Seven weeks ago I started my legislative articles with an overview of the financial situation the Legislature would face at it crafted the new state budget.
The column highlighted the slow but steady revenue growth Utah has experienced over the past year, but also suggested that we needed to be very cautious about overextending ourselves.
I worried that after enduring so many years of pinching our pennies, the revenue growth would feel like a windfall and the urge to spend would be difficult to resist. I believe that the recession reminded us of many important lessons that we might have failed to keep ever-present in our minds when building budgets.
Fiscal responsibility is more than just a political catch phrase. The fiscal shape of our state sets the tone for our personal fiscal wellness as citizens. A sate budget is no different than a family budget. The scale might be larger, but the same principles apply.
The best guarantee against future economic crisis is to ensure our budgets are sustainable.
With the lessons of the recession in my mind and $13 billion in state budget funding decisions before us, I decided to examine how we appropriate road funds. Traditionally, the building of roads are funded by the issuance of bonds. Think of these bonds like the state's home equity line of credit.
We have a certain amount of credit based on our assets and credit worthiness. Just like a HELOC, it is never a good idea to exhaust your credit limit. Currently the state has $2.2 billion in outstanding bonds that have been issued for I-15 reconstruction and other major projects.
Due to the drop in construction costs, innovative bridge building techniques developed by Utah Department of Transportation, and other cost-saving mechanisms the state has been able to save millions on the projected costs of projects currently in the pipeline.
I am sponsoring House Bill 173, Transportation Funding Modifications, which will reduce our state bonding authorization for roads by $130 million. Essentially, this will mean we are self-imposing a lower credit limit so we eliminate the possibility of overextending ourselves with road debt.
Rather than have outside financial entities or economic circumstances dictate our credit, we can look at our spending, budgets, and future needs and self-regulate a credit limit that doesn't overburden us.
The bill also gives UDOT increased flexibility to move funding around within its budget for various projects by extending the road budget process out for a period of three fiscal years. Often projects on the list are in different phases of readiness due to design, environmental impacts and other factors.
This will also allow UDOT to move projects ahead that are shovel-ready over other projects that still need design; gaining some of the lower construction costs and other savings with the flexibility.
It is anticipated that with this flexibility, UDOT will be able to complete additional transportation projects while at the same time reducing our overall bonding debt.
I truly believe that the best guarantee against future economic crisis is to ensure that our budgets are sustainable. We can never forget the importance of living within our means and developing strategies to be self-sufficient.
Brad Dee is the House majority leader. He represents House District 11, which covers portions of Davis and Weber counties.