Utah Gets Tax Boost From Hollywood, Cuts Forecast Gap to a Fifth

Utah’s anticipated 2010 budget deficit is as much as a fifth of projections, as revenue was boosted by tourism including taxes paid by moviemakers.

The state’s deficit is forecast to be $28 million for the fiscal year that ended June, below previous projections of as much as $150 million, according to preliminary figures released by the governor’s office. The estimate contrasts with states across the U.S. who are battling record budget gaps. Utah will publish final numbers in November.

Republican Governor Gary Herbert froze hiring and cut state agency spending by 3 percent, or $20 million, after his election in November, his spokeswoman, Angie Willis, said in a telephone interview. State tourism reached near-record levels in 2009, contributing $625 million to state tax revenue, Willis said.

“While a $28 million shortfall certainly isn’t where we want to be, it shows that our efforts have positioned us much better than we anticipated even a few months ago,” said Herbert yesterday in a statement.

Last month, Adobe Systems Inc. announced it would build a technology campus in Utah. The San Jose, California-based software company may increase the state’s tax revenue by $134 million over 20 years, Willis said.

Two movies were filmed in Utah this year; “127 Hours,” directed by Danny Boyle, who made “Slumdog Millionaire,” and Walt Disney Co.’s production of Edgar Rice Burrough’s “John Carter of Mars.” They contributed $30 million to state and local budgets, Willis said.

Across the U.S., state-budget deficits will rise to a record $260 billion through fiscal 2012, according to a June report from the Center on Budget and Policy Priorities, a Washington-based research group.

To contact the reporter on this story: Ashley Lutz in New York at alutz@bloomberg.net