The good news is the state budget outlook includes a tiny bit of growth in revenues in 2011. That means hard economic times have at least been stemmed in Utah.
The bad news, of course, is that those revenues are nowhere near where they were before the recession, and that reality has to be the lens through which state lawmakers and the governor view their budgeting responsibilities as they prepare for the next legislative session.
And while Utah's politicians have been more responsible than those in many other states, putting the state in a relatively good position to encourage private-sector growth, it still faces a tough uphill climb because of its use of stimulus funds and other one-time money sources during the hard times. All told, the state is planning to spend about $313 million in one-time funds to help balance this year's budget. That money just adds to the hole that must be filled next year before the state can begin to take care of its needs. Without a return to the boom times of a few years ago, the state can't continue that course without making more significant cuts to programs.
Lawmakers were called into special session Wednesday to accept $101 million in federal stimulus money for public education. Lawmakers were to use $50 million of that to cover a hole in this year's school budgets. While it makes sense for the state to accept this money, it doesn't represent a long-term strategy.
To put it in terms that apply to the average person, this is like getting a gift from a rich uncle to help pay this month's bills. Those same bills will come due again next month. The only real solution is to cut expenses to meet income.
In recent years, state leaders seem to have adopted the philosophy that good times will soon return and that the judicious use of one-time funds could act as an economic bridge that helps the state survive in the meantime. But now it is becoming clear that the old economic model, in which recessions were slight and recoveries robust, might not apply this time.7 comments on this story
Growth is coming slowly. The years when Utah's revenues would multiply by double-digit percentages over the previous year do not seem to be returning.
The governor and the Legislature have held the line on taxes, which ought to help Utah recover. The state doesn't face the huge budget deficits that plague Illinois or California. But if the state's economy has finally bottomed out, as some experts are saying, it is clear that the state budget has yet to reach its own bottom. Tough decisions remain to be made.