You knew it had to come to this.
Virtually every business, including this newspaper, has been hit. Rising prices, led by a 4.9 percent one-month increase in food prices from July to August along the Wasatch Front and an 11.2 percent hike in fuel costs over the past six months, are straining budgets everywhere, so why not government?
Last week, Gov. Jon Huntsman Jr. said he would call the Legislature into session soon to deal with what, by best estimates, looks like a $200 million shortfall in state revenues. According to news accounts, the governor wants all state agencies to cut their budgets by 2 percent, and he wants the state to bond for transportation and building projects, not to pay cash as had been planned. He doesn't recommend dipping into the "rainy day" fund, which contains several hundred million dollars.
And his plan is to not cut public education funds by so much as a dollar.
So, how bad are things really? Maybe it would help to look at how things are in other states.
• Florida is projecting a deficit of more than $1.4 billion during the current fiscal year. Without a lot of cuts, that will rise to about $3 billion next year. Gov. Charlie Crist and lawmakers face challenges on many fronts, but especially from falling state lottery revenues. Lottery money goes directly to schools, but it isn't getting the job done any more. Recently, lawmakers had to transfer $48 million from elsewhere to make up the difference, according to the Tampa Tribune.
Utahns can thank their own good sense that they didn't succumb to the lottery craze of a few years ago. The moral hazards were big enough, but the idea of relying on such a volatile source for school funding made little practical sense.
• The state of Washington is looking at a deficit of $2.7 billion and growing. According to The Associated Press, Gov. Chris Gregoire has attacked this so far by this will shock you asking state workers to work only four days a week. In Utah, Gov. Huntsman has already done that one, and the results are as-yet unknown.
• Georgia's budget crisis is at $1.6 billion. The Atlanta Journal-Constitution recently recommended a series of cuts to solve the problem, and acknowledged that lines may get longer at the DMV and public school class sizes may get larger, as well. Utah doesn't have the luxury of that last option.
• Nevada has a deficit of about $1 billion. The Las Vegas Review-Journal says the teachers' union is circulating a petition to raise hotel room taxes by 30 percent. Silly Utah, we've got hotel taxes tied up in a soccer stadium.
• But California is in the mother of all budget problems. Its projected deficit is $15.2 billion, and lawmakers were trying hard last week to finish a budget that was 11 weeks overdue. Gov. Arnold Schwarzenegger has threatened to cut all state worker salaries to minimum wage. The Modesto Bee says one of the solutions under consideration is to borrow from future lottery revenues to run the government today. (See Florida's problem above.)
These states make Utah's deficit seem as tame as a summer rain.
A few weeks ago, Senate leaders visited the Deseret News editorial board. Among other things, Senate President John Valentine said lawmakers this year put $100 million in the uniform school fund that wasn't to be spent, and they allowed agencies to carry over money they hadn't spent from the previous year. They used ongoing money to pay for buildings and roads, rather than one-time surpluses, as is customary. They also didn't borrow money for those things.
But they said education was especially important.
"The thing we learned in the last recession in 2002 was that we don't want to cut public education," Valentine said. "There's no way to say we're going to have fewer students. In fact, we've got more students."In other words, if you knew it would come to this, so did they. Now we get to see whether their planning puts Utah in a position to weather the storm relatively painlessly.