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Huntsman, legislators differ on deficit

It’s question of urgency; fiscal year ends in June

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Mismanaging the state budget, even breaking the law?

Such tough talk was thrown on Tuesday at Gov. Jon Huntsman Jr. by legislative leaders, who are also fellow Republicans.

The leaders are upset that Huntsman — as previously reported — won't call a special legislative session so lawmakers can quickly address a growing state budget deficit.

If the Legislature knew of budget deficits and didn't move quickly to close them, "we could be accused of mismanagement," Speaker-elect Dave Clark, R-Santa Clara, told the Deseret News.

And during a meeting of the Legislature's Executive Appropriations Committee Tuesday afternoon, several GOP leaders asked whether Huntsman, by law, had to order state agencies to spend to levels set by that committee, even out of session.

The technical, legal explanation didn't appear to appease some of the GOP lawmakers: that the governor must address an "operational" budget deficit. But since the state is not at the end of its fiscal year and is still collecting tax revenue, Huntsman doesn't have to make up any anticipated shortfalls now — even though nearly everyone believes that left unaddressed, the state will run a multimillion-dollar deficit by July 1.

Huntsman is "proactively" dealing with revenue shortfalls, said Lisa Roskelley, his spokeswoman. "Just because the Legislature is not (in a special) session doesn't mean he isn't acting. He is. He's already asked state agencies to spend 1.5 percent less" for the

whole 12-month fiscal year.

Clark fears that legislators' options may be dwindling so fast that come March — when lawmakers will make final adjustments to the current budget and adopt the 2009-10 budget — all legislators can do is "plug the budget with one-time (Rainy Day Fund) monies and hope to get federal money to bail us out. That is not good budgetary posturing. I feel painted into a corner."

For his part, Huntsman continues to say he has addressed falling state revenues and that it makes little sense to call legislators into a special session just five weeks before they come into their regular, general session the end of January.

By any measure, the state's economic situation is darkening. Tuesday, the Utah Tax Commission issued its tax collection report for the first five months of the current budget year, showing revenues in the two main state funds are down 7.8 percent from a year ago, one of the largest drops in recent memory.

At the committee meeting, budget experts couldn't tell Sen. Pat Jones, D-Holladay, how many state workers may lose their jobs because of either the 4 percent cutbacks made by legislators in a September special session, nor may be out of work because of the additional 7.5 percent Republicans want to cut in January from state agencies this fiscal year.

But around 32 percent of all state spending is on employee salaries and benefits, like health care, she was told. So it is likely some employees will be laid off.

Tuesday, the House and Senate leaders from both parties unanimously adopted a "base budget" for next fiscal year, 2009-10, which starts July 1, that is 85 percent of the state budget as readjusted in the September special session.

Those 15 percent "cuts" will be painful, said Sen. Sheldon Killpack, R-Syracuse. "But it is manageable," and furthermore, it is only a budget-setting starting point. He said Utahns should understand that cutting state government by those hundreds of millions of dollars only drops state spending back to the 2007 level.

Budget chairs Sen. Lyle Hillyard, R-Logan, and Rep. Ron Bigelow, R-West Valley, said their economists picked the worst financial scenario in coming up with the 7.5 percent more in cutting this year (over the September base budget numbers), and 15 percent next year.

Hopefully, when new tax collection forecasts come to lawmakers in February, those predictions will be too gloomy and legislators can then add back more spending this year and next.

Finally, several Democratic leaders protested that the majority Republicans want to hold pre-legislative budget meetings on Jan. 20 — the day of Barack Obama's inauguration in Washington, D.C.

"So you would be taking important budget votes while some of us are gone" to the Democrats' big day, said Rep. David Litvack, D-Salt Lake, the incoming House minority leader. Republicans said they'd look at another day for those critical budget meetings.


E-mail: bbjr@desnews.com