Utahns are witnessing once again why Utah is the best fiscally managed state in the nation as the Utah Legislature is already working vigorously to balance the current year budget and repeal increases and trim the 2020-21 budget without raising taxes. Currently, the Utah Legislature is grappling to cut around $900 million ongoing and $500 million one-time spending. It’s an understatement to say this is not an easy task.
As I talk with my counterparts in other states it appears their legislatures and governors are whistling past the graveyard, putting off the inevitable, hoping that the COVID-19 recession will not affect their revenues and somehow solve itself.
The wisdom of the Utah Legislature in recent annual sessions becomes even more clear in hindsight. We now see the wisdom of why the legislature avoided spending recent record revenue growth to expand ongoing spending programs in spite of complaints from the spending lobby.
Instead, the legislature used a significant share of those skyrocketing revenues as a ‘working rainy day fund’ using cash to pay $602.4 million for prison construction, higher education and UDOT buildings and another $292.2 million in cash for transportation expansion in America’s fastest growing state in the nation. All of these construction projects in any other state would ordinarily and justifiably have been funded through bonding. Now, with COVID revenue shortfalls, that cash can be pulled back to ensure funding of essential services while the state bonds for roads and prison completion at annual rates as low as 1.16%.
The legislature is wisely planning to cancel construction of four college campus buildings and a UDOT building that were part of the $602 million building plan. This will limit the size of the bonding package and ensure continuation of Utah’s enviable Triple A bond rating.
The Legislative Fiscal Analyst has a web resource for policymakers and citizens to understand the fiscal health of the state. It is well for every taxpayer to be familiar with the contents of this resource. The site has four tabs: Obligations, which include 9 tabs showing Bonded Debt, Unfunded Liabilities, and other obligations; Reserves, which include 11 categories of Rainy Day Funds, Working Rainy Day Funds, Restricted Reserves and Constitutionally protected Trust Funds; Expenditures, which include all State Spending Budgets; and Revenues, which show all Budgetary Revenue Sources.
Utah Legislature’s Budget Cutting Underway
Each Appropriations Subcommittee met recently to make budget cutting proposals to the Executive Appropriations Committee which will meet before an expected June 19 special session of the legislature. Subcommittees were charged with proposing three different priorities for budget cuts: 2%, 5%, and 10%. Each subcommittee considered proposals from the Legislative Fiscal Analyst, and the departments of state government for which the committee was responsible.
Your Taxpayers Association has been following the budget cutting process in various subcommittees. We were impressed how the departments and subcommittees took their responsibilities seriously. One disappointment however, was the common practice of preserving the status quo rather than using the exercise to reinvent government service delivery. While many businesses are cutting far more than 10%, record bankruptcies are being filed, and private sector pay cuts and unemployment is at record levels, government jobs and pay are generally being protected.
I closely followed the Public Education Appropriations Subcommittee process. I was surprised that the Utah State Board of Education (USBE) and the School Boards and Superintendents Associations (USBA/USSA) proposals focused too much on cutting the most effective newer programs and preserving many of the low performing longstanding programs.
While Utah schools were more prepared for distance learning during the closure of schools from the COVID crisis because of the degree to which we had already implemented a Statewide Digital Teaching and Learning Masterplan, the requirement for home-based public education exposed serious deficiencies in many schools. The most serious deficiency in providing online instruction is the fact that too many students from low income families had no internet connection or computer access. These students have been essentially left out of schooling during the shutdown. Fortunately, this inequity did not result in Utah following the example of other states where schools were denying online learning for everyone because some students were unable to connect. However, in the budget re-prioritization process, little has been recommended to reach these students in their homes. The Utah Education and Tele-health Network (UETN) is currently making plans to use CARES Act funds to enable low income students to be served during closures.
In spite of the tremendous demand for expanding online learning and digital teaching and learning software, both the USBE and USBA/USSA failed to recommend increases in these programs but instead recommended massive cuts! Senator Ann Millner questioned the USBE’s proposed cuts in the highly effective and nationally acclaimed UPSTART kindergarten readiness program when its success in preparing kids for kindergarten suggests it should actually be increased.
Representative Frances Gibson questioned why the USBE would be preserving status quo programs while failing to support computer based teaching and learning. Nearly a decade ago he and Speaker Becky Lockhart called for one-to-one devices for all students and in hindsight it is clear the state would be better off today had we moved in that direction.
During the first Public Education Appropriations Subcommittee meeting to consider budget cutting, Representative Robert Spendlove noted the list of cuts from the USBE didn’t seem to have any clearly defined principles or criteria for its proposals, to which the spokesperson said they only had a week to make the cuts.
In response to Representative Spendlove’s request, here are the principles I believe should govern cuts in Public Education Budget:
Criteria for Prioritizing Budgets
FUND EFFECTIVENESS, NOT BASE BUDGETS (Reject the union requirement of “last hired, first fired,” keeping instead the most effective employees regardless of longevity)
- Base budgets should receive no protection over spending on programs in the regular budget which have greater outcomes.
- Protect and even increase spending for programs which the data show have the greatest outcomes for students.
- Reject protection of the Weighted Pupil Unit (WPU). While the private sector workforce is hemorrhaging under COVID’s economic effects, government workers should not be immune from reductions in force or modest pay cuts. A 5% cut in the WPU would produce more than $150 million to save programs which have proven effectiveness and enable teachers to provide effective online learning.
FUND EQUITY, INSTEAD OF CREATING WINNERS AND LOSERS
- Protect spending for tools to reach students remotely, expand spending for reaching students who are prevented from participating in remote learning during school shutdowns because they do not have internet or computer access.
- Fund enrollment growth in all schools to prevent the fastest growing districts from bearing a disproportionate impact from the COVID economic downturn.
- Ensure all students have an equal opportunity to participate in the Statewide Online Education Program. Currently, students attending school district high schools can participate in the online courses without funding limitations. Even though the law ensures private and homeschool students the same opportunity to participate in online classes, USBE has recommended cutting the funding for these students. Online opportunities should be equally available to all high school students whether public, private or home schooled.