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The General Session Starts January 28, 2013

January 21, 2013

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As we are ramping up for session, I just wanted to give you a brief update on what to look for during the upcoming 45-day stint. Utah is one of the few states that has a part-time legislature. (Legislators are paid on a per-deim basis for the days we are in session and for the days we meet for interim.) I think that having a part-time legislature is one of the things that make Utah great. It means that as legislators, we really do go home to work and live under the laws we create.

There are only 5 full-time employees for the Senate during the year. When session begins we hire additional people as pages, interns, committee secretaries and security. I have no personal staff paid for with taxpayer funds. It makes for a heavy workload, but also helps keep government small and efficient.

Many important things are accomplished during a legislative session and I don’t expect this year to be any different. But of all the things that are achieved, creating and then adopting the budget is the most important task. Our state budget, just like your budget at home, gives us a roadmap so that we can see where we are going, set goals and see where we have been. Federal law requires the U.S. Senate to submit a budget by the first Monday of every February. They failed to do that for over 3 years–and look at the direction we are headed with no federal budget map.

Here is how the budgeting process works in Utah:

On the very first day of the session each legislator receives a copy of the base budgets for their committee. We immediately vote to approve those budgets, so we at least have skeletal budget in place at the end of the session if we cannot come to an agreement on a final budget. During the first 4 or 5 weeks of session the appropriations committees meet to hear testimony and make decisions about how to prioritize their part budget allotment. Then each of those committees submits their budget requests to the Executive Appropriations committee. That committee then puts all the smaller budgets together to create the full budget. Then the final budget is voted on and amended just like any other bill. Once it is passed it becomes the working budget for the next fiscal year.

Our final revenue numbers do not generally come in until mid-to-late February so until that time we only operate on our best guess of what the actual numbers will be. This year will be even more dificult than most to balance the numbers because we still do not know what is happening on the federal level in terms of funding. If they do not act until March, it may be too late for us to react and try to fill any of the holes they created. If this happens, we may need to pass our final budget in a special session later in the spring.

The funds we receive from the federal government can vary significantly from year to year. In 2009, the American Recovery and Reinvestment Act (ARRA) provided one-time federal money (meaning it was money that would be given ONCE) to the states. In Utah, we were very careful to allocate that ARRA money so that it did not fund or create new or one-time programs. Many other states did not choose to do this and it has caused problems for their current budgets. Another thing the Utah legislature has done in response to our worry about the volatility of federal funds is to require each department and the governor’s office to submit a plan of how they would cut their budgets in the event of a 5 percent or a 25 percent reduction of federal funds. This task was completed for FY2012. So in the event federal cuts, we already have a good starting point. If you would like to see the report it is here: http://bit.ly/W9tGX3

Budgeting is difficult. Sometimes even heart wrenching. Every dollar, and every program, has passionate supporters who articulate for its necessity. And there are just as many who can explain why higher taxes would burden struggling people at the lower end, and “job creators” at the higher end.

What you elected me to remember in the budgeting process is that budget money that we are allocating is tax money from your pocket and that tax money must be used prudently to provide the services needed by those in our state. In Utah, we follow our constitutional requirement to balance our services with the money we bring in from tax revenue. As a result of this and some other good choices we make, Utah has been consistently ranked as one of the best-managed states for many years.

Here are a few of the more recent budget related accolades.

Utah’s recovery from the last recession was ranked as #4 in the nation.

Here are the findings of the report:

#4. Utah Unemployment decline from recession peak: 3.1 percentage points

Peak unemployment: 8.3%

Current unemployment: 5.2% (tied-5th lowest)

GDP growth 2011: 2.0% (8th highest)

You can read more about it here: The States That Recovered Most (and Least) from the Recession – 24/7 Wall St. http://247wallst.com/2013/01/03/the-states-which-recovered-most-and-least-from-the-recession/#ixzz2HaZwR6Xe

For the third year in a row, Forbes named Utah as America’s “Best State for Business”. Since 2006, our economy’s annual expansion rate has averaged at 2.3%. The national average for the same years is .05%. Our energy costs, which are 27% below the national average and the fact that we are one of only seven states who still has an AAA bond rating–something that even the United States no longer has–are two of the factors that have given us that number one ranking. Here is the link to that article if you would like to read it. http://www.forbes.com/sites/kurtbadenhausen/2012/12/12/utah-tops-list-of-the-best-states-for-business/

Because of our management principles I am optimistic about our revenue. We are a well-managed state and have weathered the recent past better than many other states. However, we are still part of the national economy. The federal government currently borrows 46 cents of every dollar they spend. That is not sustainable. 40% of Utah’s spending is from federal money, so that means that just over one-third of what we use as spending money on our state programs comes from a source that is not financially sound and over which that we have no control. Because of this, we must be especially prudent. It seems that the wisest thing to do right now is adopt a “wait and see” approach until we see what happens at the federal level before approving new expenditures.

Another area of focus will be healthcare options. The health exchange system created by Utah several years ago was just given preliminary approval by the federal government. I am pleased that we have been granted that provisional waiver. It gives us some options we would not otherwise have had. However, the final decision has not been made as to which exchange system we will use.

Currently there are two camps of thought on this subject. One is that Utah can indeed do this on our own. We have done a good job with what we have done so far. Our health exchange (called Avenue H) is market based, which is important for our economy and if we take this option we will have the flexibility to make the program work for the individual needs of our state. The other line of thought is that the mandate for health care was a federal initiative and therefore the federal government should have to deal with the implementation and administration and any problems that come with that.

Utah is under a rather intense time frame to make the decision. If we do decide to use our own exchange it will actually take quite a bit of work and money to get it to exactly the point where the federal government will fully accept it.

As you can see there will be many things to consider. I will do my best to represent you in the decisions we need to make.

The bills to be discussed during the session are being written everyday. If you would like to keep track of any sort of legislation or any particular bill you can do it very easily on our website. Here is the link to the bill search page: http://le.utah.gov/asp/billsintro/index.asp

Every floor session of both houses is live streamed and every committee meeting is broadcast. The links will be on the main web page http://le.utah.gov/#iframe each day under the Audio/Video tab. (On that same tab you can even hear archived recordings from past sessions.)

You can follow the Senate on Facebook http://www.facebook.com/utahsenate?ref=hl or the Senate Republicans at http://www.facebook.com/utahsenategop?ref=hl.

You can follow me on Twitter @gopTODD. Also, the Senate Twitter handle is @utahsenate. @utahsenategop is the handle for the Senate majority.

Todd Weiler, 801-599-9823, tweiler@le.utah.gov

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