development, including over $850 million for public education and teachers, and $56.2 million for workforce expansion. That will include $7 million to increase opportunities for certificate and degree programs, $6.7 million to grow technical education and $2 million for apprenticeship opportunities.
• $173.3 million for emergency preparedness, including solutions to key risks identified by a recent legislative audit. Cox asked for $15 million in one-time funding to the Department of Corrections to pay for overtime expenses and $2.7 million in ongoing funds to "address critical staffing needs directly related to improving safety at the prison."

The governor's budget requests will need approval from lawmakers during the upcoming general session and amounts are subject to change.

What's in the funding for housing?

Cox's request for funding is accompanied by the appointment of former state lawmaker Steve Waldrip to serve as a senior adviser to the governor for housing strategy and innovation. In his new position, Waldrip will be tasked with developing a statewide plan for housing and looking at ways to expand the housing stock in the state.

"Today's shortage of housing puts homeownership out of reach for too many Utahns and presents an existential threat to Utah's future," Cox said. "Steve has a passion for housing and deep experience in housing attainability, housing development, and the legislative process. He's respected across the board and I'm so grateful he's willing to join our administration to work on these important issues."

The $150 million Cox is requesting includes $50 million to expand the first-time homebuyer assistance program, $75 million for infrastructure to support housing, $5 million for a starter home innovation fund, $15 million for "sweat equity" programs to help homeowners contribute physical labor toward their down payments and $5 million for community land trusts to maintain housing affordability.

Lawmakers set aside $160 million for tax cuts

After cutting more than $400 million in taxes earlier this year, lawmakers set aside another $160 million to cover another potential tax cut next year. The cut would decrease the state's income tax rate from 4.65% to 4.55%.

Lawmakers have previously proposed cutting the state's sales tax on food, which would shave off another $200 million, though that proposal is contingent on voters approving an amendment to the Utah Constitution which will be on the ballot this fall.

The planned tax cut for next year isn't a sure thing, and the Executive Appropriations Committee on Tuesday was told that last year's income tax revenue was almost $120 million below projections. The most recent projections say revenues should increase this year and continue to grow in fiscal year 2025.

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