Thursday, October 29, 2009

Sutherland Institute's Prosperity Forum: Utah's Budget

I attended the Sutherland forum on the state budget this afternoon. The panelists were Representative Rob Bigelow, Salt Lake Chamber president Lane Beattie, Deputy State Superintendent Dr. Martell Menlove, and former Governor Norm Bangerter.

Lane Beattie spoke first, stating that this is "one of the most difficult years in the history of Utah". He said the state had revenues of $5.3 billion in 2007, and has dropped a billion dollars to only $4.3 billion. Budget cuts need to be the "right cuts, right time, in the right place".

He said the state funded for growth in public education, but not in higher education. A situation he thinks is a mistake since higher ed has seen large increase in demand specifically because of the economic downturn. This year the Chamber expects a 12,000 student increase in higher education, and the chamber wants more funding. They advocate reinstating the sales tax on food, indexing the tax on motor fuel, taxing coal, and rescinding other tax cuts and exemptions if even for a short period of time.

Next up was Dr. Martell Menlove, who said officially public education had a 2% budget reduction last year, but because of 15,000 enrollment growth the effective cut amounted to 7 1/2%. Without those cuts 500 additional teachers would have been hired. He proposed that public education received level funding this year.

Finally, Norm Bangerter spoke. He recognized that there are polls showing current support for higher taxes to fund education. He then told the story of when he was governor and had the same situation; polls in favor of higher taxes. So he raised taxes for education, and consequently saw his approval rating drop from 75% to 41% in just two weeks. I spoke with him about this for a few moments after the forum, and he again remarked that there is at times a disconnect with how Utahans answer polls and how they actually vote. I found this interesting coming on the heals of my recent education funding post. Governor Bangerter said he supports reinstating the sales tax on food, but also said, "I don't think we can take a general tax increase."

At the end of the panelist remarks there was a Q&A session. The most interesting part of which was when, on the heels of a questionor being told that every department should expect a lower budget, someone asked if government has a moral responsibility to needy or disabled citizens. Representative Bigelow answered that yes there is a responsibility, but the state only has a certain amount of money, and the budget must be balanced. This led to Dee Rowland, who I recognized from her time as a panelist for Sutherland's SB81 forum, to say that she saw the need for higher revenue (read: higher taxes) and thinks that Utahans would support this as well. She then asked what she and others could do to help the Legislature drum up support for raising taxes. Representative Bigelow's response was interesting. He said that he often hears people say they would be willing to pay more taxes to fund X program. The problem is that the support is not broad based. Everyone has certain things they would like to fund, but it's really an issue of balance, and balancing the needs of different groups. These budgeting issues are really about shifting the impact from one group to another. As for convincing the public to support higher taxes, Rep Bigelow didn't seem too optimistic. He said the public generally drives itself and that even the media with all its influence can't really drive it. At this point Governor Bangerter interjected and said that the polls may say there's support for higher taxes, but that he doesn't believe it was true.

Also of note is that after the forum was over, the lady who asked the question about government's moral responsibility to provide for people spoke with Gov Bangerter about that topic. Part of his response was that often those who talk about wanting the government to provide assistance don't provide that assistance themselves, despite being very well off. He said we currently have a president who made a million dollars last year and gave about 1% of it to charity.

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