House Committee Says Curb Spending

House Committee Says Curb Spending

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SALT LAKE CITY (AP) -- Even in flush times, Utah would limit government spending under a bill advanced Friday by a House committee.

The measure changes a spending formula to limit the state's ability to use surplus tax revenue it can get when more people are working or making more money in their jobs. But House Bill 66 makes notable exceptions for public education or road-building, saying any revenue windfalls can be used for that purpose.

Another exception gives the Legislature and governor flexibility to send surplus revenue to the state's rainy day savings account. That would leave spending limits for the taxpayer-supported General Fund, which funds government agencies and programs including Medicaid.

Utah legislators haven't seen flush times for years, but with the economy and tax revenue showing signs of a recovery the measure, if approved, could come into play this year or next.

It was opposed by Gov. Olene Walker's office, suggesting she could veto the bill if it comes across her desk.

"It ties our left hand to our belt loop," Richard Ellis, director of governor's office of planning and budget, told the House Judiciary Committee. "It results in prioritization by formula."

Associations for small business and manufacturers and the Utah Taxpayers' Association endorsed the bill.

"We don't believe that government is supposed to create activities and programs with the simple expectation that taxpayers will end up paying for it," said Ron Casper, Utah spokesman for the National Federation of Independent Business.

The bill would restrain General Fund spending to a formula tied to inflation and population growth. That formula includes personal income growth as another factor, but Rep. Gregory Hughes, R-Draper, is trying to take out of the equation. He argued Utah, with the ninth highest tax burden among states, needs more fiscal discipline.

Utah had little choice but to cut $700 million from its deficit-plagued budgets over the past two fiscal years to cope with a recession that took hold after the 2002 Winter Olympics.

Among the choices lawmakers made was to cut dental services for Medicaid recipients, who are lobbying at the Capitol for a restoration.

Hughes said the Legislature could suspend the General Fund spending cap under his proposal, but would have to make a deliberate decision to do so, putting their votes on the record.

House Bill 66 now goes to the full House for a vote.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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