A parade float going down Salt Lake's Main Street.

Legislature Considering Budget Cuts Because of COVID-19 Pandemic

davidwicaiBlog, Legislature

Legislative leaders have canceled all new funding approved during this year’s general session as they respond to the economic mayhem of stay-at-home orders and business closures.

Additionally, the legislative leaders from both parties that makeup the Executive Appropriations Committee have instructed subcommittees to recommend additional cuts of 2, 5 and 10 percent to the base budgets of state agencies. The subcommittees will meet the week of May 26-29 to determine those recommendations, which will likely be considered by the full Legislature during a special session in mid-June.

In practical terms, here is what these steps mean for employees and those we serve.

New funding canceled: This was foretold during the recent special session, so it’s not a surprise. Most of this funding was for Fiscal Year 2021, which begins July 1, so these aren’t cuts in the technical sense.

The canceled funding includes a new Cultural Stewardship program and full-time employee in State History, a full-time exhibition design employees for the new Museum of Utah, an additional $1 million one-time for arts grants, and funding for the World War 2 Commission.

Other funding that will be canceled will impact the communities and organizations served by our divisions. A full list of the funding that will be canceled can be found on the Legislature’s website.

Recommended cuts: The appropriations subcommittees will have to prepare recommendations for the Executive Appropriations Committee that makes targeted cuts of 2, 5 and 10 percent. It’s tough to gauge how deep legislators will decide to cut primarily because it’s nearly impossible to predict what will happen in the next few weeks with the virus. While it seems highly likely that they will make at least the 2 percent cut, it feels equally unlikely they will cut 10 percent immediately.

Other factors could also impact legislative thinking when it comes to cuts, such as the early retirement incentives being offered to state employees. There is also a chance that another federal stimulus package will pass, although that seems like a long-shot at this point.

Construction: Legislators have authorized bonding for construction projects currently paid for with cash, which could give them up to $200 million to shore up the budgets. If the new museum project were included in those bonds, it would keep the project on its current timeline. However, it’s unclear if legislators want to bond for projects or if they prefer to simply delay them to see the longer-term economic impacts.

Next steps: The appropriations subcommittees will begin meeting May 26 and will give a clearer idea of potential cuts. The state will also likely have a better grasp of how deep the economic impacts will be when these meetings start. Interim committees are scheduled for mid-June, at which time legislators will also likely meet for another special session to make final decisions on the budget cuts.