FY 2013 Budget Recommendations

GOVERNOR GARY R. HERBERT

DECEMBER 12, 2011

VISION FOR THE STATE

VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Utah will lead the nation as the best performing economy and be recognized as a premier global business destination

OVERVIEW
GENERAL FUND/EDUCATION FUND ONGOING REVENUE
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Total State Budget (includes federal funds)

$12.9b

General Fund/Education Fund (state tax dollars only)

New FY 2012 GF/EF One-Time

$5.1b
$128.2m

EDUCATION JOBS ENERGY UTAH SOLUTIONS

New FY 2012 GF/EF Estimate

$279.5m

Source of State Funds

GENERAL FUND AND EDUCATION FUND: FY 2013
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Income Tax 51.1%

Unrestricted Sales Tax 31.4%

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Oil/Gas/Metal Severance Tax 1.9% Tobacco & Beer Taxes 2.5% Corporate Franchise Tax 5.4% Other Funds 7.7%

Source of All Funds

ALL SOURCES OF FUNDING: FY 2013
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Income Tax 20.1% Federal Funds 27.6% Fees & Licenses 18.5% Unrestricted Sales Tax 12.4%

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Gas Tax 2.8% Corporate Franchise Tax 2.1% Local Property Tax 4.6% Other Funds 9.0%

Transportation Earmarks 2.9%

Uses of State Funds

GENERAL FUND AND EDUCATION FUND: FY 2013
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Public Education 49.4% Higher Education 14.8% Other 7.8% Medicaid 8.8%

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Corrections & Public Safety 8.2%

Other Social Services 8.1%

Capital/Debt 2.9%

Uses of All Funds

ALL SOURCES OF FUNDING FY 2013
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Higher Education 10.7%

Public Education 28.2%

Medicaid 17.6%

Other Social Services 17.0%

Other 8.7% Capital/Debt 10.9%

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Corrections & Public Safety 4.2%

Transportation 2.6%

CONSENSUS REVENUE
HISTORIC REVENUE ESTIMATES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

$5.5 $5.0 Billions $4.5

$4.1 $4.9

$5.3

$5.2 $5.0 $4.6 $4.2 $4.7

$4.8

$4.0
$3.6

EDUCATION JOBS ENERGY UTAH SOLUTIONS

$3.5 $3.0

BUDGET ON PRINCIPLE
THE FOUNDATION FOR ECONOMIC PROSPERITY
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

PAY AS WE GO LIVE WITHIN OUR MEANS AVOID EXCESSIVE DEBT PREPARE FOR A RAINY DAY

EDUCATION JOBS ENERGY UTAH SOLUTIONS

BUDGET ON PRINCIPLE
THE FOUNDATION FOR ECONOMIC PROSPERITY
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

NO NEW TAXES
ELIMINATE STRUCTURAL IMBALANCE ($52m) MAINTAIN RAINY DAY BALANCE ($232.5m)

EDUCATION JOBS ENERGY UTAH SOLUTIONS

MAINTAIN AAA BOND RATING

FOUR CORNERSTONES
ESSENTIAL FOR RETURN TO ECONOMIC PROSPERITY
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

EDUCATION
JOB GROWTH

ENERGY
UTAH SOLUTIONS

EDUCATION JOBS ENERGY UTAH SOLUTIONS

1st CORNERSTONE

EDUCATION
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

An educated workforce is critical for a prosperous economy

EDUCATION JOBS ENERGY UTAH SOLUTIONS

GOAL: 66% of adult Utahns will have a post-secondary degree or professional certification by 2020

1st CORNERSTONE

EDUCATION
POLICY PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Reading proficiency by end of 3rd grade Increase post-secondary course completion for high school students Align education with workforce and marketplace demands TOTAL: $3.25b for public and higher education combined

1st CORNERSTONE

EDUCATION
BUDGET PRIORITIES PUBLIC EDUCATION
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

$111m new funds for public education, maintain base ($2.5b)

Public education growth, $40.6m

Early intervention programs, $10m

EDUCATION JOBS ENERGY UTAH SOLUTIONS

1st CORNERSTONE

EDUCATION
BUDGET PRIORITIES PUBLIC EDUCATION
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Expand online career counseling through utahfutures.org, $500k

Expand individualized student technology, $12m Charter school startup funding, $2m Raise WPU 1% to increase teacher salaries

EDUCATION JOBS ENERGY UTAH SOLUTIONS

1st CORNERSTONE

EDUCATION
BUDGET PRIORITIES HIGHER EDUCATION
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

$23m new funds, maintain base ($750m) Higher education growth, $3m

Performance measures, $5m

Additional 20 medical school student slots, $6.5m

EDUCATION JOBS ENERGY UTAH SOLUTIONS

2nd CORNERSTONE

JOBS
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Accelerate private sector job creation

EDUCATION JOBS ENERGY UTAH SOLUTIONS

GOAL: 100,000 jobs in 1,000 days

2nd CORNERSTONE

JOBS
POLICY PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Strengthen and grow existing Utah businesses, both urban and rural
Increase innovation, entrepreneurship, and investment Increase national and international business Prioritize education

EDUCATION JOBS ENERGY UTAH SOLUTIONS

2nd CORNERSTONE

JOBS
BUDGET PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Reduce unemployment insurance rate; employer tax decrease of $26.4m Expand Business Expansion and Retention (BEAR) program to all rural counties, $300k Business recruitment, $500k Workforce job search, training, and retraining, $20.5m
Example: Accelerated Credentialing to Employment (ACE) program for Veterans ($1m)

3rd CORNERSTONE

ENERGY
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Innovation + Initiative = ENERGY INDEPENDENCE

EDUCATION JOBS ENERGY UTAH SOLUTIONS

GOAL: Ensure access to affordable, reliable and sustainable energy

3rd CORNERSTONE

ENERGY
POLICY PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Responsible energy resource development

Policies and practices to improve air quality Innovation for energy efficiency and development

EDUCATION JOBS ENERGY UTAH SOLUTIONS

3rd CORNERSTONE

ENERGY
BUDGET PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES

Energy Development Office, $700k

Appropriate public land access
Reasonable permitting

CORNERSTONES:

EDUCATION JOBS ENERGY UTAH SOLUTIONS

Aggressively pursue innovations for energy efficiency and development

4th CORNERSTONE

UTAH SOLUTIONS
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Continue to find Utah solutions for Utah problems

EDUCATION JOBS ENERGY UTAH SOLUTIONS

4th CORNERSTONE

UTAH SOLUTIONS
POLICY PRIORITIES
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

Medicaid, additional $156.5m (total=$448m from GF) Supplemental funding for State Parks, $2.8 m

EDUCATION JOBS ENERGY UTAH SOLUTIONS

$30.6m new money for Public Safety and Corrections (total=$412.6m)

$60m new money for transportation, infrastructure maintenance

FOUR CORNERSTONES
ESSENTIAL FOR RETURN TO ECONOMIC PROSPERITY
VISION OVERVIEW CONSENSUS REVENUE PRINCIPLES CORNERSTONES:

EDUCATION
JOB GROWTH

ENERGY
UTAH SOLUTIONS

EDUCATION JOBS ENERGY UTAH SOLUTIONS