Robert Gehrke, of the Salt Lake Tribune, reported this evening that new Utah Governor Gary Herbert has organized an All-Star Team, called the “Bangerter Commission”  (aka Herbert’s Hackers), to make budget cutting recommendations to the state legislature.  This All-Star Team is stacked with raw talent.  The Team?   Read THIS Gehrke article.

Here is the roster:

Former Utah Governor Norm Bangerter, Wikipedia

Fraser Bullock, Wikipedia, Sorenson Capital

Nolan Karras, Wikipedia

State Senator Dan Liljenquist, of UTAH WASTE BUSTER fame.

State Representative Ron Bigelow, Wikipedia, House Co-Chair Executive Appropriations, CPA for the Church of Jesus Christ of Latter-day Saints

FYI:

“The larger lesson in all this is clear.  Government should steer clear of enterprises that properly belong to the private sector.”    (Daily Herald Editorial)

Read THIS Daily Herald Editorial.

J—- and J—-:

Thank you for your email.  I appreciate the concerns and questions of people in our community.

Currently, budget shortfall projections for the Fiscal Year 2011 (FY11) stand at approximately $700M.  FY11’s budget period is between July 1, 2010 and June 30, 2011.  These figures are based on projected revenue collections by a Committee comprised of the Governor’s Office on Planning and Budget (GOPB), the Legislative Fiscal Analysts Office (LFA), and the State Tax Commission.  Some have speculated that available one-time on-hand resources (it’s like pulling money out of a savings account) could “soften the blow” a bit, requiring the legislature to raise taxes by only $100M this coming General Session.  Some have suggested that the “necessary” increase of $100M to the state tax base should come from such targeted taxes as Cigarette/Tobacco Taxes, increasing the tax on alcohol consumption, or even replacing the Sales Tax on non-prepared foods (removed just last year).  Read more about this speculative proposal in this Deseret News article by Bob Bernick, http://www.deseretnews.com/article/705325627/Tax-increases-looming-for-Utahns.html.

I think this is the wrong approach.  I’ve maintained “target taxing” is bad tax policy.  (http://underthedome.org/?p=694)  The Utah Taxpayers Association (and its representatives) have consistently (and constantly) drummed over the years that “good tax policy” LOWERS THE RATE & SPREADS THE BASE.  Logical.  A fixed tax burden shared among a larger taxable population lowers the tax burden for everyone.  Logical.  “Target taxing” doesn’t accomplish this principle.

As for the state’s two “Rainy-day” surplus funds (Education and General)…the money is sitting there–about $425M.  We clearly have the ability to spend it.  But, should we?  Current projected budget gaps (FY11) represent ON-GOING appropriations shortfalls.  (“On-going” means: the state’s [tax] salary has decreased, the perpetual “paycheck” has been cut by a certain percentage with no hope of it returning to “normal” levels any time soon.)  The question then is…do we plug perpetual or “on-going” budget shortfalls with a temporary, one-time surplus fund(s) fix?

I think this is the wrong approach.  Any time we use one-time monies to “plug a gap” (on-going) we place ourselves in the position of creating “structural imbalance” within the state’s budget.  The state cannot afford to put itself in this predicament.  (Since the legislature is Constitutionally required to balance the budget every year, this presents an intesting and potentially dangerous dynamic.)  When the state legislature utilizes temporary (rainy-day) dollars to justify today’s problem not knowing (or predicting) what it can count on tomorrow (FY12) in terms of cash flow, it is being reckless and irresponsible.  What happens when the same shortfall exists in FY12?  and, FY13?  Do we cut the budget then?  Sure, we can.  But, we can also do it now.  Procrastinate?  Sure.  We can leave this problem for the next legislature…or we can be prudent, and make the necessary budget cuts for FY11 (and beyond), now.  (For additional reading link to Senator Urquhart’s blog http://steveu.com/blog/2009/08/will-utah-raise-taxes.html)

So, the short answer to your questions…DON’T RAISE TAXES, VERY (emphasis on “very”) MINOR DIPPING INTO THE RAINY-DAY FUNDS, and FURTHER CUTS TO THE STATE BUDGET (to maintain structural integrity).

Thank you, again, for your questions.

Respectfully,

Rep. Craig Frank

Senator Greg Bell appeared before the state Senate’s Government Operations Committee this morning chaired by Senator Pete Knudson.  Bell, Governor Gary Herbert’s nomination for Lieutenant Governor, clearned another legislative hurdle on his way to confirmation in Extraordinary Session by the full Senate scheduled for Tuesday, September 1st.  Following Bell’s Senate confirmation, he will be sworn in as Utah’s seventh LG.

Listen to recorded proceedings of Sen. Greg Bell’s hearing this morning.  Link HERE.

Read Deseret News article HERE.

Several state political leaders have suggested that because of projected state revenue shortfalls projected in next year’s budget, it might be appropriate to raise the tax on Cigarettes.  Currently, the state cigarette taxes is 69.5 cents per pack (20 sticks).  Doubling the cigarette tax would bring Utah closer to the national average.  But, is this really the question?  Or, are there other ways to solve the state’s budget woes without targeting 11% of the state’s population of smokers?  Alcohol?  Caffeine?  Further budget cuts in “non-essential” services?

Previous blog:  Smokin’ A Butt…Gonna Cost You More?  Link HERE.

Read this Deseret News article and then weigh in…  Link HERE.

The memory is fading, but I still seem to remember Bob Bennett promising would-be supporters and voters when he started his gig in the U.S. Senate that he would only serve two terms…that’s 12 years to you and me.  At the end of his third term (and begging for more), Bennett is “not quite finished” back in “DC,” there’s “more to do” back there.

Breakfast at Mimimi’s.   He told us he’s primed and ready for years 19 to 24…and asked for our support.  I didn’t know oatmeal could get lodged in your throat like that.   Bennett literally laughed at a small group of state legislators a few months back (meal under $25), when the suggestion was made that Congress should consider a Balanced Budget Amendment.  (After all, the Utah State Constitution requires that kind of fiscal responsibilty each year from the legislature.)  I gave my contribution back on the way out of the restaurant…didn’t even look in the envelope.

ps:  I don’t know what it is about this wall…but, I sure love smacking my head against it!

In order to stop “potential” harassers from exploiting his name…and political future potential, Representative Jason Chaffetz (R-UT) took some preemptive steps to secure the family (and given) name.

I’m a little surprised he didn’t reserve: 

 JasonForAmbassadorAndPlenipotentiaryOfTheUnitedStatesOfAmericaToThePeoplesRepublicOfChina.com

I mean…if he’s trying to cover all the bases.

Read HERE.

Moments ago, Utah House Speaker David Clark read a prepared statement in the Executive Appropriations Committee meeting (approx 1:40 pm), regarding a joint position between House Majority leadership, Senate Majority leadership, and the Governor’s office, to fully fund the New Century Scholarship.

Speaker Clark stated: “Earlier today the Majority Legislative leadership, and Governor Herbert, instructed the Utah Board of Regents to fully fund the New Century Scholarship.”    (timeline 12:02)

Speaker Clark also stated that funding for the appropriate and necessary adjustments for the scholarship would be located within the High Education budget.

Stay tuned.

Senator Steve Urquhart’s thoughts…

Link HERE to Utah State Senator Steve Urquhart’s blog on the New Century Scholarship.  Interesting proposal.

Rep. Frank’s continuing thoughts…

I agree, promises were made.  I agree, the NCS students under contract with the Regents should receive remuneration per that contract.  I agree, students that take advantage of this program and then following college graduation stay in Utah to work, help to bolster our state’s economy.  I agree, calling the legislature back into special session to address this issue may be an appropriate action (but, that’s up to the Governor’s sole discretion).

Reality check.  Clearly, someone, somewhere, misrepresented, intentionally or unintentionally, the financial limits associated with this scholarship/voucher program.  And, someone’s gotta pay for the associated shortfall.  Who will that be?  The State Board of Regents (Higher Ed budget adjustment)?  The legislature (supplemental budget)?  The governor (discretionary stimulus money)?   The NCS students (decreased benefits)?

The New Century Scholarship/voucher is a TAXPAYER FUNDED program.  Regardless of the outcome of this deliberation, taxpayers will pick up the tab for this scholarship/voucher.  When the legislature uses taxpayer dollars for public/private programs like this, there will always be differing opinions as to how to “appropriately” appropriate those taxpayer dollars.

Your thoughts…

Utah’s very successful voucher program is at risk.

The New Century Scholarship (or Voucher) has been a useful private school funding tool (funded with taxpayers’ dollars) since an amendment was added to the original 1999 program.  The private voucher component was added during the 2000 General Session of the state legislature in HB23 by Rep. Brad King (D-Price), allowing for scholarship recipients to use the funds at Brigham Young University and Westminster College.

Certainly, the passage of this higher ed voucher (amendment) will be one of Rep. King’s greatest legislative victories.