SALT LAKE CITY - In the southwest corner of Utah where scenic red rock formations have drawn tourists from around the world for decades, longtime residents are beginning to notice something different.

The tourists aren't leaving.

"We're growing at the rate of a thousand new residents per month," said James Eardley, Washington County board of commissioners chairman. "There's people coming from everywhere. We've kind of been discovered."

So has the rest of Utah.

The Beehive State had the nation's fifth fastest growing population in 2005, according to Census figures, creating a need for more roads, schools, housing, services, businesses - essentially, more everything.

"The growth in 2005 was unexpected and it was quite dramatic," said Robert Spendlove, Utah director of demographic and economic analysis.

That growth defined nearly every aspect of Utah life from St. George to Sandy and is showing little sign of slowing down as 2006 begins, presenting a host of challenges - and opportunities- for those planning for Utah's future.

The state grew by 3.2 percent, to 2.5 million people, in the past year, giving it the single largest population increase in its history.

Spendlove is forecasting Utah's population will increase by 2.9 percent in the new year. Much of that growth will be from newcomers moving into the state and not just because of the state's high birth rate, he said.

"This population growth is due to a strong state economy. Our employment growth is over twice the national rate," Spendlove said.

A vibrant economy is spurring Utah lawmakers to consider increasing state spending while also providing tax cuts in the upcoming legislative session.

State economists are projecting Utah will end this fiscal year with a record $344 million in surplus revenue.

Gov. Jon Huntsman's $9.6 billion budget proposal for fiscal year 2006-2007 sets $60 million in tax cuts. The proposal is part of an overhaul of the state's tax code that would drop the income tax rate most Utahns pay from 7 percent to 5 percent and could include a repeal of the sales tax on food.

A legislative task force that has studied Utah's tax code is recommending a similar rate change, although Speaker of the House Greg Curtis, R-Sandy, has said the GOP-controlled House would like to see a larger tax cut.

However, many local governments are also realizing that growth often comes with a price tag.

Utah County was the state's fourth-fastest growing county in the past year and Grover said growth isn't paying for itself as the county strives to provide additional services to a rapidly expanding population.

"There are more people on the roads, more mentally ill people in the system, more substance abuse, more criminals in our jail," said Utah County Commission Chairman Jerry Grover.

But growth has its positive side, too, he said.

"One of the benefits is jobs. People who want to stay here can. Twenty years ago, unless you wanted to work for BYU, the government or Geneva Steel, you didn't have too much opportunity. Now it's pretty diverse," he said.

Developers are taking notice of the Wasatch Front's growth, too.

Kennecott Land announced plans this year to develop 75,000 acres in the West Bench area of the Oquirrh Mountains over the course of the next 50 years. When fully developed, it will be twice the land area of San Francisco and be home to about 500,000 people.

If the entire development were to incorporate as a single city, it would be Utah's largest.

The Salt Lake County Council of Governments is working closely with Kennecott to plan the development in a way that builds more walkable communities, unlike much of the sprawl that's engulfed the Salt Lake Valley in the past 30 years.

Regional planners say they can't stop the impending growth, but they can better plan ahead for it.

Much of Utah is still playing catch-up on past growth, especially when it comes to accommodating a changing student population.

The Granite School District decided this year to close two elementary schools, but is still looking to build two or three more schools to accommodate the fast-growing western side of the district.

"As property and home values increase, that reduces the number of young new families that move in. Those homes are replaced by new buyers who don't bring numbers of children in," said Granite spokesman Randy Ripplinger. "On the west side of valley there's greater opportunity for new development and starter homes for new families."

In suburban Tooele County, administrators are filling up schools nearly as quick as they build them.

"We've been in building progress since 2000. We've almost opened a school up ever year," said Tooele County Superintendent Mike Johnsen.

The school system has about 11,800 students, and Johnsen said he's expecting to grow by another 4,000 in the next five to seven years.

Johnsen said the district is considering going through a bond process to fund the construction of a new high school, which would be the district's fifth.

"The growth is just coming. We have a high birth rate and have a high (in migration) rate. It's just the nature of the state," Johnsen said.