Utah’s economy remains among the strongest in the nation, but what does it mean to be “fiscally responsible” in our state? Gov. Cox recently explained how we want to spend Utah’s resources responsibly, and protect against a potential recession. There are so many factors that contribute to the fiscal responsibility of our state, so let’s take a closer look.
Our unemployment is at 2.2% and our job growth is up 6.7% over where we were before the pandemic. Without a doubt, Utah is well-positioned for 2023.
As the graph below shows, Utah’s recovery from the pandemic recession has been broad based. This economic strength didn’t happen by chance. The innovation, hard work and careful financial planning of generations of Utahns got us where we are today.
Source: U.S. Bureau of Labor Statistics
You can see how we continue to be fiscally responsible in our proposed FY 24 budget. But here’s how we do it:
Fiscal responsibility starts with paying off debt. Last year we replaced $294M in unissued authorized bonds for transportation projects and paid down $250M in future prison bond payments. This freed up $40M, creating ongoing funding with one-time money!
Source: 2022 Debt Affordability Study, Office of the State Treasurer
Next, comes preparation. In Utah, we like to be prepared. Utah has consistently built up our rainy day funds since the last economic downturn — even during the COVID-19 pandemic.
For FY 23, we’ll have a total of $1.4 billion in rainy day reserves enabling us to respond to emergencies like earthquakes, fires and floods.
To keep this momentum going in FY 24, we’re proposing to continue paying off debt with another $557M for debt payments. Lower debt helps us keep our current AAA credit rating, which has saved us millions over the years.
We’re using one-time funds to pay for one-time projects like new buildings and building renovations. We don’t want to pay for ongoing programs with one-time money. Our experts identified $600M ongoing and $300M of one-time revenue that’s considered “high-risk.” We’re proposing these funds go to “low-risk” projects in case we have an economic downturn. We recognize there are economic headwinds and we’re trying to make our state budget recession proof.
And we’re leveraging federal funds to speed up capital and infrastructure projects related to affordable housing, transportation, water, broadband, technology enhancements and more. These projects will benefit generations of Utahns far into the future.
We’re also fully funding long-term projects and also paying for projects with cash whenever we can.
In FY 24, we’re recommending paying cash for new capital projects like a new DABS warehouse and liquor stores to avoid new debt.
We’re also proposing responsible, measured tax cuts that won’t put us in a vulnerable position later. These include cuts to the income tax, Social Security tax, a new tax exemption for pregnant moms, property and income tax rebates, and more.
Because of these prudent budgeting practices, Utah will keep its stellar reputation for fiscal responsibility and keep us strong when times are hard. You can view our full FY 24 budget recommendations at gopb.utah.gov. And if you have any questions or concerns, you can reach out to our constituent services team at governor.utah.gov/contact.
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