Legislators advance bill to cap spending

A GOP-priority bill that would change the state's spending cap law passed out of a House committee Friday, even though some members said it may actually expand the state's spending capability.

Utah has been criticized by the nationally conservative CATO Institute and local Republicans for expanding state spending too much in the 1990s, a criticism taken to heart by House GOP lawmakers this year.

Rep. Greg Hughes' HB66 is endorsed by the House GOP caucus. And with 28 co-sponsors, it's likely to pass.

Hughes, R-Draper, said the bill does two things: Removes the statutory growth cap off of public education spending and removes individual income from the growth formula in current law.

That would allow more money to flow into public schools, while holding down government spending in other areas. HB66 would allow overall annual government growth of 4 percent to 5 percent, he said, in line with historical trends.

But Richard Ellis, director of Gov. Olene Walker's Office of Planning and Budget, said HB66 could threaten Utah's AAA bond rating. Oregon and Washington had their state bonds downgraded because they have strict spending limitations, he warned.

Ellis added that just like growing families, state government may find itself in need of more revenues at different times. And while HB66 "may not tie our hands behind us, it tethers us" to a short lease that could harm lawmakers' flexible reaction to setting budgets.

But Hughes points out that HB66 still allows each legislature to "suspend" the spending caps, just as the 1997 Legislature exempted the Centennial Highway Fund from the current spending cap so the state could start its $2-billion-plus reconstruction of I-15 in Salt Lake County.

In truth, even though the Legislature adopted a spending restriction law in 1987, its cap formula has been changed several times since. Even in the high revenue days of the 1990s lawmakers have spent as they saw fit and didn't exceed the generous cap.

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