In the closing days of each general session, the Legislature finalizes the state budget, including making final budget allocations to the current fiscal year and starting allocations for the upcoming fiscal year (to be finalized in the following year’s legislative session). Finalizing state budgets is typically a delicate (and occasionally indelicate) political and fiscal negotiation between budget leaders in the Utah House of Representatives, Utah Senate, and the governor’s office. The process of finalizing the state budget plays an essential role in fulfilling the design of the Utah Legislature: generating consensus around policy decisions.

By constitutional requirement, the Legislature must balance the state budget – the amount of approved expenditures for any fiscal year must not exceed the amount of tax and other revenue collected by the state. To determine how much the Legislature is authorized to budget in any legislative session, fiscal experts in the legislative and executive branches coordinate to establish consensus revenue estimates for current and future fiscal years.

For the 2022 legislative session, state spending approved for the current fiscal year (July 1, 2021-June 30, 2022) totaled $27.7 billion, while the starting level of spending approved for the upcoming fiscal year (July 1, 2022-June 30, 2023) is $26 billion.

The legislation produced by budget negotiations includes general budget legislation (appropriations bills), legislation with significant impacts on state spending or revenue (fiscal notes) and bills authorizing new state debt (bond bills).

Appropriations bills

An appropriation occurs when the Legislature authorizes an expenditure or financial obligation for state government. Some legislation – called appropriations bills – are drafted solely for the purpose of authorizing appropriations, without attached policy or program reforms.

By legislative rule, most appropriations bills must be available to lawmakers on the last Monday of the legislative session and passed by the 43rd day of the legislative session. However, legislative rules require the final appropriations bill to be passed by the last (45th) day of the legislative session.

In addition to establishing general budget amounts for things like public schools, highway patrol and freeway construction/maintenance, appropriations bills can allocate money for specific policies or programs established by normal legislation that have significant fiscal notes.

Fiscal notes

Every piece of legislation, after it is introduced, is analyzed for any potential impact on state revenues or expenditures by the legislative fiscal analyst’s office. After getting input from impacted state agencies and others with relevant information or insight, the fiscal analyst will estimate a policy reform’s impact on state revenues or expenditures and attach that estimate to the bill in the form of a fiscal note.

Legislation with significant fiscal notes – defined as having a fiscal impact greater than $10,000 – that passes out of the legislative body in which it originated must be held back from a final floor vote in the opposite legislative body until the next-to-last (44th) day of the session. Bills with significant fiscal notes whose funding gets prioritized according to the process established by legislative leaders must then be passed (or not) on the 44th day of the legislative session.

Bond bills

A bond bill authorizes the state to issue new state debt, in the form of state government bonds. This is often used to fund state projects that are expensive and create long-lasting assets, such as expansion of I-15 or new construction of state buildings. By legislative rule, bond bills must be available to lawmakers on the last Monday of the legislative session and be passed or defeated by the end of the 43rd day of the session.

Often, the debate around bond bills focuses on whether (or how much) to pay for such projects with available taxpayer revenue versus new debt. This debate is, in part, driven by the fact that Utah has a constitutional limit on the amount of debt the state can carry, based on the value of taxable property within the state.

Conclusion

Finalizing the state budget is one of the primary duties and roles of the Utah Legislature. Fulfilling that duty often requires negotiation, compromise and dialogue (in public and private) that will often determine which bills will or will not become law.

The regular result of state budget negotiations in Utah is to generate the consensus necessary to produce legislation that will pass the Legislature and not be vetoed by the governor; the general legislative session has not experienced a serious threat of ending without a final state budget for nearly 20 years. In short, whatever anyone’s preference or position on the particulars of any state budget, the civic fact is that the Legislature’s budget process accomplishes its goal: ensuring the state has a final, approved budget.