As governors go, Utah’s Gary Herbert has relatively few budget worries. By any measure, the state ranks among the most fiscally sound in the nation, and its prognosis includes steady growth.
Last month, 24/7wallst.com ranked Utah fifth in exports per capita, lauded its business-friendly tax laws and its educated populous and noted that it has a low crime rate. Unemployment has now dropped below 5 percent, which is far below the national rate.
All of which makes for a favorable environment in which to draft a responsible budget, which is what Herbert has done. His proposal, unveiled this week, gives proper priority to public and higher education, making allowances for the 10,300 new students expected next year in the public schools. He would even appropriate $2 million toward researching ways to deal with the bad air caused by winter inversions — a timely suggestion as temperatures drop along the Wasatch Front.
But the most important part of the governor’s budget proposal is a section that calls attention to and questions the growth in earmarked state funds.
Many people likely think of earmarks only in terms of congressional spending, where the terms is synonymous with pork. But this is something different. On the state level, lawmakers have from time to time passed laws that require a certain amount of money or percentage of revenue be earmarked for a specific government purpose.
What’s wrong with this? An earmark doesn’t require politicians to examine and weigh relative priorities or to hold public hearings. It doesn’t require any human beings at all. It could be, and in fact is, handled nicely by a dispassionate computer. In times of crisis, earmarks limit the state’s ability to nimbly redirect resources.
State lawmakers write the final budget. If history holds, they will pay little regard to the specifics of the governor’s proposal. But we hope they take Herbert’s analysis of earmarked funds to heart and begin questioning the value of what might be termed robo-budgeting.
Some earmarks make sense. For instance, all state income tax collections in Utah go toward public and higher education. That is not unreasonable in a state where large families require large expenditures on education. But as the governor’s analysis notes, other earmarks have grown considerably over the past 15 years, now consuming $531 million of the General Fund.
Most of these go toward transportation. Two years ago, the Legislature overrode Herbert’s veto and passed a bill that requires 30 percent of all new growth in sales and use taxes go into a transportation investment fund. In the next fiscal year this will eat up $125 million that lawmakers can’t spend on anything else. Other earmarks direct funds toward water development, law enforcement and certain health and economic development programs.
None of these is a necessarily an unworthy purpose. All have their place as appropriate government expenditures. But they should be considered, weighed and justified against the state’s priorities as a whole.
As the governor noted, these funds tend to receive less scrutiny than those that have to compete for allocation. If earmarks continue to grow, they could impede the state’s ability to adapt to changing conditions and remain a fiscal leader.