Utah’s economy — and its taxpayers — are generating massive amounts of tax revenue for state government. That’s good for Gov. Spencer Cox and Utah legislators who get to spend it. Cox has now released his recommendations for his $28 billion budget — the largest in Utah history. We take a look.
Cox’s proposed budget includes a $6,000 compensation increase for every public school teacher in the state, and $1 billion for a variety of tax cuts. Are these and his other proposals wise expenditures considering the possibility of slowing economic growth in the coming year?
Pignanelli: “Reviewing a government budget is much like going through the attic in an old home.” — Rick Scott
Cox provided a technical budget document but broadcast implied signals to legislators, special interest groups and the media. The governor is prioritizing public education, tax cuts, water management, housing and rural development. These are valid concentrations as Utahns care for their schools, and slightly lowering the income tax rate does maintain competitiveness while allowing taxpayers to keep a little extra in paychecks.
In my first session as a legislator (about the late Bronze Age) Utah was amid a disastrous economic crisis without relief from the federal government. This experience made me a firm believer in a rainy-day fund for such contingencies. Concerns of a future emergency raise the necessary question of whether the governor’s proposed one-time rebate of taxes to citizens is better allocated towards the savings account.
The governor has successfully set the tone for the next session with direct and inferred communications.
Webb: For an old guy like me, the amount of money available for spending is mind-boggling. I remember too well the hard days of budget cuts and scraping together every penny. Today’s budget is almost an embarrassment of riches. But it is a reflection of good governance that has helped enable a very strong, diversified economy.
And Gov. Cox has budgeted wisely. Nothing is more important to Utah’s future than excellent public education, so it’s appropriate to invest in teacher salaries. We need the best and brightest teaching, mentoring and motivating our young people. Money targeted for water conservation, domestic violence, mental health, housing and homelessness and rural initiatives are all deserved expenditures.
Cox has also been careful to spend a lot of money for one-time purposes so it will be available in the future if the economy goes bad. Substantial debt reduction is a great way to save money for the future. And a big chunk of the governor’s tax relief is in the form of a rebate, meaning it won’t require ongoing money. Utah’s taxes are already low on a historical basis. We don’t need massive tax cuts. Better to invest in one-time infrastructure projects that will further build Utah’s economy and create jobs.
Because the national economy is tenuous right now, it’s important to be conservative. Despite the large numbers, this is a reasonably conservative budget.
How are Utah’s 104 state legislators likely to react to the governor’s budget recommendations?
Pignanelli: For almost three decades, the Legislature developed its own budget, with occasional reference to the governor. By detailing exact amounts for teacher salary increases and tax cuts, the governor is drawing a line. As usual, legislators will develop their own budget, but next year has a critical difference.
Many lawmakers want to establish a scholarship or vouchers program as an alternative to public education. Cox has repeatedly stated that he will not support such an effort unless teachers are adequately compensated. Thus, his budget address provides these parameters. Lawmakers will tweak his tax cuts and recommendations for water management. Many ancillary proposals (i.e. funding bus fares for a year) are unlikely to survive. As a former lawmaker and lieutenant governor, Cox has a good handle of which objectives are needed and those that need to be jettisoned.
Webb: Lawmakers and their excellent staff have been scrutinizing the budget numbers for many months and they will improve on the governor’s budget, although most of the governor’s priorities will survive. Lawmakers will also be very careful to use large amounts of money for one-time purposes, preserving revenue for the future to prepare for economic decline.
According to a recent Deseret News/Hinckley Institute of Politics poll, 63% of Utah voters give Cox a positive approval rating. Will that help him achieve his priorities in the Legislature?
Pignanelli: In the last year Cox’s veto was overridden by the Legislature, the GOP party chair attacked him on national television and his administration was booed at the convention. Yet, he is enjoying very high approval ratings, which screams volumes about his personality and performance. Therefore, he enters the legislative session in a strong position to prevail.
Webb: The governor enjoys substantial political capital, and that’s always a great asset in a political fight. But the Legislature has a way of keeping high-flying governors humble. Lawmakers will legislate as they wish, but they and the governor are all mainstream politicians. The principals on both sides talk frequently and have good relationships. Legislators know they need the governor’s signature on their bills. In other words, it will be a standoff with sensible compromise.
Republican LaVarr Webb is a former journalist and a semiretired small farmer and political consultant. Email: firstname.lastname@example.org. Frank Pignanelli is a Salt Lake attorney, lobbyist and political adviser who served as a Democrat in the Utah state Legislature. Email: email@example.com.