howardnlby Howard Stephenson
When Governor Leavitt held back $56.6 million from the fiscal year 2001 budget near its close last June there were some who criticized him for not allowing the gap to be made up with a portion of the state’s $120 million “rainy day fund”. That was the first time in the Leavitt Administration that the governor had to make decisions regarding significant budget reductions. Utah had enjoyed good economic times until then.
And then, near the end of August 2001, just as the new 2002 fiscal year was beginning, it was discovered that the state was already facing a shortfall of $74 million. Many at that time said we should dip into the rainy day fund, but most legislators were opposed to the idea and called for budget cuts instead.

By October the projected deficit had grown to $177 million and more voices were calling for use of the rainy day fund. The Governor himself called for use of $67 million of the rainy day fund, but Republican legislators said ‘no’ and called for deeper cuts and some pleaded with the Governor to call a special session to give legislators ownership over the cuts.

By the end of November the Office of Legislative Fiscal Analyst announced that the revenue shortfall had grown to $202 million. Most legislators were still determined not to use the rainy day fund and were criticized from all sides for being so intransigent. Additionally, the legislature persisted in its argument that it would not be prudent to fund ongoing spending with one-time rainy day monies.

After the legislative session had begun the shortfall had grown even larger. By February 25 the 2002 revenue shortfall had grown to $257 million. The Legislature finally conceded to using $45.3 million of the rainy day fund, leaving $75 million for future emergencies.

In hindsight it is clear to even those who had insisted on using the rainy day fund six months ago that the legislature showed great restraint and good judgement in holding tough. If legislators had capitulated early on, it is unclear whether the 2002 budget could have been balanced without tax increases which would have hampered the economic recovery.
Hyperbole Regarding Budget Reductions

We’re seeing a lot of news stories about the cuts the legislature made in state budgets due to a significant drop in revenues resulting from the current economic downturn. Unfortunately, in many instances the news media have given more attention to hyperbole and rumor than facts. This has been no more the case than with the public education budget.

When education cuts have been described in the press, the claims of reductions in teaching staff and books and supplies have far exceeded what is really required. The fact is that the legislature worked hard to hold public education as harmless as possible. These efforts were so well received by the education community that members of the Utah School Boards Association, Utah School Superintendents Association, and School Business Administrators presented the legislature with a Resolution of Appreciation. The language of the resolution recognized that other departments of state government took more substantial funding cuts than education and that the legislature had held public education relatively harmless from even deeper budget cuts.

To be exact, the public education budget for 2003 dropped just 1.3% from the revised 2002 figure. This compares to cuts of 4.2% for executive offices and criminal justice, 12% in natural resources, and 5% in transportation, environmental quality and national guard.

Additionally, the legislature removed the funding mandates and strings, leaving local school boards total flexibility in deciding where best to apply the reductions. It was the legislature’s hope that by doing this, local school boards could keep the reductions from affecting classroom instruction.

Unfortunately, it now appears that some school boards are placing the reductions squarely in the classroom by reducing staff and increasing class sizes. Many of the calls received by my office tell stories of as many as six teaching positions being cut in a middle school of 55 teachers. This is an incredible approach because if teaching staffs were to receive commensurate reductions equal to the 1.3% overall education cut, a staff of 55 teachers would be trimmed by just seven-tenths of one teacher, not six teachers.

Remember, as you hear the stories of budget cuts, that it’s an election year and there are some in the education community who would like to make the legislature look as irresponsible as possible to affect the outcome of the election process.