Just about any day can become a bad one if the mail includes an overdraft statement from the bank.
Of course, if you're used to overdraft statements, getting a smaller one than normal could make it sort of a good day. Which is how Gov. Gary Herbert and state lawmakers must have felt this week when they learned that Utah fell only $50 million short of revenue projections during the fiscal year that recently ended. The governor said that translates into an actual deficit of only $28 million when you account for how state agencies squeezed their spending for much of the year.
There are few moral victories in budgeting or finance. But $28 million? Heck, you could probably find that much in change under the sofa cushions at the state capitol, especially if you check right after a lobbyist has gotten up.
Joking aside, if you're reading this in Utah, you can count yourself lucky to be in one of the few states with a manageable fiscal catastrophe. It's never good to start a new year by having to cover a deficit from the previous one, and Utah has yet to learn how far behind it will fall during the current budget year, but if state government were a boat, Utah would have a leak; California, Illinois and Nevada would be missing hulls.
California's politicians and bureaucrats may have gone through what felt like a fiscal Bataan Death March last year, but they face an additional $21.3 billion projected deficit this year, which represents a quarter of the state's budget for fiscal 2011. Illinois' gap is projected to be $17 billion, or a whopping 52.3 percent of its budget in 2011. Nevada projects a shortfall equal to 36 percent of its budget, according to the Center on Budget and Policy Priorities. In a recent report, the center said 39 states are projecting a combined budget gap of $102 billion heading into the fall, and that number is expected to grow to about $120 billion once the other states add things up.
It didn't have to be this way. In a working paper published last month by the Mercatus Center at George Mason University, research fellow Matthew Mitchell suggests states could have avoided all this mess if they had shown a little restraint during the booming '80s, '90s and '00s.
Mitchell studied 14 states with the highest budget gaps. Then, he looked at how much their budgets grew between 1987 and 2009 and compared that to the overall growth in their economies.
It turns out state governments grew much faster than the private sector. Mitchell found that, since the end of World War II, state and local spending nationwide grew 34 percent faster than the private sector and even 37 percent faster than federal government spending. (Sorry, I should have warned you to brace for a shock, especially if you have listened to all those political ads through the years touting fiscal responsibility.)
Mitchell also found that, had the 14 states he studied kept their budget growth to a rate level with inflation and population since 1987, they wouldn't have any deficit today.
All kinds of special interests will take issue with that. They will cite human needs and predict pain and suffering. But in 1987, the economy was doing well and there were, as Mitchell wrote, "no widespread protests that government had grown too small. ..."
He ends the paper by suggesting ways states could limit spending. These include passing laws that limit growth to a formula based on inflation and population growth.
Interestingly, Utah did this years ago with the property tax rates of cities, counties and other local governments. As I reported in this column awhile ago, a report by the Utah Foundation found that Utahns today spend much less of their income on property taxes than their counterparts in 1965.
Maybe such restraints on all state spending would keep us from having to search those sofa cushions for loose change. It might even erase those annual overdraft statements.
Jay Evensen is a Deseret News editorial writer. E-mail: even@desnews.com. Visit his blog at www.deseretnews.com/blogs.