LONG-TERM STATE BUDGET CHALLENGES

LONG-TERM STATE BUDGET CHALLENGESLEGISLATIVE POLICY SUMMITDECEMBER 17, 2013

PROPOSED GASB STANDARD

12/17/2013Utah Legislative Fiscal Analyst 2

PAST IS PROLOGUE…


UTAH BUDGET – GF/EFBY AREA OF EXPENDITURE

$0$1$2$3$4$5$6$7

2004

2005

2006

2007

2008

2009

2010

2011

2012

13 R

evise

d

14 A

ppro

p

Billi

ons

Fiscal Year

Executive Appropriations

Retirement & Independent Entities

Public Education

Natural Resources, Agriculture, &Environmental Quality

Higher Education

Social Services

Business, Economic Development, &Labor

Infrastructure & General Government

Executive Offices & Criminal Justice


RAINY DAY FUNDS

$0$50

$100$150$200$250$300$350$400$450$500

2005 2006 2007 2008

Balances – in Millions

EducationGeneral



$0

$1

$2

$3

$4

$5

$6

$7

2004 2005 2006 2007 2008

Billi

ons

Fiscal Year



Public Education


Higher Education

Social Services





Source: 2012 Comprehensive Annual Financial Report, Utah Division of Finance, Oct. 19, 2012, p. 6.

$434



$0$1$2$3$4$5$6$7

2004

2005

2006

2007

2008

2009

2010

2011

2012

13 R

evise

d

14 A

ppro

p

Billi

ons

Fiscal Year



Public Education


Higher Education

Social Services






Source: 2012 Comprehensive Annual Financial Report, Utah Division of Finance, Oct. 19, 2012, p. 6. 12/17/2013Utah Legislative Fiscal Analyst 11

52%

74%

87%

82% 80%

71%61%

51%

43%37%

31%

25%19%

‐

1

2

3

4

5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Billion

sEstimated Outstanding Debt and Constitutional Debt Limits

DRAFT

Constitutional Debt Limit Available Debt 85% Existing Debt

Existing Debt

15% Reserve

Constitutional Debt Limit

Current Constitutional Debt Limit

12

TRANSPORTATION INVESTMENT FUNDEXPENDITURES

Debt, 52%

Projects, 48%

$717 m




0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Billion

sTransportation Related Cash Inflow and Cash Outflow

Transportation Cash Inflow Transportation Cash OutflowTransportation Cash Inflow Projection Transportation Cash Outflow Projection

16

BORROWING FOR PROJECTED OUTFLOWS

52%

74%87%

82% 80%71% 61%

51%43%

37%31%

25% 19%

‐

1

2

3

4

5

6

7

8

9

10

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Billion


DRAFT

Constitutional Debt Limit Available Debt 85% Existing Debt New Debt with Trend Expenditures

Existing Debt

15% Reserve

New debt with trend expenditures

17

PROJECTED OUTFLOWS, LIMIT INDEXED FOR POPULATION CHANGE

52%

74%87%

82% 80%71% 61%

51%43%

37%31%

25% 19%

‐

1

2

3

4

5

6

7

8

9

10

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Billion


DRAFT

Constitutional Debt Limit Available Debt 85% Existing Debt New Debt with Trend Expenditures Debt Limit with Population

Existing debt

15% Reserve

New debt with trend expenditures

Constitutional debt limit

Debt limit with population growth

18

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

TransportationInvestmentFundCashInflowProjections

Salestax SalestaxprojectionMotorVehicleRegistrationFees MotorVehicleRegistrationFeesProjectionAllOtherTIFRevenue AllOtherTIFRevenueProjection

Note: The drop in sales tax in FY 2011 is due to a decline in the 8.3% earmark to 1.93% for FY 2011 only; the increases and decreases in the "All Other TIF Revenue" is due to budgeting changes made to the Critical Highway Needs Fund; the diagonal growth in sales tax for FY 2013 onward is due to SB 129 of the 2011 Veto Override Session, which prioritizes 30% of sales tax growth to the TIF

CAUSE AND EFFECT (GOV’S BUDGET)

Gen Rev Earmarks Costs

+$88 m -$44 m -$134 m

Transfer $90 m GF from Education





SPENDING TO ACHIEVEMENT


EDUCATIONAL ATTAINMENT OF CAREGIVER TO ACHIEVEMENT


SINGLE PARENT HOUSEHOLDS TO ACHIEVEMENT


• State revenue per student: 0.0007 (about $900 million to increase NAEP scores 1 point)

• Federal revenue per student: 0.0018 (not statistically significant)

• Local revenue per student: 0.0006 (about $1 billion to increase NAEP scores 1 point)

• Educational attainment: 0.2867 (every % increase in percentage of adults with bachelors degree represents a 0.2867 increase in NAEP scores);

• Single parents: -17.9258 (every % of households headed by a single parent decreases the score by almost 18 points)

RANDOM EFFECTS PANEL REGRESSION RESULTS

Source: 2013 Comprehensive Annual Financial Report, Utah Division of Finance, Oct. 23, 2013, p. 6.


RAINY DAY FUNDS

$0$50

$100$150$200$250$300$350$400$450$500

2008 2009 2010 2011 2012 2013

Balances – in Millions

EducationGeneral


Documents

LONG-TERM STATE BUDGET CHALLENGES