Despite the financial storm of a world economy in recession, some lawmakers are still hesitant to use the state’s Rainy Day Fund.
Legislators are deliberating the severity of impending state budget cuts, floating the possibility of a 19 percent cut across the board during the next two years. On the other hand, Gov. Jon Huntsman Jr. and many of Utah’s Democratic lawmakers are suggesting less drastic measures. Huntsman proposes subsidizing the budget with $80 million of Utah’s $412 million rainy day fund to decrease cuts to 11 percent across the board during the next three years, giving programs more time to adjust.
If the governor’s plan is put into action, it could give much-needed relief to programs facing debilitation or elimination and still leave three-fourths of the emergency fund intact. Opponents of the proposal cite the possibility that the economic climate might get worse, and say that we should save the rainy day fund for later. Even if things get worse, why not use a portion of the fund now to curtail losses and possibly prevent the crisis from growing? In the case of health care, alcohol and drug rehabilitation and other preventative programs, drastic cuts will only cost the state more down the road, undermining the Legislature’s good intentions.
In the case of higher education, subsidizing cuts with the Rainy Day Fund is an investment in the future work force, which increases the chance of a rebounding economy. Refusing to use the fund because “it might get worse” effectively makes it useless until Armageddon. It is like having fancy dishes you never use. After all, it’s raining right now.
The Rainy Day Fund grows every year the state sees a budget surplus. In the event that the economy turns around, it won’t be difficult to replenish. On the other hand, rebuilding decimated or terminated state programs won’t be easy or inexpensive. Even the future state of the Rainy Day Fund has much to gain from investing in state programs now instead of waiting until they are underwater. The Legislature should adopt Huntsman’s proposal to tap into a portion of the fund, ensuring budget cuts are rational and not abrupt.