The Budget

Robert Gehrke wrote a good article on the current status of budget talks. Senator Bramble sums up the situation: "'I think as we go into this session, it sounds like the House, Senate and governor are much closer than we've been at the same point in previous years,' said Senate Majority Leader Curt Bramble. While Senate Republicans did not settle on the size of a tax cut, he said a reduction in the $100 million range is 'reasonable and possible.'"

The Governor's initial task in the budgeting process is to provide recommendations to the Legislature. Governor Huntsman did a great job.

For starters, he didn't use fake money. We have a spending cap. Some things count toward that cap, some don't, and some are grey. The Gov didn't fudge those numbers. Thus, the two branches agree on the amount of available revenue that exists.

Also, there are some (unglamorous) things that absolutely have to be funded (like enrollment growth in Medicaid). By not accounting for those things in a recommendation, a Gov leaves lots of fake money on the table to fund wish lists (leaving the Legislature to play Scrooge, by appropriating the money where it actually has to go).

And, most importantly, his recommendations are good. The biggest expenditure is public education. The 7% increase the Gov recommended is appropriate. We differ a bit on how that should be appropriated, but it is a point we will work out.

Many in the Legislature want a good chunk of the education money to go directly to teacher bonuses, rather than to the districts in a lump sum. In negotiating salaries with the districts, the education unions demand that most of the money go to teachers nearing retirement (since retirement is based on a percentage of their highest paid years); this hurts teachers at the start of their careers. By paying the money as an across-the-board bonus, it works to lift salaries of the younger teachers we need to retain more than if we were to send the money directly to the districts.

As for a tax cut, stay tuned. As I have stated many times before, I believe that cuts to the personal income tax stimulate the economy. Businesses are very mobile, and they look at the income tax rate as a key indicator. Thus, I will work to further reduce the income tax rate.