State lawmakers go into special session today to close a $272.4 million budget deficit. They should feel thankful it isn't more, considering the mammoth deficits facing other states, notably California.
They also should feel a bit proud of themselves. Utah typically is ranked among the nation's best-managed states, and the Legislature deserves some credit for this. During the last session, lawmakers saw economic storm clouds on the horizon and made provisions. They appropriated $100 million for public schools that was not to be spent. It was set aside in case of a shortfall. They piled extra cash into the state's Rainy Day Fund, and they decided to pay for highway and capital needs with cash, leaving untapped bonding capacity in place for hard times.
All of that will help, but it won't allow lawmakers to avoid difficult decisions today. We don't pretend to have all the answers, but here are some general guidelines to consider:
• Do not enact across-the-board cuts on state agencies. Already, the governor has talked about a 3 percent cut. Lawmakers have variously called for the same or more. Across-the-board cuts are lazy governing. Agencies are not all equal, just as the programs and services they provide are of varying degrees of relative importance. Some expenditures, for example, are needed in order to leverage matching federal funds. Cuts to these programs in reality would go much deeper than planned. Human service needs tend to grow during tough times. These should not be cut.
• Avoid accumulating too much debt. It was wise of lawmakers and the governor to pay cash for construction projects during the last session. It may be necessary now to bond a bit to cover those costs. But be prudent.
• Avoid the Rainy Day Fund, for now. It may come in handy next year.
• Don't raise taxes or fees. The first part of that suggestion hardly needs to be stated. We would be shocked if lawmakers even spoke of a tax increase. Not only would such a thing be political suicide just weeks before an election, it would be the worst thing for a struggling economy. But fees have an impact, as well, and lawmakers seem less reticent to raise those.
The last time the state faced a deficit, six years ago, the economic slowdown was caused by a combination of factors, led by the terrorist attacks of 9/11 and the sudden drop in high-tech stocks. The current national crisis makes those look like the good old days. The governor at the time, Mike Leavitt, was optimistic that things would improve quickly, and he was right. This time, however, the nation's troubles (which inevitably affect the state) are much more serious.
For that reason, lawmakers would be wise to avoid using up all their deficit-fighting tricks at once. Utah's economy remains stronger than that of many other states, but the state should budget and plan for a prolonged slowdown.