Following days of closed-door meetings, top House and Senate leaders reached a tentative deal on Tuesday that would fund the state’s $19 billion budget.
“This year has had some interesting twists and turns,” House Speaker Brad Wilson said at a Tuesday afternoon press conference. “But we feel like we’re in a very good place right now.”
The deal converts nearly all ongoing funding requests into one-time spending, meaning appropriations would run out after a year. It’s a move leaders hope will allow them to continue to work on tax reform later this summer.
“That gives us a period of time” to work on stabilizing the state’s tax code, said Senate Pres. Stuart Adams, R-Layton. “It gives us an incentive to try to make sure we get it done.”
Top legislative leaders also announced the creation of a task force to work on tax reform in the coming months in preparation for a special session sought by Gov. Gary Herbert. Wilson said the group is charged with coming up with potential solutions to the state’s funding imbalance by August.
The compromise leaves the door open to a potential $75 million tax cut, a much smaller amount than what leaders had promised earlier in the session.
The House and Senate had been feuding for days over what to do with the state’s nearly $1 billion surplus this year following the breakdown of a sweeping tax reform package that would have added new taxes for service-based businesses.
The Legislature, backed by Herbert, is looking for a long-term solution to the problem of a sales tax base that is not keeping pace with the state’s booming population. The sales tax is the primary funding source for most state services, including public safety, roads and social programs such as Medicaid.
“One thing I think we all agree on, including the governor, is that this is a problem,” Adams said. “I think we’re all committed to trying to solve that problem.”
House leaders had earlier proposed a so-called “skinny budget,” funding just core services such as growth in public schools and Medicaid, while leaving most of the budget surplus in reserve until changes are made to the tax code.
But Senate leaders resisted the move and appear to have mostly gained the upper hand in negotiations, fully funding most new appropriations — at least for the next fiscal year.
The compromise shields a large chunk of the surplus, nearly $300 million, until lawmakers reconvene to debate changes to the tax code.
“We really want to keep everyone’s attention as we work through this process,” said Rep. Brad Last, the House budget chair.
Lawmakers are required by the Utah Constitution to balance the state’s budget and approve new and existing spending by midnight on Thursday.
Last told House Democrats that due to the “tense negotiations” he would resist any amendments to the budget in a vote scheduled for later Tuesday, hinting at the delicate nature of the deal.
“It’s been a journey,” he said.
This post has been updated from an earlier version.
Editor's Note: KUER is receiving an appropriation of $450,000 from the state budget for a planned transmitter in Washington County.