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An aerial view of the Utah State Capitol. Utah’s strong economic rankings put the state in what legislative leaders called an enviable position compared to other states, and they say that’s because of the states’ “balanced approach” to handling COVID-19 restrictions.

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Utah’s place in pandemic nation

What state leaders think about Utah’s budget and what it says about how Utah handled COVID-19

An aerial view of the Utah State Capitol. Utah’s strong economic rankings put the state in what legislative leaders called an enviable position compared to other states, and they say that’s because of the states’ “balanced approach” to handling COVID-19 restrictions.
| Jeffrey D. Allred, Deseret News

SALT LAKE CITY — As the Utah Legislature put finishing touches on the state’s more than $23 billion budget, state leaders repeatedly glowed over what they believe it says about Utah’s standing in a nation that has been gripped by COVID-19 for the past year.

After COVID-19 first touched down in Utah a little over a year ago, the Utah Legislature cut the state’s budget out of fears that the pandemic would send the state’s economy spiraling.

“Here we are in middle of a pandemic. Just a year ago almost to the day we were talking about and we shut down our restaurants, our gyms, the hair salons. ... We shut down the entire state and everybody went home,” Senate President Stuart Adams, R-Layton, recalled.

“Economically we thought we were headed into a Great Depression (and) our lives and our economic livelihoods would be forever destroyed.”

But fast forward 12 months. This year’s revenue projections were up, not down. Utah lawmakers this year had more than $1.5 billion in extra revenue to spend, despite the COVID-19 pandemic.

That positioned the state of Utah to have what legislative leaders called an enviable position compared to other states in the nation: a position to be able to commit a “historic” $400 million for education, $100 million in tax cuts for some Utahns, enough one-time cash and bonding power to fund more than $1.2 billion in infrastructure projects, over $50 million for affordable housing and homelessness, and more.

“You know, I’m stunned at what we’ve been able to do at the tail end of this pandemic, when we thought that this year we’d be in total economic crisis,” Adams told the Deseret News on the final day of the Utah Legislature’s session. “But instead we’ve had the best economic year that I can remember.”

Utah was the only state in the nation that gave as big of a boost to education as well as funded a tax cut in the middle of the pandemic, Adams said.

In rankings of 2020 state tax revenue during the pandemic, Utah placed near the top in the nation for revenue growth with a boost of 8%, coming up second only to Idaho’s 10.4%, according to the New York Times. Other states, especially those that rely heavily on tourism, oil and gas, and coal extraction like Alaska, Hawaii, Nevada, Texas and West Virginia, saw bleak returns.

So what was it about Utah that put the state at or near the top of the nation’s economic standings in the year of COVID-19?

The Utah way

To Utah’s legislative leaders and Gov. Spencer Cox, it was several factors. Utah already had a strong economy — and the hundreds of millions of dollars in federal stimulus money helped. But the unique factor they give most of the credit to is Utah’s balancing act that drew criticism from those who thought government leaders should have been doing more to clamp down on the virus, but one that state leaders repeatedly defended as decisions that would protect both “lives and livelihoods.”

Adams credited state leaders for finding “a blended approach to protecting lives and livelihoods” by being strategic about what COVID-19 restrictions to enact while not shutting the entire economy down.

House Speaker Brad Wilson, R-Kaysville, agreed, while also pointing out that Utah “went into the pandemic with one of the best growing economies and states in the country.”

“But the other element is we didn’t shut our state down like many other states did,” Wilson said. “We found, I think, the right balance between public health and economic health. ... We talked about both in the same sentence every time.”

That more “balanced approach,” Wilson said, “has helped us significantly.”

Cox agreed.

“That’s because we made the right decisions,” the governor said. “We protected the health and safety of people and we never closed our economy down. We allowed people to continue to participate in the economy, and that’s why we’re in the situation we are today.”

A different view

But a Utah Democratic leader, House Minority Leader Brian King, D-Salt Lake City, was frustrated with that characterization. On the final day of the session, King had strong words to challenge Utah’s GOP state leaders’ praise.

“Look, we always pat ourselves on the back aggressively — too aggressively in my mind — about the state of life, the quality of life in Utah,” King told the Deseret News. “We’re quick to take credit, we’re slow to acknowledge problems. Quicker to credit than we should be, slower to acknowledge problems than we should be. This is a good example.”

To King, Utah leaders haven’t given enough credit where it’s due: with federal COVID-19 aid.

“Let’s be honest,” he said. “The only reason that we’re in a position to do many of the things that we ended up doing ... is because we’ve had hundreds of millions of dollars of CARES Act and other federal money coming to us to deal with COVID.”

King also pointed to not just Utah’s economic rankings, but also its rankings regarding COVID-19 rates.

“Utah has not done, in my mind, any better job than the average state in this country in dealing with COVID,” King said.

COVID-19 rates

As of Wednesday, Utah ranked as the fourth-highest state in the nation — behind Rhode Island, South Dakota and North Dakota, for total COVID-19 cases per 100,000, with 11,739 cases per 100,000 over the life of the pandemic in the state, according to the New York Times. Utah, however, ranks closer to the middle of the pack when looking at average daily cases in the last seven days, with an average of 522.

Utah’s COVID-19 death rate has continued to rank low compared to other states, but health experts credit that statistic to the state’s young population. Still, several states rank lower than Utah in COVID-19 deaths per 100,000, including Oregon, Maine, Alaska, Vermont and Hawaii.

“The biggest factor, I think, is not some spectacular response to COVID that we are doing better than any other state — that’s not accurate,” King said. “And anybody that believes that or says that is fooling themselves. The biggest factor where we’re able to comfortably put together a budget that does a lot of good things is that we’ve had substantial amounts of federal money. I really wish folks on the other side of the aisle would give even a nod of the head to that.”

Legislative leaders did acknowledge federal stimulus money played a role in helping Utah’s economy. Budget leaders were frugal with ongoing money. Senate Majority Leader Evan Vickers, R-Cedar City, cautioned against bonding as much for infrastructure as House leaders initially planned to, expressing concerns that the state could still face a “fiscal cliff” in somewhat of a pandemic hangover after the COVID-19 stimulus funding runs its course.

But GOP leaders also pushed back on the idea that federal stimulus was the main reason Utah’s economy continued to boom.

“I don’t agree,” Wilson said. “If that were the case, other states would be seeing the same thing we are. It’s absolutely a difference here in terms of how Utah managed the pandemic from an economic and health standpoint, and that’s why we’re seeing a better outcome here in my humble opinion.”

Cox noted that every state had federal stimulus, but “not everybody is doing this well.”

“So it has to be something else,” the governor said. “And I think there’s two things: No 1. we were really responsible with how we spent that last year. We ended the session, the pandemic takes off, we call everybody back, and we immediately curb our spending. We were really, really cautious.

“And then we did balance health and the economy,” Cox said, pointing to Utah’s 3.1% unemployment rate. “I mean, we’re just a few tenths of a percent off of where we were before the pandemic started, which is the lowest unemployment anywhere in the country.”

Adams shared the governor’s and the speaker’s belief.

“I look around and other states (federal stimulus) would not have generated the economic result of what we’re experiencing without our approach,” the Senate president said. “It just wouldn’t happen.”

After the approval of the new $1.9 trillion COVID-19 relief bill, legislative leaders expect to convene in a special session this spring to figure out how to dole out the federal stimulus money.

The massive American Rescue Plan will direct an estimated $7 billion to $8 billion to Utah, according to Phil Dean, public finance senior research fellow at the University of Utah’s Kem C. Gardner Policy Institute.

Wilson, like Republicans in Congress, is critical of the spending plan.

“I’ve been talking with Sen. (Mitt) Romney ... and I’ve told him, ‘I don’t know what in the world Congress is thinking right now,’” Wilson said. “This is a lot of money that they’re contemplating, sending in areas that we already have a fair amount of money flowing, and it’s probably too much money too fast.”

Wilson worries that depending on how that revenue is handled, it could “create other problems for the state, hopefully not a lot of inflation, but it could.”

“And so we’ve just got to watch this very carefully,” he said. “I do think that we’re in an enviable position because we already have a lot of great long-term planning.”

Wilson said it’s likely state leaders will look to use that federal money to invest in the state’s “greatest long-term needs,” perhaps more for infrastructure, more for education, or investments in water infrastructure.

“We don’t have the problem that many states have that have budget deficits right now,” Wilson said. “So money that flows to us can be invested in the future. We don’t have to backfill hemorrhaging budgets like other states do.”

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