Our focus during the annual legislative session is usually on individual bills, looking at the hundreds of policy changes that lawmakers are trying to make each year. However, one of the most important jobs of lawmakers is to craft and pass an annual budget for the State of Utah.
As Joe Biden attributed to his father: “Don’t tell me what you value. Show me your budget—and I’ll tell you what you value.” What lawmakers decide to fund or not fund in each year’s budget can tell you a lot about what they value and where their priorities lie for the future of our state.
FY 2026 Budget Overview
Lawmakers approved a $30.8 billion budget for the 2026 fiscal year (FY 2026), which runs from July 1, 2025 to June 30, 2026. All of this money comes from a variety of sources, including taxes on individual incomes, sales of goods and some services, and gasoline, to name a few.
The largest source of revenue for the annual state budget is federal funds, which provides 27% of the state budget, which fund specific federal programs and services. The second largest source of revenue, individual and corporate income taxes, fund public and higher education, and some services for children and Utahns with disabilities. The general fund, made up primarily of state sales taxes, makes up 12% of the state budget, and is the main source of revenue that lawmakers use to fund the various services and programs of the state government.
1. Social Services/Medicaid
As you can see from the chart above, the largest budget area in Utah is social services, at 34% of the state budget at about $10.4 billion, the majority of which goes toward funding Medicaid, a joint federal and state medical insurance program for hundreds of thousands of low-income pregnant women, children, and other Utahns. In FY 2024, statewide spending on Medicaid was $5.3 billion, of which $3.8 billion came from the federal government. Social services funding also covers programs such as SNAP ($618 million), a low-income food benefits program more commonly known as food stamps, homeless services ($153 million), and housing and community development ($82 million).
2. Public Education
Public education makes up the second largest piece of the state budget, at 28% or about $8.6 billion. Public education funding is much too complicated a subject for this simple blog post. That being said, public education is funded by both the State of Utah and local school districts through a combination of local property taxes and state budget appropriations. At the state level, lawmakers use a measure called the weighted pupil unit, or WPU, to calculate program costs and distribute funding to public schools. The WPU, combined with local property taxes, is the main source of revenue for teacher salaries and other public education needs.
3. & 4. Transportation And Higher Education
Transportation and higher education make up the third and fourth largest pieces of the state budget, at 13% ($4 billion) and 10% ($3 billion) respectively. Transportation funds, a large portion of which are made up of the gasoline tax and sales tax earmarks, mainly go toward highway capacity construction and maintenance programs. Higher education funds go toward supporting the 17 public universities, colleges, and technical colleges in Utah.
5. Other
The rest of the state budget, including law enforcement, state facilities construction, and all the various projects and programs funded by state lawmakers, make up the remaining 15% of the state budget, or around $4.6 billion.
Breaking Down Priorities
The annual legislative session only lasts 45 days, not nearly enough time for lawmakers to build an entire budget from scratch every year. That’s one of the reasons why lawmakers use “base budgets,” which are passed during the first ten days of the legislative session. Base budgets include a continuation of existing state government programs and services with funding generally at the same levels as the previous year.
After the base budgets are approved, lawmakers then have a much more limited pool of resources to work from and decisions to make in relation to the overall state budget. The amount of money that lawmakers have to make budget decisions with is a complicated process of forecasting revenue estimates with state and legislative fiscal analysts and economists, which are then compared against previous years revenue and spending.
Once revenue estimates are agreed upon, lawmakers can then choose to make increases or reductions to programs and services already passed in the base budgets, and/or choose to fund entirely new programs or services that have been requested by lawmakers, the governor, or outside interest groups. This is called the “appropriations” process, a task that lawmakers undertake as members of eight appropriations subcommittees, each of which review a portion of the base budget, as well as all the funding requests made under their specific focus of the state budget.
After meeting for a few weeks, these appropriations subcommittees make budget recommendations and prioritize funding requests, reports of which are sent to the Executive Appropriations Committee (EAC), which is made up of majority and minority leadership. The EAC prioritizes funding requests and makes decisions that ultimately are folded into the final budget bills of the legislative session, which are then voted on by all lawmakers.
What Was Funded In 2025?
Lawmakers approved $30 billion in spending as part of the base budgets passed at the beginning of the legislative session. Although mostly a continuation of prior spending, these base budget bills included some items already prioritized by the Executive Appropriations Committee, including “inflationary increases to Medicaid and education spending and $145 million deposited into the state’s ‘rainy day’ fund.” After revenue estimates were agreed upon, lawmakers were left with about $800 million to spend on different priorities this legislative session. Which priorities made their way to the top?
Lawmakers in the majority were most proud of the list of tax reductions they made this year, including a cut to the income tax rate for the fifth year in a row. Tax reductions must be “paid for” in the state budget because they reduce the amount of overall revenue that the government is taking in and could spend on government programs and services. We testified against the aforementioned income tax rate reduction during a committee hearing because the $97 million in annual state funding that was cut would otherwise be constitutionally required to be spent on education or services for children and Utahns with disabilities, areas of the state government that desperately need more investment. However, lawmakers did prioritize other beneficial tax reforms, such as expanding the child tax credit, instituting a new business tax credit for child care services, and expanding eligibility for the social security tax credit.
Education funding is one of the major areas where lawmakers can focus their discretionary spending each year. As noted above, lawmakers approved using $178 million in income tax revenue growth to fund a 4% increase in the WPU as part of the public education base budget bill, though that increase was mandated by Utah law to cover inflation. Lawmakers also used $47.4 million to fund a $1,275 salary increase for public school teachers and $45.2 million for a $1,275 bonus for support staff. Although it passed the Legislature, HB 100, which provides free lunches to K-12 students who are eligible for reduced-priced meals, received one-time funding of $2.5 million, and will have to secure funding for future years. And finally, lawmakers prioritized another $40 million in ongoing funding for the Utah Fits All Scholarship, Utah’s private school voucher program, resulting in over $120 million now being siphoned away annually from public schools to fund this program.
Highlights
It would take too long to cover every issue area and funding line item of the state budget, so here are some other highlights from what lawmakers approved this year:
- Lawmakers cut $60 million from the state’s universities and public colleges this year, with the highest cut ($19.6 million) coming from the University of Utah’s budget and the smallest cut ($1.7 million) coming from Snow College’s budget. These funds can be reallocated back to the universities and colleges as part of HB 265, a “strategic reinvestment” in “programs and divisions that merit additional investment.”
- To help with increasing instances of homelessness in the state, lawmakers appropriated $1.9 million in ongoing funds for a second family shelter in Salt Lake County and $5.5 million in one-time funds to support emergency winter and summer responses throughout the state.
- After hearing a lot about energy production throughout the legislative session as part of Operation Gigawatt, lawmakers appropriated $10 million for nuclear power development and $1.8 million for geothermal power development.
- $1.4 million was spent by lawmakers to propose two amendments to the Utah Constitution: SJR 2, which would raise the threshold for approval of ballot initiatives that raise taxes from a simple majority to 60%, and HJR 10, which would require proposed constitutional amendments to be published according to statute, rather than in print newspapers. Both will most likely appear on the ballot in November 2026.
- After having already allocated $20 million for public lands litigation in prior legislative sessions for lawmakers’ pipe dream to take over control of federal lands located in Utah, including $3 million in 2024, lawmakers appropriated another $680,000 for “federal lands litigation.”
- Despite the bill failing in committee, lawmakers ultimately used the budget to create a state Herbert Debate Commission, appropriating $300,000 each to Utah Valley University and the University of Utah to presumably take over the planning and hosting of political debates from the nonprofit and media-represented Utah Debate Commission.
- $100,000 was given to an anti-abortion nonprofit, ProLife Utah, and an additional $100,000 was given to Pregnancy Resource Centers in Utah, also known as crisis pregnancy centers.
What Wasn't Funded
As noted above, GOP lawmakers are making a conscious decision to slash income tax revenues each year, even though those new funds each year could go toward funding various needs, especially in public education and social services. But even if lawmakers decided to stop cutting taxes and reinstitute a progressive income tax rate, similar to the one proposed by Rep. Nate Blouin in S.B. 244 this year, many proposed programs and services that need funding would ultimately have to be left in the wayside—Governor Spencer Cox made over $2.2 billion in specific funding requests and lawmakers themselves made over $1.4 billion in appropriations requests. What were some of the funding requests that weren’t prioritized by the supermajority this year?
Let’s start with the number one priority of Utahns according to two recent statewide polls: housing affordability. Although not a request for new funding, Rep. Carol Spackman Moss’s bill, HB 286, would have created a dedicated revenue stream for the Olene Walker Housing Loan Fund, which helps to build and preserve affordable housing, by dedicating 25% of the net sales tax profits made on the sale of liquor to the Fund. However, the bill was unfortunately killed by the House Economic Development and Workforce Services Committee halfway through the session, and efforts to revive the bill were unsuccessful.
Highlights – What Wasn’t Funded
It would take too long to cover every issue area and funding line item of the state budget, so here are some other highlights from what lawmakers didn’t approve for funding this year:
- An $18 million request from Rep. Dailey-Provost for a new homeless health center for the Fourth Street Clinic
- A $150,000 ongoing request from Rep. Eliason to increase the capacity and effectiveness of the Office of Substance Use and Mental Health’s suicide prevention, intervention, and postvention efforts, and a $1 million ongoing request, also from Rep. Eliason, to continue funding for Utah’s statewide Live On suicide prevention campaign.
- A $3 million request from Sen. Luz Escamilla to help Centro Civico Mexicano and Centro de la Familia to help build El Centro, a new civic center that would offer economic development opportunities, child care for working families, and community gathering spaces.
- A $9.5 million request from Rep. Owens to increase the funding available for turf removal programs, and a $750,000 request, also from Rep. Owens, for Wetland Restoration and Management, to help remove phragmites from the Great Salt Lake.
- A $12 million request from Sen. Owens to build a new administrative and judicial building in Wayne County.
- A $4 million request from Rep. Shipp to build a pumping and transmission system for the Central Iron County Water Conservancy District, Cedar City, and Enoch City.
- A $450,000 request from Sen. Stratton to provide funding for the livestreaming of all court proceedings in Utah’s court system.
- A $1.35 million request from Sen. Weiler to support 211 Utah, which provides service navigation from the state and United Way to help low-income Utahns and Utahns in crisis access available resources.
What Do You Think?
What do you think about the legislative budget? Let your local legislators k now what you think here
Friendly reminder that legislators are people do; keep it kind!
