Senator Hillyard’s comments
I enjoy reading different perspectives about state government spending. It is a very complicated issue and when you try to isolate one part, it does not always fit. While government spending increased a lot from 1992 to 2001, you may remember Gov. Leavitt pushed for a budget buffer program where we took on-going revenue and spent it on what have traditionally been one-time projects, namely on-going revenue for roads. This turned out to be a godsend (even though the wisdom of that action was challenged by the educational community with the catchy phrase that we were paving over children).
When the revenue dropped so dramatically after 2001 we were able to pull out that on-going revenue and move it into areas like public education and really soften the cuts they would have otherwise taken. Most states did not have that luxury and the consequent combination of program cuts and tax increases were serious. We were able to use one-time moneys or even some bonding to keep the funding up for the one-time road projects.
Some argued that we should have cut taxes or spent the money on true on-going programs but in hind sight, we did not really grow government with the excess money but used it as a sort of savings account.
I struggle trying to limit government spending with only growth in population and inflation. Let me illustrate. If we lose an engineer working at UDOT because we are not paying enough, his or her replacement may cost us at least the same or even more in today’s employment market. Then we have the loss of experience and cost to train a new employee. I think that growth in incomes should also be included because public employees are such an important part of the services government provides. The Utah Foundation Report, Spending your Tax Dollars: Two Decades of Utah Tax and Spending Trends, illustrates this.
When you put time frames on the figures, you have to assume that the level being spent at the beginning is the right amount. If it is low, then the growth may not be just more spending but a catch-up with where we should be but could not because of funding limits. Analyzing budgets based on categories is also problematic because not all categories have clear lines. For example, adult education – is that part of public education, higher education, corrections, or work force services, all of which have programs that cover adult education.
Having stated my concerns with what can be concluded with the information, I welcome the analysis. There are more meritorious requests than we could ever afford even with major tax increases. I feel very confident with where Utah is going when I see how hard each group fights for more public moneys but they all keep an eye on being in balance and protecting the state from losing its Triple A bond rating. They generally only ask to be treated fairly and I often hear positive reports after the session that is how they felt they were treated.
11 responses so far ↓
1 Steve Kroes // Jun 27, 2008 at 9:35 am
Senator Hillyard,
Thanks for writing this week’s commentary. Here’s a question to get the dialogue going:
The report showed that state spending for K-12 education has been on a significant declining trend when measured in proportion to Utah personal income, although there was a large increase in 2008.
Do you think that’s the way it should be, or does it matter that the education budget has not kept up with growth in the economy? Also, does the 2008 budget signal an increased desire by legislators to focus on education in the future? Or was it a temporary phenomenon?
2 Senator Lyle Hillyard // Jun 27, 2008 at 3:06 pm
Steve, Thank you for commenting!
I personally have never been impressed with comparison, either as a percent of the overall budget or as a percent of income, because there are so many other factors that impact the overall spending. Had we followed Gov. Matheson’s recommendations 20 years ago to begin working on the transportation logjam, we would have a lesser problem with that issue now. That would have meant that the funding for education that was given higher priority then would have been less. The state can only spend the money they take away from somebody either as tax increases or shifts within government spendings. I am more impressed with the amount in dollars we have increased spending for each school district and the growth in enrollments. That clearly shows the legislature has not cut the funding for public education for the 28 years I have served.
I just finished a conference where the consensus is that federal taxes will be increased with the newly-elected president. That reduces revenue for the state and further kills any discussions about a tax increase next session when hopefully our revenues will at least be level and not below last year’s revenues as is occurring in almost every other state.
I fully expect that the first priority of the Legislature in Jan. 09 will be to help or protect Public Education from budget cuts. If cuts to other programs are done and Public Education is given no more money, the statistics you use will show we have increased their share of state revenue. I am sure without any new money, Public Education will feel as though they have not improved.
3 Matthew Piccolo // Jun 30, 2008 at 2:40 pm
Senator Hillyard,
I must first compliment you, the other legislators, and the past few governors for running quite an efficient operation. Utah’s balanced budget, AAA bond rating, and relatively low spending are admirable. I am proud to be a Utahn in that regard.
I also think, however, that just because we’re doing well does not mean we can’t do even better. I agree with you that if salaries are increasing overall in Utah that we might need to pay government workers more to retain the best ones, as in your example of the UDOT engineer, but are there other examples of increased spending that is needed as general incomes rise?
If Utah personal income increases by, say, 10% over a three year period, does that then mean that state spending should increase by 10%? I highly doubt that such a significant increase would be required to boost state worker pay to keep up with the market.
In my opinion, just because Utahns become wealthier does not mean that the UT government should spend more of their income. Certainly, inflation and population increases require increased spending, but I’m not so sure about personal income. I think we constantly need to evaluate government programs to determine whether or not they are necessary. I like SB 45 and HB 75 (2008 bills on government competition) that will force us to make this assessment.
I agree with you that spending is all relative. Just because we are spending $11.5 B now doesn’t necessarily mean that’s enough or not enough. We should always make sure we spend taxpayer funds on only necessary endeavors and that we get the biggest bang for our buck. I personally think the State of Utah could spend even a little less and still serve Utahns as well as it is now.
Again, I sincerely congratulate you on a well-run government, especially compared with other states. Performing better than other states, though, isn’t too much to gloat about if all the others are on a negative trend. Can we not do even better than we are now?
Matthew
P.S.–Steve, thanks for opening up this forum, it’s a great idea!
4 Larry // Jun 30, 2008 at 4:40 pm
The preference by Utah policymakers not to spend budget surpluses on ongoing operations in order to avoid over-committing the state budget is a laudatory and exemplar practice and Sen Hillyard should get much of the credit for that policy. It works well. However, much of the surplus money has been dedicated to transportation funding on a state level. The aspect of transportation funding that has not benefited from the surplus is local roads. The legislature needs to help either with a change in B & C road funding or future surplus funds dedicated partly to local roads. There are more miles of B & C roads than state roads but less funding is available.
Sen. Hillyard, any ideas on helping local road funding?
5 Derek Monson // Jul 3, 2008 at 4:33 pm
Sen. Hillyard,
Along with the others who have posted on this message board, I applaud our elected officials, yourself included, for the ways in which they have wisely managed the public’s funds. One thing you wrote that sparked my concern, however, was when you said you “struggle trying to limit government spending with only growth in population and inflation.”
The example you gave of the UDOT engineer highlights a valid concern, but I don’t think that it presents a valid argument against spending limitations, such as those based on population growth and inflation. Rather, it highlights the necessity and usefullness of such limitations for the citizens of Utah.
I’ll use your example to illustrate what I mean. In the case of the good UDOT engineer, there are more options available than to simply let the engineer go. If the engineer is truly worth the added cost of keeping him on the public payroll through a significant raise, then UDOT managers can reallocate their resources to make sure he doesn’t leave for the private sector.
Of course, the reallocation will require spending cutbacks in areas that aren’t worth as much as having that good engineer, but that’s the entire point of spending limitations. They force managers of the public’s funds to constantly be asking: “what is truly worth spending the public’s funds on?” There may arrive a time when the cost of worthy public expenditures exceeds the spending limitation, but any good spending limitation will also allow public expenditures to increase if the public thinks they’re worth it.
In the end, the need for public spending limitations is based upon the fact that the government officials, elected or otherwise, are spending money that is not simply their own. Since they are using resources that have been generated by the efforts of hard-working Utah families, there should be higher expectations and reasonable limitations on how those resources are expended.
What’s more, those expectations and limitations must be explicitly stated in statute and the constitution. Otherwise, Utahns will always be subject to present or future Utah leaders out there who may not be so conscientous in how they use the public’s resources. Thank you for taking the time to post your comments Senator and to read my own. I appreciate the opportunity for such dialogue.
6 Matthew Piccolo // Jul 7, 2008 at 3:28 pm
I guess Sen. Hillyard didn’t have time to respond. I hope that at least he was able to read our comments and suggestions.
7 Senator Lyle Hillyard // Jul 7, 2008 at 4:57 pm
I think spending limits are very helpful to keep us focused on how fast government spending is increasing. My concern is that we must not let the total figures be absolute. First spending limits assume that the beginning point was an acceptable amount. If it was too low, using it as the base is not fair. If it was too high, using it as a base is meaningless.
Second, should other areas of economic growth be included? For example, say an engineer at UDOT making $50,000 per year quits to take a better job making $100,000 per year in the private sector and we must pay $60,000 per year for an engineer right out of college. With only inflation and increase in population as the only basis for increasing the spending cap, such a hire would violate the spending cap.
8 Crazy Cooter // Jul 7, 2008 at 11:15 pm
Sen. Hillyard’s issue about the “starting point” for a spending limit is a critique I’d also make of the Utah Foundation report showing spending trends.
The report starts in the early 1990s, towards the end of a peak of public education enrollment increases. During the 1990s, enrollment growth slowed and eventually even declined. Not surprisingly because enrollment growth was slowing or declining, public education spending grew slower than the rest of the state budget during the period covered by the report. As public education enrollment has been picking up in recent years, so has public education spending as a percentage of the state budget.
Even if not intended this way, the starting point is implicitly taken as a base for a “normal” year, because everything is then compared to that year. But if the base year isn’t really “normal” (whatever that is) it can give a very biased impression of what has happened and why it has happened.
The media does this all the time when talking about the economy (Utah’s unemployment rate has increased by 10%, while neglecting to mention that we’re still at a ridiculously low unemployment rate by any historical standard…or foreclosures increased by 50% over last year, even though last year may have been the lowest foreclosure rate ever in the state).
To me the Utah Foundation report would have been much more useful if it had gone back to the early 1970s or so, so that I could see the trend through several different cycles affecting state spending - public education enrollment booms followed by higher education enrollment booms, welfare programs increasing and decreasing through the economic cycle, and so forth.
9 Steve Kroes // Jul 8, 2008 at 10:42 am
Cooter, maybe you’re not so crazy after all!
I think you’re right that a longer-term look would be useful. One of the challenges of doing so is that departments have been restructured through the years, and it was a bit of work to figure out how today’s departments line up with those of the 1990s. It’s important to align the old numbers so they fit into today’s categories or else it would like like big increases in some areas and big decreases in others caused by simply moving programs from department to another. So, going back to 1970 would be even more difficult. But it would be useful.
In an earlier report (click the link and see Figure 3), we did provide some longer historical perspective on solely education funding, and it was interesting to see how high it was in 1970 — that was probably influenced heavily by baby-boom kids.
10 Steve Kroes // Jul 8, 2008 at 10:52 am
Also, I want to add that Senator Hillyard responded in an email saying the following about spending limits:
“I personally like a spending cap and believe that it should be the measure before we begin to prepare every budget. As we gain more experience with the cap, we may need to make adjustments in how it works but not as an excuse just because the cap leaves money unspent.”
11 Bettie W. Larkin // Feb 22, 2009 at 1:49 pm
Sen. Hillyard…Recently I had the opportunity to travel with fellow Senior Companions (under auspices of BRAG Foundation in Logan) to observe the Senate and House voting on issues before that body. We had hoped to meet, personally, with you to ask for your vote on funding and plea our case for the necessity of it and the Meals On Wheels Program .You were not available and we’re sorry to have missed you and I wish to express our appreciation for all you do. Our purpose in the Senior Companion program is to keep these folks who have served our country in WWII and Viet Nam, functional, even as their health fails them, in their homes. Their families are “stretched”, in these perilous economic times, to keeping their jobs, and being available and supportive to their children in their various school programs in pursuit of their academic and athletic/social endeavors. The aged in their families need no longer to be put in more and more costly nursing homes or assisted living facilities while they strive for some stability and dignity. We, as Senior Companions thank you for support of past programs and solicit your present help in keeping funding and votes for this program and the Meals On Wheels program for these deserving elderly and handicapped who have paid their dues…who have given so much to this country.There are many who feel the church is taking care their own, but evidence to the contrary show that these independent seniors are not and need not institutionalized care. We are volunteers who want to help and need YOUR help, Senator, in giving the elderly in our community minimal help from concerned caregivers.
Thank you, Senator Hillyard, for your past help and attention to our plea.
Sincerely, Bettie W. Larkin; Senior Companion; BRAG PROGRAM, Logan, Utah
Thanks for your attention, Senator.
Sincerely,
Bettie W. Larkin, Sr. Companion; BRAG, Logan, Utah.
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