Estimates show extra $638 million in budget next year; money could fund Medicaid, prison plans

Higher tax collections will give Utah lawmakers an extra $638 million to spend on projects and programs next year, according to new estimates released Thursday.

Legislators will have $313 million to spend on one-time projects such as construction, and $325 million for ongoing programs.

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Much of the money comes from increased tax collections from individuals and corporations in particular. That signals Utah's economy is doing well, said Logan Republican Sen. Lyle Hillyard, co-chair of the Legislature's main budget committee.

In a statement Tuesday, Gov. Gary Herbert credited the growth to the state's business-friendly and conservative policies.

The projections change the roughly $13.5 billion budget by less than 5 percent.

Hillyard said the extra money will allow lawmakers to tackle some of the pricey projects they're expected to take up next year, including reforms to the criminal justice systems, Medicaid expansion and relocating a state prison.

"Now we're going to be able to address some of the issues. When you look at some of the costs that we're looking at, this money will go pretty quickly."

That's on top of annual costs such as repairing roads and bridges and paying for additional students in public schools.

Hillyard said Utah is projected to have an additional 8,000 students enrolled in public schools next year.

The new figures come days before Herbert is set to roll out his budget priorities for the upcoming year.

Lawmakers will finalize the budget when they meet for their annual session in January.

Among the items they'll consider is a plan to relocate a state prison in Draper and a package of reforms to Utah's criminal justice system. Those each come with potential price tags of about $500 million.

Lawmakers are also expected to consider whether they'll expand health coverage for thousands of poor Utah residents.

Under President Barack Obama's health care law, the federal government has offered to help pay most of the cost if states allow more people to be eligible for Medicaid.

Herbert has instead proposed using that federal money to enroll people in private health plans, which would cost the state about $5 million in 2016 and up to $90 million three years later.

Lawmakers also are kicking around other plans that could cover fewer people and cost anywhere from $21 million to $155 million annually.