Gov. Gary Herbert recommends a $14.8 billion budget for next fiscal year, a 2.7 percent increase over this year’s state spending plan of $14.4 billion.
Speaking Wednesday morning from Salt Lake Community College South (the old South High School), Herbert said he’s once again stressing education funding – add public education to universities’ spending and 70 percent of his budget is to make Utahns of all ages smarter.
He announced an effort to provide $1 billion more for public schools over the next five years – $200 million a year in new overall funding, an aggressive new plan to improve Utah’s public education system.
But Herbert, a Republican, who seeks re-election in 2016, suggests no tax hike for schools (or anything else) and no tax cuts in his 2016-2017 budget.
No significant fees, like car registration, should be increased, either.
Still, between the $739 million tax collection surplus in the 2015 Legislature and $561 million surplus coming into the 2016 Legislature, that’s $1.3 billion in extra money over two years and no tax cut proposals coming from either our Republican governor or GOP legislative leadership.
Asked by UtahPolicy why not, Herbert said the state’s economy is running strong, and it makes no sense to fiddle with the racecar’s performance.
Utah has the 10th lowest tax liability among the states, said Herbert. Our economy is one of the best in the nation, leading in job growth for eight straight months this year.
“We are the fastest growing state” in percent of new kids coming into schools.
“All factors combine,” the governor added, “Now is not the time for a tax cut. We are investing now.”
When Herbert and the Legislature cut budgets during the Great Recession, they told teachers, state workers and program advocates to be patient – as the state’s economy rebounded they would be rewarded.
“We’re rewarding them now. The economy is humming along. We have the right balance” in taxation and growing government programs, said Herbert.
He does suggest, as he did last year, a tax shift: The sales tax earmark for transportation should be taken away. He was unsuccessful with GOP legislators last session (Democrats strongly supported that request), perhaps in part because he wanted the money to go for general state government – nothing particular.
This year Herbert pulls a smart political move – he ties shifting those road monies — $50 million over five years — to early childhood development for at-risk kids.
He’s asking who doesn’t support $10 million next year for needy young children?
Let his Republican colleagues in the House and Senate answer that one.
As last year, Herbert promises that no UDOT road projects will be harmed, or even delayed, by taking away the sales tax earmark.
Herbert’s budget has a 4.75 percent increase in the Weighted Pupil Unit; the WPU being the basic funding formula sent out to Utah’s 41 individual school districts.
This includes $91 million in new money to pay for anticipated growth in student numbers for the fall of 2016 and $21 million in public education shortfalls due to higher-than-estimated new student enrollments this past October.
The WPU also reflects teacher pay increases, decided by each school district.
Herbert wants to give state workers, including college employees, a 2 percent pay hike. He includes extra money for “hot spots” in pay increases for corrections workers.
State Highway Patrol troopers should get 5.4 percent pay hikes, needed to retain current state lawmen and encourage qualified folks to apply for trooper job openings.
For all the new spending, Herbert is not putting forward money to move/remodel homeless shelters.
Special Salt Lake City/County homeless task forces want around $23 million to relocate some facilities – now mostly gathered just south of the Gateway Center on the city’s downtown Westside.
House Speaker Greg Hughes, R-Draper, and other lawmakers are talking about providing that money out of the surpluses the 2016 Legislature will have when convening Jan. 25 for the annual 45-day general session.
Herbert budget director Kristen Cox told reporters during a budget briefing Tuesday that it’s too early to dedicate specific funds to the homeless relocation effort – studies are yet to be completed, a plan adopted.
There are other state funds available now to aid in the planning effort, she said.
You may recall that last year GOP legislative leaders took, for the first time, monies off the budget table in the so-called “revenue trend” – growing tax collections that legislative economists believe can’t be counted on in future years.
That “above the trend” line amount in the 2015 Legislature was $116 million.
That caught Herbert’s budget folks off guard – they weren’t counting on the new “trend” take-backs.
This year said Cox, her staff worked with legislative budgeters and they agree with the $53 million above-trend legislative leaders voted Tuesday to withhold – and dedicate for state building needs later in the fiscal year.
Cox said Herbert may want to spend that $53 million differently than legislators – and talks over that will continue.
The governor touches more than a few hot-button issues in his spending plan:
— Herbert was the only GOP governor not to demand a “pause” in Syrian refugees coming to their state.
He puts $360,000 into his budget for the special screening of refugees.
— He puts in $6.2 million for air quality.
— $6.5 million to collect water data in preparation for the state starting up a special water development funding program.
— And he allocates $10 million for Medicaid expansion – the number needed to “fund the gap” between two Obamacare programs.
Herbert said more monies could be found if House Republicans will go along with his Healthy Utah – killed last session – or if more cash is needed for health care for the lower-income Utahns.
“This issue won’t go away,” said Herbert, who failed in moving the ball with his Gang of Six/GOP leadership effort this past summer.
Herbert wants no bonding next year, not in general obligation bonds nor revenue bonds.
He suggests only two new state buildings be constructed: A Utah Valley University performing arts center ($30 million) and a community college career center ($41 million), the money for both coming out of revenue surpluses.
Even though Herbert wants $141 million more for higher education, Cox said that doesn’t ensure no increases in tuition next year.
Herbert is putting $9.2 million specifically to minimize tuition hikes, which could still come this spring.
That is up to the Board of Regents, an appointed group that oversees the state’s colleges and universities.
However, Herbert is putting in more money for special scholarships, which in turn will help long-term students in need pay for the last few college courses they require to get a degree.
Finally, Herbert et al. have been criticized by some conservatives for the amount of federal money in Utah’s state budget.
Cox points out that federal funds make up 27 percent of the governor’s suggested fiscal 2017 budget, down from the recent average of 28 percent.
Herbert said a recent Pew Research Center study found Utah was the least dependent on federal money of all the states.
“The claim that we are beholden to the federal government is a myth; not true,” said Herbert.
A special legislative committee continues to study where federal funds are coming from, what they are spent on, and how to reduce that amount over time – as Congress and the president struggle with huge federal government budget shortfalls and a growing national debt.
In short, Herbert said Utah is in great shape financially, with $528 million in our Rainy Day funds, a balanced budget with surpluses coming in, and no ongoing programs paid for with one-time surpluses.
“My budget is rational, reasonable and responsible, as well as responsive” to the changing times we live in, the governor said.