A Quick Wrapup

by Senator Mike Dmitrich, Minority Leader
and Senator Gene Davis, Minority Whip

Yesterday marked the end of a two-day special session called by Governor Huntsman to make budget adjustments to remedy a $354 million revenue shortfall.  The Utah Constitution requires a balanced budget, so it seemed prudent to make adjustments early before the situation got out of hand.   In Utah, we base the budget on projections.  Sometimes they’re off.  Chalk it up to unforeseen economic events.  We worked with the Senate Republicans to accomplish the task of balancing the budget.

All agencies reduced their budgets by 4% with the following exceptions:

Human Services 3%
Health 3%
Corrections 3%
Public Education Held Harmless

For now:

Education is untouched (the governor’s prerequisite for calling the special session).
The $100M fund for education set aside during the 2008 general session remains intact.
The $434M Rainy Day Fund remains intact.
Bonding for transportation projects was unnecessary.

Like all Utahns, we are disappointed about the economic downturn and resultant budget modifications.  We are concerned that economic conditions may worsen before they improve, which would further adversely affect services provided by state government.

We question the wisdom of cutting Medicaid because every $1 reduction in state funds results in a $3 loss of federal funds.  The loss of federal dollars only adds to the downturn as those dollars are put right back into the economy as wages that boost the economy.

We are pleased that education was held harmless in the special session.  In the event that reductions in the education budget become necessary in the upcoming session, we strongly recommend reducing or eliminating the newest eduation programs, particularly those which are in the process of being implemented or which have not yet been implemented.

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