Fixing the 2010 Budget
Utah finds itself in yet another deep budget hole, this time to the tune of nearly $1B. This, of course, sets of the debate of if the Legislature should cut spending, raise taxes, or a bit of both. Sen. Steve Urquhart, who I have tremendous respect for, has called for his colleagues to oppose any new tax increases, focusing instead on finding places to make cuts. His rationale is that the rate of growth in state government expenditures has outpaced population plus inflation. While this sounds like a sound argument, it doesn’t mesh with some stark realities.
The demand for state services is not a function of just population and nowhere is this more obvious than in our transportation budgets. As we continue to live in the burbs and commute to work, vehicle miles driven has actually grown as much as twice as fast as population. The cost of construction materials has also risen dramatically higher than inflation as China and India consume more of the world’s steel and concrete supply. Education has also taken a hit as more ESL students enter our school systems, students that have a significantly higher cost to educate. (Large immigrant populations account for a significant part of New York’s high education spending and drag their results down.) A rigid formula leaves little room to address these kinds of variances.
We should also consider that despite all of the posturing, Utah’s state budget has been fairly stable as a percentage of state GDP. During the last two decades, it has fluctuated from a low of 15.5% to a high of 17.2%. That is an amazing amount of restraint given the large surpluses that we had just a few years ago. Whether this is because of or despite the hand-wringing about state government spending is anyone’s guess, but the caricature of free-spending double-talkers seems better suited to Congresscritters than it does our state government.
While I can certainly appreciate the sentiment against raising taxes unnecessarily, you can’t just sweep that option off of the table wholesale. I hope our state representatives and senators will bear this in mind as they start making tough decisions next month.