Utah Legislature: Lawmakers balk at Herbert's road bonding plan

SALT LAKE CITY — Most Utah legislators really like Gov. Gary Herbert's budget plans, but his idea of borrowing another $100 million for roads "is dead."

That's the assessment of House Majority Kevin Garn, R-Layton, and Senate budget chairman Lyle Hillyard, R-Logan.

"We just don't have the votes (in the House) to go further in debt. We're approaching our statutory debt limit," Garn said.

Hillyard said he's personally against more state borrowing, "and I don't know of any Republicans" in the Senate who advocate it.

"There's a lot of good in the governor's budget. But not this," Hillyard added.

Herbert wants to bond for $25 million in the current budget year and $75 million in the next fiscal year and use that $100 million in one-time monies to offset part of the $700 million state budget shortfall.

While Utah has been frugal in spending during these hard financial times — and has a balanced budget — the example of the federal government's spending is cautionary, GOP lawmakers say. The current federal deficit is around $1.3 trillion.

As Herbert acknowledges, while his recommended 2010-2011 budget is balanced, it still uses around $450 million of one-time monies. In effect, that means $450 million in the 2011-2012 budget to be adopted in the next Legislature must be made up some way — through future tax hikes, natural growth in state revenues, further cuts in programs or a combination of all three.

Either way, "That structural imbalance ($450 million with the bonding, $375 million without) really worries some of us," said Garn.

"It's poor public policy" to borrow for one-time monies and then put that money into ongoing state programs, said Hillyard.

But, Hillyard adds, if February revenue updates show that the state is an additional $400 million short, "then it becomes panic city around here," and legislators may be looking at all kinds of ways to fill the growing budget gap, including more borrowing. "But I don't think it will be that bad," Hillyard said.

The state can legally borrow more, but Jonathan Ball, legislative budget director, said legislative bosses want to be fiscally conservative and stay under 85 percent of the legal borrowing limit.

"We're at 76.5 percent, and there's good reasons not to go higher — it helps keep Utah's AAA bond rating," which in the long run saves taxpayers a lot of money on interest, Ball said.