The past 45-days have been a whirlwind of activity, discussion, and decision-making. As legislative sessions go, this will go down in the annals of history as being one of the most difficult in terms of budgeting. The Legislature is required by our constitution to craft a balanced budget; something made particularly difficult this year by the nationwide recession.
As legislators, we agonize over every dollar. With $460 million in federal stimulus funds expiring for many programs, Utah felt for the first time the full brunt of the stagnant economy. The 2010-2011 budget shrank by $640 million as compared to the 2009-2010 budget. Each and every program and department, with the exception of public education, had to absorb a 5 percent cut, including state legislators, all of whom took a pay cut. We did all we could to protect the classroom from cuts, sparing public education all but a 0.6 percent reduction. We are all learning to do more with less while protecting critical, frontline programs like public education and Medicaid.
This year, we spent nearly $313 million from our general and education Rainy Day funds. We have held roughly $210 million of our rainy day funds in reserve for future use and to protect the State's AAA bond (i.e. credit) rating. We are one of only six states rated this high by Standard and Poor's, enabling the borrowing of money at a much better rate. While the budget news I have related thus far is fairly depressing, there is a silver lining to the financial storm clouds. The revenue projections for Utah from November 2009 through February 2010 were stable for the first time in many quarters, showing that we have reached the bottom of the financial decline. While the projections don't yet hint at economic recovery, they are a very important indicator that the worst is over.
One of the more challenging budget issues we dealt with this year as a result of the recession was the $6.5 billion in unfunded liabilities in the Utah Retirement System (URS). The URS fund posted a negative 22.3 percent loss last year, a loss so large the actuarial experts stated there was no way the fund could self-correct the deficit over time without intervention. The Legislature felt it was important to protect and honor the promises made to current employees and retirees. No changes were made to those benefits.
Instead, the changes centered on the retirement packages for future hires. Employees hired after July 1, 2011 will have the option to pick from either a traditional defined contribution plan or a hybrid defined benefit/defined contribution plan. The so-called "double-dippers" will be prevented from taking a second bite at the retirement apple. Instead, they will have the option to come back into the system and earn additional service credits or continue to draw pension benefits and their salary with no double-dip into a retirement system or 401(k).
In addition to budgetary matters, the Legislature also aggressively tackled ethics reform in a series of bills that eliminate the personal use of campaign funds, prohibits legislators from receiving gifts worth more than $10, require greater disclosure on a legislators' conflict of interest forms, and creates an independent ethics commission. When elected, I promised that we would do things differently at the Legislature and I believe these actions are significant and will greatly enhance the transparency of the actions we take at the Capitol.
A very heated debate was raised this session regarding streambed access throughout the state. There were essentially two schools of thought in regards to this controversial issue. One was to let the Conaster State Supreme Court decision stand, opening all streams to public access including those that could only be accessed through private land. This idea tended to benefit fisherman more. The legislative proposal benefited private property owners and sought to place restrictions limiting the court action. The philosophy this year ended up leaning towards private property rights. A one-year task force to study the issue further has also been implemented.
Health care reform was another significant topic. Utah is currently in the third year of a 10-year plan. Legislation was proposed to create an "exchange" for small businesses where employees can shop for policies online. Large employers will be added on a limited basis at a later date. Other reforms include greater transparency in our Medicaid programs and requirements for health providers and insurance carriers to use universal electronic billing information.
As you can see we took on some rather challenging issues this year, but with every action we sought to be good stewards of your tax dollars and public trust. I hope this will help to provide a bit of insight into the countless hours of hard work and dedication your legislators put into this year's session as we worked to once again help make Utah a better place for all who live here.
Rep. Brad Dee is the majority whip in the Utah State House of Representatives. He represents House District 11, which covers portions of Davis and Weber counties.