(The Center Square) – Utah ended fiscal year 2022 with an extra $130.2 million in its general fund and $1.24 billion in its income tax fund, state lawmakers said Tuesday.
But legislative leaders cautioned that the extra funds are an “anomaly.”
“Strong fiscal policy and Utah’s entrepreneurial spirit have created an optimistic economic forecast for our state,” said Gov. Spencer J. Cox, President J. Stuart Adams and Speaker Brad Wilson in a joint statement. “Many anomalies, including unparalleled federal funding, have led to surplus revenue. State leaders will use caution in spending these funds. We remain committed to fiscal responsibility as we seek to fund projects that will serve our state now and for generations to come.”
The state put $37.3 million into reserves for the general fund and $5.1 million in the income tax rainy day fund, according to a joint news release. Another $25.5 million was put into the disaster recovery fund. The state’s fiscal year ended June 30.
Utah’s chief economist Andrea Wilko outlined looming economic issues to the Executive Appropriations Committee on Tuesday that lawmakers could face in 2023. The issues include inflation, declining consumer confidence, rising mortgage rates and supply chain problem.
The presentation outlined several future strategies for the committee that include treating “above-trend revenue growth as one-time revenue for major tax types.”
Also on the table is a decision on whether to “set aside special allocations for legislation that would reduce taxes.”
State Treasurer Marlo Oaks warned lawmakers of possible recession in his “2022 Debt Affordability Study” released earlier this month that was presented to the committee.
“Should our economy move into a recession, state revenues would likely decrease and spending needs increase,” Oaks said in the 29-page report. “Consequently, it may soon be prudent to once again consider debt as an option to fund capital needs. Utah policymakers should be aware of the potential benefits and drawbacks of debt and be ready to respond with debt authorizations for projects that have high economic benefits.”
The state’s bond rating with Moody’s is AAA, according to Oak’s presentation.