SALT LAKE CITY — Gov. Gary Herbert told attendees at a tax conference Tuesday that the state would protect its lofty management ranking by staying the course and staying away from new taxes, even as legislators forecast more dark days ahead that could necessitate an increase.
A Utah Taxpayers Association gathering at the Little America Hotel drew about 300 people, including a who's who of government fiscal experts to weigh in on what is and isn't working in the quest to keep the state, its businesses and residents solvent amid turbulent economic times. Several national organizations have called Utah the best fiscally managed state in the country.
"What we're doing seems to be working pretty well," Herbert said. "Moving ahead, our No. 1 focus is what we can do to grow the economy, what we can do to create jobs."
Herbert said the course of action for his first budget effort was one of collaboration and a commitment to downsizing government, while maintaining critical services such as education without further burdening taxpayers. While the state education budget remained essentially flat compared with the previous one, there was no new funding for an expected 10,000-plus additional schoolchildren. A tobacco tax hike did make it into the law books, albeit without the governor's signature. The key, Herbert said, is to resist yearly budget increases.
"All the pressure is to come to government and say, 'We have a problem. Will you give us more help?' which means, 'Will you give us more money?' " Herbert said. "Pressure is always to grow and expand the government. We've taken the opposite stance."
Herbert said Utah is fending fairly well, especially taken in the context of disastrous budget circumstances in other states around the country, but the plight of many residents remains grim.
"I don't want to minimize because there are people out there hurting," Herbert said. "Seventy-five thousand people have lost their jobs over the past few years."
Also unknown is what it will cost Utah to meet mandates of yet-to-be-implemented federal health care reform. Senate Budget Chairman Sen. Lyle Hillyard, R-Logan, said the changes to the state's system likely will heap a new burden on a budget hanging in delicate balance.
"We're deeply concerned with health care spending," Hillyard said. "We don't print money in the state of Utah. We have to find it from other sources, either tax increases or reduced spending in other budgets."
Even while the specter of new health care expenses hangs over the Legislature, some near-term issues are already on the radar. A state tax revenue report released in April showed collection estimates short more than $100 million. And next year's budget, even without further revenue declines, is "imbalanced" by more than $300 million —some funding for ongoing programs only lasts through the year.
Senate President Michael Waddoups, R-Taylorsville, said everything will be on the table for consideration in the efforts to maintain a balanced budget.
"You'll hear talks about how we impact the gas tax, increasing fees, talks about property tax increases, talk about income tax, maybe we should do more there, broadening the sales tax," Waddoups said. "All these things will be discussed. The final result, obviously, is going to take us another eight or nine months to decide."
Local economist Kelly Matthews said the recent glimmers of economic recovery in Utah and elsewhere could be offset dramatically if the current fiscal crisis in Europe continues to expand.
"Ten days ago, we were sort of thinking normalcy was not far off," he said.
Now, Matthews said, with the financial debacle in Greece, the effectiveness of efforts by the European Union to address the issue and rein in the global impact remains unknown.
The taxpayers association's 32nd annual conference also featured presentations on changes to transportation and energy programs, education funding, bolstering a struggling state retirement funding system and use of federal lands as revenue sources.
e-mail: araymond@desnews.com