The Legislative program for FY 1998 enacted in the 1997 General Session, totals $5,982,531,236 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, actions of the Governor's vetoes, 1997 Special Session actions, and estimated federal funding.
The FY 1998 program is compared by function and source of funds to the revised budget for FY 1997 in Table 1. The column for FY 1997 estimated includes the original appropriations made in the 1996 General Session and any changes in federal funds and dedicated credits or other sources of funds. The FY 1997 Revised column in Table 1 reflects the effect of supplemental appropriations and other legislative actions of the 1997 General Session as indicated in the Legislative Actions column. The FY 1998 ongoing appropriations are an increase of 9.8 percent from the revised ongoing budget for FY 1997.
General and Uniform School Fund ongoing appropriations for FY 1998 are compared to the revised FY 1997 ongoing budget. The FY 1998 General and Uniform School Fund ongoing appropriation is 3.3 percent above the revised FY 1997 ongoing amount. One-time funding appropriations are represented in the middle of the table and compared with the prior year. Revenue surpluses were not as significant in FY 1998 and appropriations for one-time expenditures were more restricted than in the previous 1996 Legislature.
The Higher Education appropriations for FY 1998 include $74,793,500 in income tax revenue now available to fund higher education programs as a result of the passage of an amendment to Article X, Section 2 of the Utah Constitution by the electors of the State in the November 1996 general election. Of this amount $72,293,500 is for ongoing appropriations. When this is added to the total of the ongoing appropriations from State funds for FY 1998 there is an increase of 4.8 percent in the legislative budget over the prior year.
Revenue
The revenue projections adopted by the Legislature for FY 1998 for the General, Uniform School, and Transportation Funds are shown in Table 2. 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 1998. Table 2 also includes revised estimates adopted for FY 1997.
Tax Changes
Transportation funding was the major focus of the tax changes enacted in the 1997 General Session. A Motor Fuel and Special Fuel Tax increase of five cents and a diversion of one-half cent from the Underground Storage Tank Fund was implemented with passage of Senate Bill 253, "Sales Tax Reduction, Fuel Taxes, and Repeal of Environmental Surcharge on Petroleum." These increases were allocated to the Centennial Highway Trust Fund. Senate Bill 253 also decreased the State Sales Tax rate by 1/8 of one percent to offset some of the effect of a gas tax increase. House Bill 414, "Registration Fee on Vehicles," increased motor vehicle registrations and diverted the revenue increase to the Centennial Highway Trust Fund. House Bill 413, "Sales Tax Revenues to Transportation Funding," diverts 1/64 of one percent from the sales tax currently allocated to Olympic funding and uses it to fund highway construction beginning in FY 2001. Senate Bill 252, "Collection of Fuel Tax," changed collection of Special Fuels from the pump to the rack. Based on the actions of the 1997 General Session, Centennial Highway Trust Funds should increase by $89,750,000 in FY 1998. Sales tax revenues should decrease by $34,300,000 over this same time period.
A tax increase on cigarette's of 25 cents was enacted in the 1997 General Session. The result of this will be a General Fund increase of $21,800,000 beginning in FY 1998.
The Legislature also provided local governments additional taxing authority with the passage of House Bill 98, "Local Taxing Authority," and, Senate Bill 26, "Sales Tax Option for Counties."
The 1997 Legislature enacted several bills that will affect the revenues of the General Fund, Uniform School Fund and Transportation Funds.
General Fund
House Bill 27 - "Cigarette Tax Increase and Regulation" This bill increases the tax rate on cigarettes by 25 cents. The revenue increase is estimated to be $21,800,000.
House Bill 84 - "Sales Tax Exemption for Employee Transportation" This bill provides a sales tax exemption for employee transportation when the transportation is arranged or provided by the employer. The cost is $9,500.
Senate Bill 29 - "Sales Tax Exemption for Scrap Recycle's" This bill allows scrap recycles to come under the definition of manufacturers for the purposes of the sales tax exemption on equipment. The cost is $76,900 the first year.
Senate Bill 50 - "Sales Tax Refund on Donated Food" This bill allows a qualified emergency food agency to claim a tax refund on food donated. The cost is $86,500 the first year.
Senate Bill 253 - "Sales Tax Reduction, Fuel Tax, and Repeal of Environmental Surcharge on Petroleum" This bill decreases the state sales tax rate by 1/8 of one percent. The cost is $34,300,000.
Uniform School Fund
Senate Bill 36 - "Income Tax - Energy Savings Credit Extension" This bill extends the repeal date of the Energy Saving Credit. The cost is $27,000.
Senate Bill 41 - "Coal Tax Credit" This bill reinstates the steam coal tax credit. The cost is estimated at $250,000 the first year.
Senate Bill 139 - "Clean Burning Stove Tax Credit" This bill extends the repeal date for Clean Burning Stove Credits. The cost is approximately $35,000.
Transportation Fund
Senate Bill 252 - "Collection of Fuel Tax" This bill changes the point of taxation for certain special fuels from the pump to the rack. The revenue generated is approximately $10,000,000.
Senate Bill 253 - "Sales Tax Reduction, Fuel Taxes, and Repeal ofEnvironmental Surcharge on Petroleum" This bill increases the motor fuel taxes by five cents and diverts one-half cent surcharge to the Centennial Highway Trust Fund. The revenue generated is approximately $63,250,000.
House Bill 414 - "Registration Fee on Vehicles" This bill increases the registration fee on vehicles. The revenue generated is approximately $16,500,000.
Legislative Action on Employee Compensation
State Employees
The Legislature approved a compensation package for employees of state agencies that represents a 3 percent funding increase. The package included funding to cover a 20 percent increase in dental premium rates, leave pool rate increase from 1.4 percent to 1.62 percent minor adjustments in health and dental insurance, retirement, and other employee benefits. State employees, after paying for benefit rate adjustments, will received a 2.67 percent salary increase as a cost-of-living adjustment.
Higher Education Compensation Funding
As with other State agencies, the Legislature authorized a 3 percent compensation increase for faculty and staff in higher education. For FY 1998, the Legislature decided to follow its policy for funding salary adjustments. The plan for financing the salary package would follow the same proportions as current funds in the operating budgets. In addition, any increases for employee health or dental benefits would be financed within the 3 percent appropriated for compensation adjustments.
The effect of this action on higher education is that approximately 75 percent of the cost of providing a 3 percent salary increase or $9,975,800 came from state funds. The remaining 25 percent of the cost is expected from tuition revenue or other institutional savings.
Since the close of the FY 1997 General Legislative Session, a 3.8 percent tuition increase was adopted by the Board of Regents. The tuition revenue from the rate increase combined with the appropriation of state tax funds for compensation will provide sufficient funding for an average 3 percent increase in salary and salary driven benefits plus a 5 percent increase in health and dental benefits. In contrast, for FY 1998, State employees, after paying for benefit rate adjustments, received a 2.67 percent salary increase.
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 1997 Legislature provided a 3.0 percent increase in the value of the weighted pupil unit for FY 1998. 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 $1.7 million for FY 1998 which provides for added compensation for those participating in the Career Ladder Program. In other action, the Legislature provided $3,000,000 for teacher supplies and materials. While this funding is not direct funds for compensation purposes they do have some correlation.
Executive and Judicial Officials
The Legislature increased the salaries for elected officials and judiciary as indicated below.
FY 1998 Approved
% Change
FY 1997 Actual
Position
Elected Officials
$85,200
Governor
$87,600
2.8%
66,200
Lieutenant Governor
68,100
2.8%
71,700
Attorney General
73,700
2.8%
68,400
State Auditor
70,300
2.8%
66,200
State Treasurer
68,100
2.8%
Judiciary
98,500
Associate Justice, Supreme Court
99,500
1.02%
94,050
Appellate Court
94,950
0.96%
89,550
Trial Court
90,450
1.01%
89,550
Juvenile Court
90,450
1.01%
Appointed Officials
The Legislature increased the minimum and maximum rates of the Executive Compensation Plan for appointed officials (department directors) by 2.8 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 allow all legislators the option of per diem allowance for hotel expenses in Salt Lake City during session or interim meetings.
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