Gov. Jon Huntsman Jr. encouraged lawmakers to use caution and sound judgment when balancing Utah’s deficit budget in his State of the State address Tuesday night at the state Capitol.
But he also said he hoped the Utah Legislature and Utahns would look to other options to minimize the impact of coming budget cuts.
“Let’s not forget, unlike many other states, we have tools we can utilize, and with these options, we have added flexibility in minimizing impacts to our most critical priorities,” Huntsman said.
Kim Wirthlin, the U’s vice president for government relations, said the U is advocating the use of these alternative choices. She said these options include using Rainy Day Funds, bonding, new revenue funds and “anything else to minimize the base cuts.”
If the Legislature follows Huntsman’s recommendations, budget cuts for this year would be near 1.5 percent, Wirthlin said.
According to Utah law, it is required for the Legislature to keep a budget out of the red at the end of the fiscal year in June. Otherwise, the governor and the Legislature might be accused of mismanagement. To bring the budget back in line, lawmakers have proposed a 7.5 percent one-time budget cut for the rest of the fiscal year.
Kirk Jowers, director of the U’s Hinckley Institute of Politics, said Utah lawmakers would be smart to use bonds as a way to obtain cash revenue and limit budget cuts. Bonds are loans that states, cities and corporations can obtain to build roads and buildings.
Jowers said Utah has an AAA bond rating, the highest possible, at a time when many other states have no borrowing credibility. Cash that would have previously been used to build economy-stimulating roads and buildings could then be put to softening budget cuts.
However, many legislators are wary of using bonds, fearing more debt is not the correct solution.
“I don’t think it is raining hard enough,” said Sen. Allen Christensen, R-North Ogden. “We can find cuts that are not that painful and then use the Rainy Day Fund on a day when it is a tsunami rather than a small rainstorm. I think that attitude is representative of most of the legislators.”
Despite this disagreement with lawmakers, Huntsman stressed the need for bipartisanship.
“In a time of financial distress, inadequate health care, a shaky housing market and apprehensiveness, we must reach beyond traditional political boundaries in seeking solutions that are uniquely our own,” he said.
Huntsman said Utah needs to have the same type of fighting spirit the U football team had in its victory over Alabama in the Sugar Bowl.
“They were told they couldn’t compete, they couldn’t win,” he said. “They represented Utah well and, guess what? They did win. On and off the field, the young men of the University of Utah football team have demonstrated service, teamwork and perseverance.”
Huntsman again referred to the U when talking about his plans to place Utah at the forefront of utilizing natural resources.
“We will be the epicenter for energy development,” he said. “To support this energy development, innovation at our higher education campuses is running at an all-time high, like technologies that will ensure the long-term viability of our abundant natural resources. The University of Utah is now second only to MIT in commercialization of cutting-edge research.”
Wirthlin said she was thrilled to hear Huntsman talk about higher education and the U specifically.
“Typically, when you hear talk about education, it is only about public education. So it was great to hear him mention universities as an economic stimulus,” she said.