Utah Gov. Gary Herbert describes the $11.3 billion state budget he has proposed for the 2010-11 fiscal year as "a responsible budget based on the circumstances we find ourselves in."
The spending plan is essentially flat. Herbert proposes no increases in taxes or fees. The plan also contemplates using a total of $266 million in one-time money, which includes $100 million set aside two years ago to fund education. It also proposes borrowing $100 million for road projects and would require corporations to pay their income taxes quarterly instead of annually.
Herbert says the state's economic projections suggest that the economy has bottomed out and tax revenues are forecast to increase $34 million during the 2011 budget year.
The proof is in the pudding, of course. Nothing would please Utahns more than to learn that the state has turned the corner, economically speaking. Until that is realized, it makes sense to protect public and higher education, as Herbert's budget does.
As state budgeting goes, the governor sets the tone for the deliberations and the Utah Legislature ultimately decides. For the immediate future, Herbert has ordered state agencies to cut their budgets by 3 percent. The state must somehow close a $693 million budget gap over the two years.
Herbert says he opposes any tax hike as a matter of principle. It is hoped that lawmakers will take a different tack when it comes to the state's tobacco tax. Utah's tobacco tax should be on par with neighboring states. Moreover, increases in tobacco taxes have been shown to discourage youths from taking up a habit that ultimately consumes a significant share of public health resources.
It is curious, at least, that the reading of economic projections is so profoundly different between 2001 S. State and 350 N. State. Salt Lake County, which has held the line on tax increases for several years, passed a small tax increase to address its downturn in tax collections. The County Council also cut positions, trimmed salaries and eliminated contributions to employees' 401(k) programs. Meanwhile, the state's executive branch says it can hold the line without raising taxes and better days are on the horizon.
Herbert says he believes his budget proposal is a common sense approach to the state's economic realities that trumps partisan politics. In many respects, it is. But as Herbert enters the campaign season, it remains to be seen if the taxpaying and voting public take a similar view.