2021 Session Recap - Budget and Taxes

Dear Friends and Neighbors,

Our 2021 General Legislative Session concluded and over 500 bills were passed this year. We also passed a budget, which is the most important work that we do every year. This newsletter is a summary of some of the legislation that passed. It is impossible to include everything here, so go to the legislative website, le.utah.gov, for more information. You can learn more about the budget at budget.utah.gov.

Budget

It is our Constitutional responsibility to pass a balanced budget each year. Early in the session, we pass smaller, bare bones base budgets to ensure our state continues running even if there is a breakdown during negotiations. Near the end of the session, the Legislature passes what is referred to as the “Bill of Bills,” which allows us to supplement the base budgets with expanded appropriations based on the latest revenue estimates shared mid-way through the session.

Our total state budget this year was a remarkable $23.4 billion, including both state and federal funding. In this recent session, the “Bill of Bills” was more specifically known as S.B. 3 Appropriations Adjustments.

Education

This year, the budget provided historic levels of education funding, with over half our state funds appropriated solely for public and higher education. This funding included providing $121 million for teacher and staff COVID-19 stipends, restoring a 6 percent (WPU) increase in per student funding and allocating $127 million for future education spending to ensure we keep our commitment to fund public education enrollment growth and inflation. After all is said and done, we will have put aside nearly half a billion dollars for public education ongoing funds. That’s half a billion dollars each year, every year, from now on.

Transportation and Infrastructure

The Legislature appropriated $1.1 billion for transportation infrastructure to be spent over the next several years to fund infrastructure projects in every corner and region of the state. Investing in roads and transit over several years will help limit new debt while reducing overall debt over time.

Medicaid

During the 2021 General Session, the Legislature fully funded Medicaid growth and inflation. At the same time, we fixed a $56 million structural imbalance in Medicaid expansion.

Taxes

We passed legislation that will provide $100 million in tax cuts to aid families, veterans and elderly citizens and will further boost Utah’s economic success.

Individuals and Families

The Utah Legislature passed three pieces of legislation that will provide approximately $100 million in tax relief to Utah citizens.

• S.B. 153 Utah Personal Exemption Amendments, restores part of the dependent tax exemption, which was reduced in the 2017 federal tax reform and increased taxes for many Utah families. In 2018, the Utah Legislature brought back a portion of the exemption and is now seeking to restore even more of the exemption to further reduce taxes for families.

• S.B. 11 Retirement Income Tax Amendments, targets men and women who served in the armed forces by eliminating individual income tax on military retirement pay.

• H.B. 86 Social Security Tax Amendments, eliminates income tax on some social security income, benefitting many Utah seniors living on a fixed income.

Businesses

Many businesses were hit hard by the pandemic and we have worked hard over the last year to provide targeted economic support to businesses throughout Utah with the CARES. This session we passed S.B. 25 Corporate Tax Amendments, which provide targeted relief to businesses that were negatively impacted by COVID-19. This bill allows businesses to carry back, for up to three years, a Utah net loss realized during 2020. The idea is if a business was profitable in the three years leading up to 2020, but then suffered a loss in 2020, it is likely due to the economic hardship brought about by the pandemic.

I Look Forward to Hearing From You!

I'll try to continually keep you informed about my work on the Hill – likewise, please keep in touch – I’d love to hear your insights and opinions.

I can be reached by email at dmccay@le.utah.gov. You’re also welcome to join me at the Capitol and if you’d like to meet with me in person outside of interim or the legislative session, you can reach Jason Gould at jgould@le.utah.gov. He’ll help us get in touch.

I’m truly grateful for the opportunity you’ve given me to serve in this capacity. We live in a unique and special place. Thank you for all you do to make Utah the best state in the nation – and thanks for paying attention.

Until next time,

Senator Dan McCay

Utah Senate District 11