Lawmakers began the last day of the 1991 Legislature Wednesday by reluctantly agreeing to a budget compromise reached between Republican leadership and Gov. Norm Bangerter only hours earlier.
"There were a few who were holding their noses when they voted," Rep. Richard Bradford, R-Sandy, said after about three-fourths of the House Republicans accepted the compromise during a closed-door caucus.One of the Republicans who was reluctant to support the compromise was Rep. Glen Brown, R-Coalville, co-chairman of the Executive Appropriations Committee.
"It has the potential of building a lot of pressure for increased taxes," Brown said.
The reason for Brown's concern is that the agreement made Tuesday by the governor and legislative leaders calls for using at least $15 million in surplus funds this year to pay for an ongoing $22 million shortfall in the state's retirement system.
Brown said the surplus funds are supposed to come from the settlement of property tax disputes now expected as a result of legislative action this session on the AMAX issue.
Democrats, too, were less than thrilled with the compromise even though House Minority Whip Kelly Atkinson, D-West Jordan, gave them credit for the deal. Many Democrats continue to support spending even more money.
Senators did not have to caucus on the compromise. Senate President Arnold Christensen, R-Sandy, announced on the Senate floor Wednesday that "the Senate budget position had been protected."
The compromise settles the budget crisis that surfaced last week when legislative fiscal analysts said there would be $15 million less in tax revenue next year than anticipated.
The idea of using money expected to be left over when the budget year ends June 30 to balance the difference between the latest revenue projections and the amount of money legislators had hoped to spend isn't new.
But it is a new idea to use surplus funds to pay for next year's share of the massive shortfall discovered last year in the state's retirement fund, which is going to take 30 years to replace.
It's been estimated that it will cost $22 million a year for the next 30 years to make up the shortfall, which is blamed on actuarial errors that have been compounded over a number of years.
State retirement system officials reportedly toldthe governor and legislative leaders Tuesday evening that they're not sure that estimate is correct and they'd use the next year to study the issue.
"This is not the best solution to the problem," House Majority Leader Rob Bishop, R-Brigham City, said. "But when our revenue projections fell and we had an impasse with the governor, we were looking for something to get us out."
Bishop said lawmakers could face serious problems next year if the latest revenue projections prove true. "If the economy stays flat, we have dug ourselves a much deeper hole," he said.
House Majority Whip Bryon Harward, R-Provo, stressed that no matter what type of funds are used, the money needed to cover the shortfall will be there and retirement benefits won't be affected.
"I don't want the impression to be that we're balancing the budget by taking it out of the retirement system," Harward said.
Until Bishop came up with the idea Tuesday evening, it looked like there might not be a budget compromise before the session ended at midnight Wednesday.
Bangerter and Democrats have wanted all along to dip into the $84 million or so in surplus funds to bolster ongoing programs. Republicans in both the House and the Senate have hesitated.
GOP caucuses in both the House and the Senate have agreed instead to pass two budgets, one with the less than 1 percent cut in the governor's $3.5 billion budget needed to balance the budget on the latest projections.
The second budget would restore those cuts, which amount to about $15 million, in September if tax collections look better after the new budget year begins July 1.
Although he hasn't used the word "veto," the governor has made it clear he wouldn't accept a budget that left any doubt how much money was available for state departments to spend.
Bangerter told reporters after no progress was made at the second of three meetings with leadership Tuesday that he would not accept the so-called "two-tier" budget the House and Senate caucuses had approved.
Bud Scruggs, the governor's chief of staff, stopped short of calling Bangerter the winner in the budget compromise reached later Tuesday. "The big winners are the teachers and other recipients of these funds," Scruggs said.