The FY 1997 program is compared by function and source of funds to the estimated budget for FY 1996 in Table 1. The column for FY 1996 estimated includes the original appropriations made in the 1995 Session and any changes in federal funds and dedicated credits or other sources of funds. The FY 1996 Revised column in Table 1 reflects the effect of supplemental appropriations made in the 1996 General Session and Second Special Session. The FY 1997 program is an increase of 5.18 percent from the revised budget for FY 1996.

    General and Uniform School Fund appropriations for FY 1997 are compared to the estimated appropriations for FY 1996 and to the revised appropriations including supplementals for FY 1996 in Table 2. The FY 1997 General and Uniform School Fund appropriation is 15.31 percent above the revised FY 1996 amount.
 
 

Uniform School Fund

     Legislative appropriations from the Uniform School Fund for FY 1997 are projected at $1,513,327,631. The projected ongoing revenue available is $1,387,590,000. The difference of $125,737,631 for succeeding year appropriations will either not be available thereby creating a one-time funding for FY 1997 only; or new economic forecasts will need to cover programs the legislature desires to continue before considering new program requests. In light of this, the Legislature specifically designated $48,239,800 in Uniform School Fund appropriations in House Bill 405, "Minimum School Program Act Amendments", as one-time funded programs. In addition, it was recognized that a minimum of $35.8 million of Minimum School programs would require ongoing funding from potential new revenues in subsequent years.

    The Higher Education appropriations for FY 1997 include $20,426,100 in one-time Uniform School Funds. Of this amount, $8,126,100 could be considered funding for programs that are ongoing in nature. These include staff for new libraries, enrollment, ATE programs, and $5.1 million in base funding which was switched from the General Fund to one-time Uniform School Funds. The Legislature will need to consider base funding for these expenditures in the next fiscal year.
 

General Fund

    Legislative appropriations from the General Fund for FY 1997 are projected at $1,497,031,050. The projected ongoing revenue available is $1,432,874,000. As with the Uniform School Fund, the difference of $64,157,050 in the General Fund for succeeding year appropriations will either not be available thereby creating a one-time funding for FY 1997 only; or new economic forecasts will need to cover programs the legislature desires to continue before considering new program requests.
 
 

     The revenue projections adopted by the Legislature for FY 1997 for the General , Uniform School, and Transportation Funds are shown in 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 1997. Table 3 also includes revised estimates adopted for FY 1996.
 
 

     The Legislature presented a three-pronged approach to tax relief during the 1996 General Session. First, sales tax relief was provided to the owners and operators of ski resorts by allowing them a sales tax exemption for equipment purchases and electricity purchases. Four additional sales tax exemptions were reinstated; coin operated laundries, coin operated amusement devices, coin operated car washes and the exemption for taxi cab fares. The basic effect of these sales tax exemptions is a decrease in the General Fund of approximately $1,253,300 annually.

    Second, the Legislature provided income tax relief to taxpayers by adjusting the income tax rates. The rate adjustment slowed growth of the Uniform School Fund by $40,000,000 annually. Income tax has shown significant growth in recent years and the Legislature chose to stabilize the growth. Additional income tax relief was provided by the Legislature by providing a deduction for health insurance premiums paid by the self- employed. This deduction will benefit those individuals who have no means of deducting the insurance under the federal or state tax structures by making health insurance costs 60 percent deductible. The relief to the self-employed taxpayers will be $4,000,000. The Gross Receipts Tax imposes in the 1995 General Session was adjusted so that $4,750,000 was scaled back from collections. An income tax deduction of $140,000 for adoption expenses was provided during the 1996 Session. A credit for the costs incurred by those who are required to pay for tutoring disabled students was provided at a cost of $750,000 in Uniform School Fund.

    Finally, the Legislature continued their push for property tax relief by adjusting the Local Contribution to the Minimum School Program by $30,000,000. The net effect of these tax initiatives was $80,000,000 in tax relief for the citizens of Utah. The approach taken by the Legislature maintained the three-pronged approach to taxation and should result in retained ability to weather volatile changes brought on by too much dependence on one tax source.
 
 

    The 1996 Legislature enacted several bills that will influence the revenue of the General Fund and Uniform School Fund for FY 1996 as follows:
 

Uniform School Fund

Senate Bill 102 - Income Tax Adoption Expense Deduction This bill provides an income tax deduction for the medical and adoption expenses associated with adopting children. The effect when fully implemented will be a decrease of $218,000 annually from income tax revenues.

Senate Bill 195 - Income Tax - Credit for Education Costs This bill provides a nonrefundable income tax credit for the tutoring cost of disabled dependents. The effect on the Uniform School Fund will be a decrease of approximately $750,000 a year.

Senate Bill 237 S2: - Income Tax Reductions This bill reduced the income tax rates over a two-year period resulting in a reduction of $40,000,000 to the Uniform School Fund annually.

House Bill 349 - Gross Receipts Tax Modifications This bill reduced the gross receipts rates charged on corporations not required to pay corporate franchise tax and reduced the rates charged to electrical corporations. The effect of the deductions is a $4,750,000 decrease to the Uniform School Fund.

House Bill 404 - Income Tax - Health Care Insurance Deduction This bill provides an income tax deduction for health insurance premiums paid by those who are self-employed or for those who pay for their own insurance. The reduction to the Uniform School Fund will be $4,000,000 annually.
 

General Fund

Senate Bill 50 - Sales Tax Exemption Taxicabs This bill provides a sales tax exemption for passengers in taxicabs that fall under a specified Standard Industrial Classification Code. The cost is estimated to be approximately $117,600.

Senate Bill 275 - Sales Tax Ski Industry Exemption This bill provides a sales tax exemption for the purchase of equipment or electricity used in the operating a ski resort. After full implementation the costs could be as much as $300,000.

House Bill 145 - Sales Tax Exemptions for Coin-Operated Laundromats This bill reinstates a sales tax exemption for coin-operated laundromats. The General Fund loss is $350,000 when fully reinstated.

House Bill 291 - Sales Tax Exemptions for Coin-Operated Car Washes This bill reinstates a sales tax exemption for coin-operated car washes. The General Fund loss is $450,000 when the exemption is fully reinstated.

House Bill 309 - Sales Tax Exemption for Certain Coin-Operated Amusement Devices This bill reinstates a sales tax exemption for amusement devices. The General Fund loss is $450,000 when fully reinstated.
 
 

House Bill 1003 - College Savings Incentive Program This bill provides an income tax deduction for funds put aside for college education. The Uniform School Fund loss will be approximately $120,000 in FY 1997.
 
 

State Employees

    The Legislature approved a compensation package for employees of state agencies that includes funds for a 3.9 percent cost-of-living adjustment. The package also included funding for minor adjustments in health and dental insurance, retirement, and other employee benefits.
 

Higher Education Compensation Funding

    As with other state agencies, the Legislature appropriated a 4 percent increase for faculty and staff in Higher Education. The increase of $18,586,800 was funded entirely from state funds (except for $22,500 from Mineral Lease revenues). The Legislature recognized the Board of Regents' decision not to raise student tuition for FY 1997. In the past, the Legislature has funded compensation increases partly from estimated tuition increase revenues. The Legislature also appropriated $989,500 from the General Fund for the increased State Retirement System rates in FY 1997.
 

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 1996 Legislature provided a 4.0 percent increase in the value of the weighted pupil unit for FY 1997. 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 $1,974,076 for FY 1997 which provides for added compensation for those participating in the Career Ladder program. In other action, the Legislature provided a $30,000,000 increase in class size reduction funds and $3,000,000 for teacher supplies and materials. While this funding is not direct funds for compensation purposes they do have some correlation. In addition, the Legislature provided approximately $9.5 million for a retirement rate increase for FY 1997.
 

Executive and Judicial Officials

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

Appointed Officials

    The Legislature increased the minimum and maximum rates of the Executive Compensation plan for appointed officials (department directors) by 3.9 percent. The Governor has the authority to set the salary of appointed officials within the ranges approved by the Legislature.
 

Legislature

Funding was provided to increase daily compensation for legislators from $85 to $100 beginning January 1, 1997.