Thursday, December 11, 2014

Gov. Herbert Lays Out $14.3 Billion Budget, Praises Utah's Robust Economy

Posted By on December 11, 2014, 4:32 PM

click to enlarge Gov. Herbert greets students at Granite Park Junior High School. He proposes spending $5.8 billion on education in 2015.
  • Gov. Herbert greets students at Granite Park Junior High School. He proposes spending $5.8 billion on education in 2015.
Praising Utah’s booming economy, which he shepherded through the Great Recession, Gov. Gary Herbert on Thursday revealed a $14.3 billion budget proposal that would allot the majority of the state’s new revenue to education.

With several students seated before him, Herbert unveiled the budget in the library at Granite Park Junior High. Saying the state, which has the second fastest growing economy in the nation behind the oil-boom towns of North Dakota, has weathered the worst of the recession’s “body blows,” Herbert announced that in 2014, Utah raked in $638 million in new tax revenue.

The lion’s share of this surplus—roughly 68 percent—will go toward education, he said. This will bring the state’s total contribution to public education to $5.8 billion, with $161 million in new funding going toward per-pupil spending, a 6.25 percent increase over the current fiscal year. This jump, Herbert said, is the largest increase in education spending in the past 25 years.

Herbert reiterated his oft-spoken dedication to education, saying it remains his No. 1 priority. To that end, however, he said Utah’s economy must continue its vigorous march upward. He pledged to remain friendly to business and maintain his “laser-like” focus on growing the economy.

“Our economy is one of the best, if not the best, in America today,” Herbert said.

Along with bolstering spending in education, Herbert said he would place $8 million into the state’s reserve vault, bringing its total to nearly half a billion dollars.

When the state legislature takes up the budget in its upcoming session, Herbert challenged them to begin hammering out a 10-year education plan.

Herbert’s budget, which he called “rational, reasonable and responsible,” contains no new taxes, though he foreshadowed his support to “recapture” some of the money that’s been lost to gas taxes since the state last tinkered with that fee nearly two decades ago.

He said a possible rise in the gas tax, or a sales tax increase, could help pay for transportation and infrastructure projects that by 2040 will suffer from a nearly $8 billion shortfall.

On the same note, however, Herbert urged the legislature to slash millions in earmarks for transportation and other state services. His motivation for doing so, he said, was largely for transparency.

According to Herbert, 19 percent of the state’s $2.2 billion general fund has been earmarked for scores of projects and departments and for years has not gone under a microscope. He says the legislature should free up this money, roughly $94 million, so that a discussion about its destination can take place.

“There’s no discussion on how we use the money,” he said. “Those dollars need to compete.”

Nearly 100,000 of the neediest Utahns who lack any health insurance could see hope in Herbert’s budget. It calls for spending $4.6 million to get Herbert’s Healthy Utah Plan off the ground. The plan—which instead of expanding Medicaid coverage to the uninsured would provide money for them to purchase plans from private insurers—would force some recipients to pay higher co-pays, premiums and get jobs. Many of these requirements are not allowed under Medicaid, and required Herbert to seek permission for the federal government to put in place.

As Utah lawmakers have quibbled over President Barack Obama’s health-care reform laws, the state has abandoned hundreds of millions of dollars its residents paid in taxes to the federal government that would have come back to Utah to help pay for health insurance. If legislatures don’t approve Herbert’s plan, Utah would forgo another $446 million of its own money—achieving little other than a colossally expensive thumbing of the nose to Obama. The uninsured, though, would be the ones left in the wash.

The state’s prison population, growing at six times the national average, and sporting a hefty 63 percent recidivism rate, also concerns Herbert. He said $10 million is allocated in his $263 million corrections budget to help alleviate recidivism, while $46 million is allocated for the efforts afoot to relocate the Draper prison.

With recent protests around the country over police killing unarmed citizens, Herbert says $1 million will be spent on arming each and every state trooper with a body camera. This goal, he says, could take several years.

Herbert’s full-steam-ahead rhetoric on ensuring Utah’s economy continues to grow at its breakneck pace of around 3.7 percent will run into one problem: environmental constraints. The biggest, he says, is water.

“Water is the only limiting factor we have to growth,” he said.

Herbert did not cite any new water projects, instead saying $11.2 million will be spent to review and rehabilitate existing dams and reservoirs, while $600,000 will be dropped on projects to ensure there is enough clean water for the state’s burgeoning population. An additional $440,000 is allocated to reducing a backlog in water rights complaints.

Northern Utah’s filthy air also received some attention. Herbert plans to spend $1.5 million to help businesses replace polluting machinery and for residents who rely on wood burning as their sole source of heating, to convert their stoves to cleaner fuel. He said $750,000 would be spent on research because “sometimes it looks a little soupy out there” and the truth about that haze should be based on “science and data.”

Herbert reiterated that Utah’s air quality woes are the responsibility of individuals as well as businesses. And he acknowledged that the polluted air, while harmful to health, “slows down our ability to grow our economy.”

This last sentiment, though, hasn’t seemed to bear itself out. Utah’s economy, he says, has grown wildly partly because Utah is kinder than any other state to business. This is not only true for low corporate income tax rates, but for environmental regulations.

And, for his part, Herbert has little intention of letting up. He said he doesn’t see any reason why Utah’s economy won’t continue to grow massively. And with more people, businesses, cars and homes contributing to the degradation of the state’s natural resources and air, it will be a hard road ahead for Herbert to prevent what called a “diminution of our great quality of life.”

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