FY 1996 Appropriations Report


Summary

The Legislative program for FY 1996 enacted in the 1995 General Session, totals $5,027,609,440 from all funds for the operations of state government and for state and local support to local school districts. This total includes the effect of all general appropriations acts, the School Finance Act, acts carrying specific appropriations, and estimated federal funding.

The FY 1996 program is compared by function and source of funds to the estimated budget for FY 1995 in Table 1. The estimated column for FY 1995 includes the original appropriations made in the 1994 General Session and any changes in federal funds and dedicated credits or other sources of funds. The revised FY 1995 column in Table 1 reflects the effect of supplemental appropriations made in the 1995 General Session. The FY 1996 program is an increase of 3.6 percent from the revised budget for FY 1995.

General and Uniform School Fund appropriations for FY 1996 are compared to the original appropriations for FY 1995 and to the revised appropriations including supplementals from these funds for FY 1995 in Table 2. The table also includes the effect of transfers from the General Fund to the Budget Reserve Account in both fiscal years. The FY 1996 General and Uniform School Fund appropriation is 10.6 percent above the revised FY 1995 amount.

Other Topics in Summary

 

Revenue

The revenue projections adopted by the Legislature for FY 1996 for the General, Uniform School, and Transportation Funds are shown on Table 3. Also shown are the estimates for the Mineral Lease Account. The effect of legislative changes as the result of bills or other actions are shown in a separate column resulting in a revised estimate for FY 1996. Table 3 also includes revised estimates adopted for FY 1995.

Tax Changes

One of the main areas of focus of the 1995 General Session was property tax relief. The Tax Commission factoring orders, if implemented by county assessors would increase assessed valuations of properties in 24 of the 29 counties. In addition to the factoring effect, property taxes would also increase as a result of an agreement made by the counties to move to current 1995 market values for homes and businesses. The combined effect from factoring and the move to 1995 values on assessed valuations could be as low as an 11 percent increase in a county like Grand County, or as high as a 70 percent increase in a county like Salt Lake. The tax increase from factoring resulting from the local contribution to the Minimum School Program at the new rate would have been about $46,828,000. Coupling the factoring effect at the new rate with the tax cut of $90,000,000 imposed in Senate Bill 254, results in a potential property tax cut of as much as $136,828,000 in FY 1996 from what could have been collected.

In order to provide relief to the taxpayer from factoring the Legislature passed a series of bills which were intended to offset the effects of the factoring orders and the shift to 1995 values. The most significant of these bills (Senate Bill 254) provided $90,000,000 in tax relief by decreasing the rate authorized for the local contribution to the Minimum School Program from .004220 to .002864. This bill also increased the gross receipts tax on utilities by $9,474,000 to offset the effect of the tax cut. The Legislature also passed Senate Bill 56 which increased the residential exemption for primary property to its constitutional limit of 45 percent. The benefit derived by increasing the residential exemption is to further offset the effects of the factor orders. To prevent any windfall from the factoring orders the Legislature passed House Bill 258 which floats the local contribution to the Minimum School Program and the state assessing and collecting levy. The net effect of these property tax changes should be to decrease the effect of the factoring orders on individual property owners.

The Legislature also provided sales tax relief to several taxpayers by narrowing the base on which sales tax is charged. Medical equipment and manufactured homes, and manufacturing equipment for new and expanding operations were removed from the sales tax base. The legislature also reexempted construction materials for school buildings from the sales tax. When fully phased in the effect of these changes will be to lower revenues by approximately $34,500,000. Extending the exemption to new and expanding manufacturing equipment purchases could serve as an incentive to induce corporations to relocate to Utah.

In summary, the focus of the 1995 General Session was to lower taxes for several groups including residential and business owners, lower income individuals, and large corporations. The only significant tax increase was the increase in gross receipts tax imposed on utilities.

Bills Affecting Revenue

The 1995 Legislature enacted a number of bills that will impact the revenue of the General Fund and Uniform School Fund for FY 1996 as follows:

General Fund:

House Bill 56 Sales Tax - Home Medical Equipment This bill exempts home medical equipment and supplies from the sales tax. The estimated loss of General Fund revenue in FY 1996 is $288,000.

House Bill 120 Sales Tax - Authorized Carrier Exemption This bill exempts sales of motor vehicles, aircraft, and railroad rolling stock sold to, leased or used by authorized carriers. The estimated loss of General Fund Revenue in FY 1996 is $150,000

House Bill 274 Sales Tax On Construction Projects This bill reinstates the exemption from sales tax for construction materials used in public education building projects. The estimated loss of General Fund Revenue in FY 1996 is $2,030,000

Senate Bill 43 Agricultural Sales Tax Exemptions This bill tightens the requirements necessary to qualify for a sales tax exemption for sprays and insecticides and agricultural seasonal sales. The bill also exempts the sales of hay from sales tax. The net effect of the bill is to increase General Fund revenue by $275,000.

Senate Bill 105 Sales Tax - Manufacturing Equipment This bill extends the sales tax exemption for manufacturing equipment to replacement parts. The estimated loss of General Fund revenue in FY 1997 is $8,577,000.

Senate Bill 273 Sales Tax Exemption on School Fundraisers This bill exempts sales by students in grades K through 12 for the purpose of fundraising. The estimated loss of General Fund revenue is $50,000 in FY 1996.

Senate Bill 289 Sales Tax Mobile Homes This bill exempts 45 percent of the sale price of any new mobile home purchase or 100 percent of the resale price for a used unit. The estimated loss of General Fund revenue in FY 1996 is $1,060,000.

Uniform School Fund

House Bill 20 Tax Incentives for Employ Persons with Disabilities This bill provides an income tax credit to employers who hire individuals with disabilities. The estimated loss of Uniform School Fund revenue in FY 1996 is $64,400.

House Bill 279 Income Tax Credit for Providers of Individuals with Disabilities This bill provides an income tax credit for cash contributions made to private nonprofit providers of services to individuals with disabilities. The estimated loss of Uniform School Fund revenue in FY 1996 is $72,000.

Legislative Action on Employee Compensation

State Employee

The Legislature approved a compensation package for employees of state agencies that included funds for merit increase steps of 2.75 percent for eligible employees; an increase in premiums for health insurance; retirement increases; selective salary range adjustments for those employees whose salary ranges will be changed; and bonus pay for those eligible due to performance.

Higher Education Compensation Funding

The FY 1996 Appropriation Act includes 4.0 percent increase funding for salaries and benefit costs for faculty, staff and administration in Higher Education. The plan of financing includes: $12,186,300 from the General Fund, $15,200 from the Uniform School fund, and $4,260,600 from tuition revenue. There was also appropriated $272,500 to fund faculty salaries increases at Dixie College, Southern Utah University and Salt Lake Community College above the 4.0 percent received by the other institutions.

Public Education Compensation Funding

Compensation for administrators, teachers, and classified personnel in public education is established at the local level on a district-by-district basis through the negotiations process. Since State funds, through the Minimum School Program established by the Legislature, are usually the largest income source for local school districts, the percentage increase in the weighted pupil unit (WPU) guarantee has a direct correlation with increases in salaries and benefits.

The 1995 Legislature provided an increase in the value of the weighted pupil unit for FY 1996 of 4.0 percent. The School Finance Act specifies that, "local school boards shall provide higher salary adjustments to classified employee groups in comparison to other district employee groups when dividing the weighted pupil unit for salary adjustment purposes." A similar provision is also included providing the same salary adjustment intent language for "employee groups that work with the transportation of students." The Legislature also increased the Career Ladder program funding by $1,704,344 for FY 1996 which provided for indexing of the program to the WPU value and pupil growth.

Executive and Judicial Officials

The Legislature increased the salaries for elected officials and judiciary as indicated below.

Position

Actual

FY 1995

Approved

FY 1996

% Change
Elected Officials

Governor

$79,600

$82,000

3.0

Lt. Governor 61,800 63,700 3.0
Attorney General 67,000 69,000 3.0
State Auditor 63,900 65,800 3.0
State Treasurer 61,800 63,700 3.0
Judiciary
Associated Justice,

Supreme Court

92,000

94,800

3.0

Appellate Court 87,850 90,500 3.0
District Court 83,650 86,200 3.0
Juvenile Court 83,650 86,200 3.0
Circuit Court 79,500 81,900 3.0

Appointed Officials

The Legislature increased the minimum and maximum rates of the Executive Compensation plan for appointed official (department directors) by three percent for Governor who has authority to set the salary of appointed officials within the ranges approved by the legislature. Salaries for the Legislature did not change.

Table 1 State of Utah

Appropriation Summary

Program

FY 1995

Estimated

FY 1995

Supplementals

FY 1995

Revised

FY 1996

Appropriation

Percent

Change

 
Legislature $10,622,600 $180,000 $10,802,600 $10,568,900 -2.16%
Elected Officials 38,861,400 1,100,500 39,961,900 41,906,600 4.87%
State Courts 63,721,000 884,100 64,605,100 69,095,300 6.95%
Corrections 148,121,400 820,000 148,941,400 170,600,600 14.54%
General Government 108,178,200 2,081,400 110,259,600 111,000,600 0.67%
Public Safety & Nat'l Guard 65,283,900 292,600 65,576,500 69,648,800 6.21%
Human Services 461,826,400 6,016,400 467,842,800 491,116,700 4.97%
Health 683,645,500 (6,301,000) 677,344,500 713,335,100 5.31%
Public Education
Agencies 249,629,600 2,529,600 252,159,200 250,459,600 -0.67%
Min. School Program 1,359,445,262 12,000,000 1,371,445,262 1,440,836,640 5.06%
School Bldg. Program 21,416,000 2,000,000 23,416,000 24,116,000 2.99%
Higher Education 553,019,300 2,832,800 555,852,100 590,770,100 6.28%
Natural Resources 113,317,200 10,460,000 123,777,200 103,153,800 -16.66%
Bus., Labor, Agric., EQ 162,760,200 2,818,200 165,578,400 159,984,700 -3.38%
Community & Econ. Develop. 107,760,400 4,820,000 112,580,400 105,931,900 -5.91%
Transportation 439,436,700 28,800 439,465,500 449,107,200 2.19%
Debt Service 81,937,800 81,937,800 82,100,500 0.20%
Capital Facilities 135,293,900 3,300,000 138,593,900 138,776,400 0.13%
Circuit Breaker 4,600,000 4,600,000 5,100,000 10.87%
TOTAL $4,808,876,762 $45,863,400 $4,854,740,162 $5,027,609,440 3.56%
Plan of Financing
General Fund $1,176,537,700 $24,000,600 $1,200,538,300 $1,315,907,600 9.61%
Uniform School Fund 1,124,918,866 16,637,600 1,141,556,466 1,274,846,576 11.68%
Transportation Fund 272,924,400 272,924,400 257,693,000 -5.58%
Federal Funds 1,094,412,114 (3,516,600) 1,090,895,514 1,127,742,000 3.38%
Dedicated Credits 272,957,927 2,504,500 275,462,427 279,693,700 1.54%
Fixed Collections 1,172,400 1,172,400 1,206,000 2.87%
Mineral Lease 32,610,600 32,610,600 35,894,000 10.07%
Transfers 108,362,259 1,167,300 109,529,559 111,142,900 1.47%
Restricted and Trust Funds 124,130,200 1,112,200 125,242,400 164,711,000 31.51%
Liquor Control Fund 19,683,000 19,683,000 20,215,200 2.70%
Commerce Service Fund 12,543,500 169,200 12,712,700 13,539,200 6.50%
Other 25,452,400 3,962,000 29,414,400 22,972,600 -21.90%
Bonding 127,585,600 127,585,600 123,989,300 -2.82%
Oil Overcharge 2,886,800 2,886,800 3,705,800 28.37%
Nonlapsing Funds 81,093,100 (173,400) 80,919,700 5,378,600 -93.35%
Property Tax 331,605,896 331,605,896 268,971,964 -18.89%
TOTAL $4,808,876,762 $45,863,400 $4,854,740,162 $5,027,609,440 3.56%
Table 2 State of Utah Appropriations Summary

General Fund and Uniform School Fund

FY 1995

Appropriation

FY 1995

Supplementals

FY 1995

Revised

FY 1996

Appropriation

Percent

Change

PROGRAM
Operating Budgets
Legislature $9,908,300 $180,000 $10,088,300 $10,156,300 0.67%
Elected Officials 21,184,800 972,500 22,157,300 23,441,400 5.80%
State Courts 60,857,200 660,100 61,517,300 66,736,000 8.48%
Corrections 129,922,400 820,000 130,742,400 154,740,400 18.36%
General Government 51,852,800 2,031,400 53,884,200 57,672,900 7.03%
Public Safety & Nat'l Guard 31,625,500 292,600 31,918,100 33,743,700 5.72%
Human Services 167,100,800 3,636,000 170,736,800 196,602,500 15.15%
Health 140,630,800 (913,800) 139,717,000 150,656,800 7.83%
Public Education
Agencies 59,509,100 2,529,600 62,038,700 64,365,300 3.75%
Min. School Program 1,033,597,366 12,000,000 1,045,597,366 1,177,622,676 12.63%
School Bldg. Program 13,874,400 2,000,000 15,874,400 13,874,400 -12.60%
Higher Education 397,538,800 2,832,800 400,371,600 424,897,200 6.13%
Natural Resources 28,288,900 7,190,000 35,478,900 30,921,000 -12.85%
Bus., Labor, Agric., EQ 23,370,500 587,000 23,957,500 24,054,100 0.40%
Community & Econ. Develop. 34,609,500 4,820,000 39,429,500 35,987,600 -8.73%
Transportation 1,376,800 1,376,800 31,679,000 2200.92%
Debt Service 74,400,300 74,400,300 75,984,700 2.13%
Capital Facilities 17,208,300 1,000,000 18,208,300 12,518,200 -31.25%
Circuit Breaker 4,600,000 4,600,000 5,100,000 10.87%
GRAND TOTAL $2,301,456,566 $40,638,200 $2,342,094,766 $2,590,754,176 10.62%

Table 3 State of Utah Revenue Estimates (In Thousands)

FY 1995

Est. 2/95

FY 1996

Estimate

Effect of

Legislative

Changes

FY 1996

Revised

Estimate

GENERAL FUND
Sales and Use Tax $1,047,300 $1,127,300 ($3,613) $1,123,687
Liquor Profits 18,000 19,000 19,000
Insurance Premiums 39,000 41,500 41,500
Beer, Cigarette and Tobacco 37,500 38,000 38,000
Oil, and Gas Severance 13,000 13,500 13,500
Metal Severance 6,700 6,900 6,900
Inheritance 22,600 6,800 6,800
Investment Income 7,500 8,000 8,000
Other 26,000 36,349 36,349
Total General Fund $1,217,600 $1,297,349 ($3,613) $1,293,736
UNIFORM SCHOOL FUND
Individual Income Tax $1,005,000 $1,082,000 $3,686 $1,085,686
Corporate Franchise Tax 125,000 120,000 120,000
Mineral Production Withholding 8,300 8,500 8,500
Gross Receipts Tax 4,300 4,400 9,400 13,800
Escheats 3,500 3,600 3,600
Recapture 1,800 2,100 2,100
Permanent Fund Interest 4,000 3,000 ___ 3,000
Total Uniform School Fund $1,151,900 $1,223,600 $13,086 $1,236,686
Total Both Funds $2,369,500 $2,520,949 $9,473 $2,530,422
TRANSPORTATION FUND
Motor Fuel $156,000 $160,000 ($1,500) $158,500
Special Fuel 38,000 39,300 39,300
Motor Vehicle Registration 22,000 22,800 22,800
Driver's License Fees 9,400 9,600 9,600
Other 21,000 23,000 23,000
Total Transportation Fund $246,400 $254,700 ($1,500) $253,200
FEDERAL MINERAL LEASE
Regular $30,500 $32,000 ($1,000) $31,000
Bonus 3,000 3,000 3,000
Total $33,500 $35,000 ($1,000) $34,000


Detail:

Business/Labor/Agri/Environment
Higher Education
Health
Human Services
Legislature/Exec/Courts/Corrections
Natural Resources
Public Education


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