SALT LAKE CITY -- What happens if state and local agencies lose a major share of federal funding? That's an issue a state commission is aggressively tackling.
Members of the Federal Funds Commission, a state-appointed group, laid the groundwork Tuesday to put together a risk-management plan to deal with the potential implications of a loss of federal funding.
Members of the 13-person commission voted to address four areas where the loss of federal funds is likely to manifest itself most significantly in the future: health and human services; public safety and corrections; education; and local government.
Working groups approved for each of the areas are charged with the task of looking at the potential impact of funding. They are to also begin considering some alternatives.
The issue of the loss of federal funds is hardly a small one, said Commission Chairwoman Sen. Deidre Henderson, R-Spanish Fork, who said 40 percent of the state funding comes from the federal government, and with the federal government borrowing 40 cents on every dollar spent, current appropriation levels are unsustainable.
A portion of the commission meeting was spent looking at how one local administrator dealt with a loss in funding at the municipal level.
West Jordan City Manager Rick Davis shared details of how community officials in Fountain Hills, Ariz., dealt with a loss in funding of 40 percent from 2008 to 2011. He was city manager in that Arizona community during that time.
He said the community, which has no property tax, became too dependent on funds generated by the construction industry and from home sales, and when the recession hit, that vulnerability became evident in a hurry.
He said the state also provided a significant amount of funds to the community before the shortfall. He said almost two-thirds of the state budget was tied to voter initiatives, and the state Legislature had to go to the public to ratify spending plans during the recession, almost all of which failed.
He said pressure from special-interest lobbyists also made it difficult to cut certain programs.
Davis, who began his career as city manager at West Point, said cuts in public safety, among police, fire and public works, were inevitable. He said dealing with major cuts involves more than tightening your belt.
"When you lose 10 to 40 percent, it's called an asteroid. You have to reinvent local government. What services should we be providing? We didn't have the luxury of asking citizens," Davis said.
Rep. Daniel McCay, R-Riverton, said residents shouldn't always be considered as the first source to any funding problem local government may face when funding streams go dry.
"It seems like the right approach was to trim services, rather than raise property taxes. If we have a 30 percent reduction in federal funds to the state, the impact will be felt by our citizens. The idea we would roll that onto our citizens would be irresponsible," McCay said.
Henderson said the commission's task to look at the potential loss of funds can almost be overwhelming.
"It is big. It's a big elephant to eat, and we can't eat it in one bite. We don't have to have it all done by next month. We want to have a big risk-management plan in place by the end of next year," the GOP lawmaker said.
"To me this is like food storage. We hope we never have to use it, but we want to be prepared and have a plan in place."