Budget uncertainty continues
Friday , January 25, 2013 - 1:01 PM
Each year in the weeks leading up to the annual legislative session, I’m asked by constituents and civic groups what the hot issues are going to be this year. Some years the questions is more easily answered than others. If you had asked me this question in the fall, I might have listed a number of items ranging from Medicaid expansion to class-size reduction to economic development programs. Now I answer the question with one topic: the budget.
This shift in focus is due to a tremendous change in the state’s revenue projections over the last quarter. In the fall it seemed we had reached a level of fiscal security that would allow the Legislature to move from its recession-driven budget focus to other policy areas. Early revenue projections estimated that the economic recovery had generated $300 million in additional revenues over the 2012 budget. This number represented modest growth, but after many years of cuts, it was welcome news.
However, during the holiday season as Congress and the president engaged in a dangerous game of economic chicken over the fiscal cliff, our state’s revenue projections plummeted as consumer confidence and budget uncertainty griped the country.
Our positive $300 million in revenue growth became a negative $200 million in a matter of just one quarter. The half measure cliff compromise and the unresolved items like the debt ceiling and automatic spending cuts have left us in a precarious budget position. The best guess of our fiscal analysts is that when the legislative session starts, the Legislature will be somewhere in the range of $50 million to the positive or $50 million to the negative.
All these budget fluctuations might not be so bad if we had enough time to track the trends and wait out the maneuverings in Washington, D.C. Unfortunately, we don’t have that kind of flexibility in our state legislative calendar and the federal budget shenanigans Congress uses just don’t work here. Our state’s constitution dictates a 45-day session to pass and balance a budget. The clock starts on the fourth Monday in January and ends at midnight on March 14. Congress has kicked the can down the road to March 1, which leaves us two weeks to assess the impact of any deal they may come up with.
The variables are too many and too complicated to guess the ultimate impact on Utah’s budget. We have an $11 billion state budget that pays tens of thousands of employees and provides services to over 2.8 million Utahns. Everything from supplies in the classroom to road maintenance to health care for our poor and disabled hangs in the budget balance of what the feds will or won’t do or pass back to the state to absorb.
Rest assured legislators are just as exasperated with Congress and the budget situation as you are, but we are preparing to do the best we can with this tremendous amount of budget uncertainty. Each appropriations committee will begin the session with instructions to craft very conservative budgets for each department and to identify various scenarios for departmental budgets that can be plugged in quickly once we know what the budget total looks like.
We will err on the side of very conservative estimates for revenue. After all, it is much easier to add money to departments or programs than to cut what has already been approved. Stay tuned for budget updates throughout the session as we do our best to cover all areas of need while still living within our means.
Brad Dee is the House Majority leader. He represents House District 11, which covers portions of Davis and Weber counties.