By Jami Palmer
The national recession is slowly creeping into Utah?s economy, darkening skies over the proposed legislative fiscal budget and raining on lawmakers” parades.
Governor Leavitt opted not to call a special session of the legislature to solve $177 million deficit in the state budget. Leavitt was concerned of the possible need to dip into the ?rainy day fund? to solve budget woes, but called for cuts in state agencies instead.
Leavitt proposed a first round budget cut of $80 million from state agencies. An additional round of budget cuts could draw between $20-$40 million to ensure the state?s budget.
Although Leavitt wants to avoid dipping into the ?rainy day fund?, a fund established for natural and economic disasters that could impact Utah, the fund could provide a potential solution to cover remaining shortage, according to John Massey, Legislative Fiscal Analyst.
Utah lawmakers anticipated the economic slowdown in Utah during the legislative session, last Spring, and tried to counter its effects.
Senate Majority Whip John Valentine, R-Utah County, said the legislature had tried to adjust potential budget problems due to the softer economy in the session itself.
?Projections weren?t as rosy as we had originally thought,? Valentine said.
?The economy was slowly sagging throughout the summer and the terrorist attacks brought it to the sharp point of the sag,? he said.
However, Valentine believes that the recent increase in the stock markets are lead indicators that the economy could be six to nine months out of bouncing back.
Senate Chairman of the Appropriations Budget Committee Leonard Blackham, R-Moroni, Sanpete County, believes their could be additional reduction if the economy worsens.
?I think it is very questionable right now depending upon how the terrorism situation proceeds,? Blackham said.
The influx of thousands of people for the Olympics could increase Utah?s economic status for a time, but could lead to a fall-off in the following year.
House Democratic Assistant Majority Whip Brad King, D-Carbon and Emery County, said that traditionally after a Winter Olympics, most host cities see a small dip in their economy.
King said the proposed Democratic budget provides for some economic stimulus parts that will address the dip caused by the Olympics.
