SALT LAKE CITY — As Utah Gov. Gary Herbert prepares to navigate his final legislative session starting Monday, he leads a state government much different than the one he walked into more than a decade ago.
In 2009, when Herbert was sworn into office to take the place of Gov. Jon Huntsman Jr. — who resigned to become U.S. ambassador to China — Utah and the rest of the country was in the grip of the worst economy since the Great Depression.
Huntsman had already grappled with the fallout of a nearly billion-dollar budget gap. Lawmakers slashed spending on average by 9% and tangled with Huntsman over cuts to the state’s Rainy Day Fund, trimmed the budget, and then trimmed some more. The state instituted a four-day workweek and a third of state offices were shut down on Fridays.
“We were in survival mode.” — Former House Speaker Dave Clark
For Herbert’s inaugural year, Utah’s state budget was $11.5 billion for fiscal year 2010. This year, he is proposing $20 billion for the next budget cycle.
Throughout his tenure, Herbert notes, he confined increases to three key areas: transportation, Medicaid and education.
“That is where everybody says that makes sense,” Herbert said. And in his mind, the formula has paid off.
“We have been able to do a lot of things over the last 10 years. It’s been phenomenal.”
Dealing with a recession
“We were in survival mode,” recalled former House Speaker Dave Clark. “I think I said more ‘noes’ in that two years to funding requests than I ever did in 40 years at Zions Bank.”
The now retired banker said lawmakers slashed some programs by as much as two-thirds, eliminated some altogether and combed through every employee position looking to make cuts. They instituted a hiring freeze but did not have to do layoffs.
“I think the foundation was laid during those hard times. We did not increase taxes. We learned that we could get by with less. We found out we could do the same thing, smarter, better and cheaper,” Clark said. “After a dozen years in the Legislature, I found we were really never good at doing that unless we were forced to.”
Clark said he believes those hard times shaped the mindset of both lawmakers and the governor in the ensuing years.
“Herbert came in at a very challenging time. There were hard decisions that had to be made. He said we’re not going to cut public education, but it didn’t mean they didn’t have their share of grief. He was doggedly determined to make sure it stayed that way, intact.”
Former Senate President Wayne Niederhauser, R-Sandy, recalled that in 2007, his first session, there was a record surplus.
“It was at an all-time high,” with another huge surplus in 2008, he said.
“By the end of the year we were cutting budgets across the board. Within two years, we seen the highest highs and the lowest lows,” he said. “Gov. Herbert came in at one of the absolute worst times.”
Working with the Legislature
Utah had already received accolades for its state management, but Niederhauser said lawmakers and Herbert worked to streamline government even further.
“We got even better over the years with the budget, and Herbert was always part of those discussions. He did an excellent job of supporting those initiatives percolating in the Legislature.”
Over the years, Herbert and lawmakers disagreed over key political issues, including Medicaid expansion.
When lawmakers came back and would override a Hebert veto, Niederhauser said it wasn’t a “black eye,” for the governor.
“It is hard to be very tough with a Legislature that has a supermajority,” Niederhauser said. “That is just the nature of the Legislature he had to deal with. Sometimes we were very divided, but if there is a veto, all of sudden the Legislature unites.”
Overall, Niederhauser said Herbert worked well with lawmakers.
“When he’d get frustrated with us because we couldn’t get certain things done, I’d tell him he was a committee of one, the Senate was a committee of 29 and the House is a committee of 75,” he said. “I feel like he did a good job. He was frustrated with us, we were frustrated with him, but that is the nature of the business.”
During the Great Recession, Utah experienced the weakest job market since the Depression, primarily due to the loss of 40,000 construction jobs.
The implosion of the housing bubble cost the country’s economy $8 trillion overall, and in Utah, corporate income tax dropped 33%.
“I am right of center conservative ... moderate in tone and inclusive in process,” he said. “I think you get more things done that way, and getting things done is what governors need to do.” — Herbert
Since that time, Utah managed to hang onto its AAA bond rating and in the last three or four years has put ongoing money into its Rainy Day Fund. In Herbert’s budget recommendations for fiscal year 2021, the fund is proposed to be $635 million.
Leading in good times
Utah now has the No. 1 economy in the nation and a job growth rate of 33.5% since the Great Recession, a percentage that leads the nation.
The state’s unemployment rate went from 8% 10 years ago to 2.3% — a new record Herbert said could drop even more.
“I think the economy is going to get even better,” he said.
He also pointed to a Utah Foundation assessment that put the percentage of income that goes toward state taxes in Utah at the lowest rate in 27 years.
“We are in a very good place,” he said during an interview on KSL Newsradio.
Niederhauser said one of Herbert’s cornerstone accomplishments is getting state agency efficiency boosted by more than 25%, with an eye to creating even more efficiencies before he leaves office.
Herbert, in turn, gives credit to lawmakers he says have the “backbone” and “foresight” to insist the state can do things better.
Education was always, and remains Hebert’s key funding priority during this last budget cycle for him as governor for the state of Utah with $482 million in new, ongoing money recommended and $200 million in one-time money.
While education outcomes have improved vastly, he said the state needs more improvement and to make sure young graduates have the proper skill sets to meet the demands of an evolving job market.
Sen. Lyle Hillyard, R-Logan, who served as budget chairman for 12 years at the Utah Legislature, said during his decades in office, more than any other governor, Herbert steeped himself in the complexities of the state budget. Hillyard was first elected to the House in 1980.
“That has been a focus of his. He knows the budget and knows it well. He is the one who personally spent more time and interest on how the budget works,” Hillyard said.
With tax reform now scuttled — at least for this session — the tedious and time-consuming work of the budget will dominate the session over its 45-day stretch, with everyone asking for a bit of something.
For Herbert’s part, he again is asking for $100 million to tackle air quality issues, a $40 million endowment for open space, $20 million for affordable housing and no new bonding authorizations.
He said his years as governor and his relationship with an ever-changing Legislature have taught him a lot, but most importantly?
“I have learned how to listen, how to explore. I am right of center conservative ... moderate in tone and inclusive in process,” he said. “I think you get more things done that way, and getting things done is what governors need to do.”
