To hear Utah Gov. Jon Huntsman Jr. tell it, his proposed 2007 budget is "a lot more Santa than Scrooge." Indeed. The governor has proposed record spending increases for education and transportation, along with a $60 million tax cut. He also wants cost-of-living pay raises for public employees and more money to stimulate Utah's economic development efforts.
But as the state budget process goes, the governor doesn't have to deliver a dime. Rather, his job is to whet expectations against what the Utah Legislature ultimately delivers. Setting the bar high portends some lively budget debates in the upcoming legislative session.
According to the governor, several areas of state government need to catch up from the lean years. His $9.6 billion budget proposal envisions a record $271 million increase for Utah's public schools system, which includes a voluntary full-day kindergarten program at at-risk elementary schools, a math initiative for grades 4-6 and ongoing funds for the K-3 reading initiative. Each is a worthwhile investment in Utah schoolchildren.
Huntsman has also proposed $223 million in new money for road and transportation projects -- $120 million of which would go into the state's Transportation Investment Fund, and $83 million would be in general obligation bonds for other construction projects.
Even as Huntsman announced his budget recommendations Friday, legislative leaders posed critical questions about the governor's proposals.
For one, they question bonding for transportation projects when the state is projected to have a $344 million revenue surplus.
Likewise, lawmakers, who in recent years have had to cut budgets to balance the state's financial plan, are understandably wary of sizable budget increases. It's hard to argue against a healthy budget infusion in a public education system with the lowest per pupil funding in the nation. Yet, lawmakers must guard about overextending budgets that have to be sustained on an ongoing basis.
Another point of contention is tax cuts. Huntsman's budget proposes $60 million in tax cuts as part of a tax code overhaul that would include a flatter income tax rate and moving toward the elimination of the food tax. Lawmakers have publicly discussed tax cuts of at least $100 million.
Huntsman says he is not wedded to a particular approach on the sales tax on food, but his budget suggests a phaseout, considering it would take $160 million to remove it completely. While public opinion polls say most Utahns favor removing sales tax on food, altering the sales tax formula is a political minefield because it is a primary revenue source for cities. In some very small towns in Utah, sales tax revenue from grocery store sales is by far the largest source of income for city budgets.
While the governor and state lawmakers are somewhat limited in budget flexibility since public education and health consume the largest slices of the budget pie, Huntsman has set down an ambitious agenda that articulates his priorities for the state of Utah. He wants, we presume, what most Utahns want -- world-class public and higher education systems, a prosperous economy, an effective and efficient government and a transportation system that keeps pace with Utah's needs.
The challenge, lawmakers will attest, is working toward those goals but balancing the budget