Legislative Session and Budget Update

The Legislative appropriations subcommittees have finished their hearings and new revenue estimates have been released. Here is an update on the session and our state budget challenges.

First, a brief bit of recent history. Our base budget for this fiscal year (2010) was reduced by 17% and then built back up to nine percent with federal stimulus funds, for this year only. In December, the Governor reduced our base budget by an additional three percent and then, relying on the most current state tax revenue estimates available to him at the time, put together a budget proposal for next year (2011) that would keep all the colleges and universities at nine percent down. (His proposal is based mostly on one-time state funds and has the effect of extending the federal stimulus funding for one more year.) Last month, in the first days of this legislative session, the Legislature took the base budgets for all colleges and universities from 17% to 19% down.

February tax revenue estimates (official estimates used to complete state budget work) are out and unfortunately project that tax revenues will be $50 million less next year than what was projected from last December (when the Governor put together his budget proposal). It is not all bad news--although the December estimates projected stronger growth for next year than is projected in the estimates released this week--the current estimates still project tax revenues will grow in fiscal year 1011 by $140 million over fiscal year 2010. Maybe we have hit the bottom and are starting back up, albeit more slowly than hoped.

Based on state tax revenue estimates released this week the Executive Appropriations Committee voted on a plan to reduce the budgets of all colleges and universities by an additional five percent--we understand this five percent to be on top of the 17% for a total cut of 22%. This is apparently our bottom-level starting point for building next year's budget. From now until March 11th, the last day of the legislative session, the Governor and legislative leadership will be working to find sources of funding, including rainy-day funds, that they can use to reduce the 22% budget cut. We don't know yet where we will land but apparently the floor has been set at 22% and the ceiling is somewhere around 12 or13%. We have reason to hope that ultimately our final budget next year will only be down by 15 to 17% over where we started a couple years ago.

To keep all these numbers in perspective back at home, we have implemented a budget plan for next year at Snow College that is approximately 16% down.

We are at the low point for this coming year; things are bound to improve from here. Governor Herbert remains committed to help us and in the legislature we have many sympathetic friends.