Thursday, December 18, 2014
At the end of last year's session, I was contacted by a local veterinarian who was concerned about Utah's laws governing the business. His problem was that his business had grown and he needed to bring on a partner in the business to continue growing. The partner they selected was not a licensed veterinarian but had skills that helped their business tremendously. As they met with their attorney to discuss the way forward, it came to their attention that state law forbid organizing their business in such a way.
Even more disturbing, however, was to discover that not only did law forbid this from occurring, but that the State had essentially turned a blind eye to enforcing any of these statutes. When I called the Division of Professional Licensing (DOPL) to discuss this issue, they were caught a bit flat footed. What we discovered was that there was significant veterinary industry reform in 2009 that was supposed to address this issue. That was the legislative intent, at least. But, the devil is always in the details. The specific language was somehow overlooked, and while the legislature desired a less rigid form of business model regulation in the veterinary industry, it didn't get written into the law. Since that time, DOPL has been honoring the legislative intent of those reforms by essentially ignoring the existing code.
This discrepancy poses a problem for law abiding folks who want to follow the rules. Without understanding the politics behind the law, any attorney would advise his or her client to follow the statute. That is exactly what happened to this local veterinarian. Fortunately, they were able to identify the problem and we have drafted a bill to correct it. Here is the language of our proposal:
It is my hope that this will open up a lot of opportunity for aspiring veterinarians. It should provide a means for capital to flow into the industry and help grow existing businesses where there is the desire to do so.
The Majority Caucus of the House of Representatives met recently to discuss the heavy issues that are facing our state this coming year. Here is a review of the topics we discussed.
While the media is reporting a budget surplus this year of over $600 Million dollars. After considering obligations already committed to for this next fiscal year, the Legislature will have less than that to appropriate to on-going and one-time programs.
The Governor's recent budget proposal presumes that the Legislature will change existing law to allow some of his budgetary suggestions to come to fruition. So far, we are unsure to what extent that will occur. The Governor has the bully pulpit, but the Legislature has the vote.
House Leadership has tasked us with working to reduce the size of our State Budget by 2% this year. That means each appropriation committee will be looking for places to save money and cut waste. This exercise should give department administrators the opportunity to eliminate programs they see as inefficient or non-essential. If we were to guarantee them the same funding as previous years, there would be no incentive for administrators to select areas where they could reduce their staff or work load.
Finally, unlike last year which was filled to the brim with budget meetings, the first week will be sprinkled with standing committee hearings as well.
Ultimately, there will be major shifts in how the budget construed this year and you can count on a vigorous and lively debate on how taxpayer money is spent in 2015.
The Healthy Utah Plan
The Governor has completed his negotiations with the Feds on his vision for Medicaid Expansion. The plan will cost Utah about $78M annually to pay for covering people who earn less than 138% of what the is currently defined as the poverty level. That price represents 10% of the cost of the whole program and it assumes the federal government will honor its promise to pay the remaining $702M in expenses. Of course, the definition of poverty could always change or the Feds could break their promise to pay, or both. The House is uncertain of the ability of the Federal government to keep its promise. There is also uncertainty as to the future of Obamacare with a new Congress coming and the potential of a political change in the White House in 2016. So, rather than promise benefits today and then revoke them tomorrow when they are no longer financially sustainable, the House is looking at other more sustainable options. Expect a lively debate on this subject.
The Governor's proposal to shift money out of transportation and into education puts the Legislature in a sticky position. Transportation is a lubricant of the economy. Yet, the costs of road construction and maintenance are outpacing inflation. Many of Utah's rural roads are being left without maintenance due to budget constraints. In addition, the Governor's budget proposal appears to put even more roads at risk of deferred maintenance and delay projects that accommodate population growth. That is, unless the Legislature wants to burden the people with a tax increase.
Kids need to be bused to school and buses need roads. Perhaps a future work around is to outfit our school buses with all terrain wheels and suspensions. Joking aside, the Legislature will be working on the issue of how to adequately and fairly address our transportation needs. This includes inter-modal transit options as well.
To fund roads, some have advocated for an increase in the gas tax. Frankly, I am attracted to the idea of toll roads as a means to pay for usage. It is the fairest and most direct way to tie the cost and benefit of road use to the user. However, given that toll roads are terribly unpopular, I believe we could scrap the gas tax entirely and switch to a usage tax based on miles driven each year. The mileage could be accounted for during annual vehicle registration. Obviously, there are a few scenarios in which this kind of tax wouldn't work, but I believe the concept could be adapted to be fair and proportionate.
Regardless, expect heavy deliberations on how to meet our transportation needs.
During the general session, we debate bills on the floor and vote them up or down. However, prior to coming to our floor for a vote, the bill has typically been heard in a committee hearing that is open to the public for comment. The committee hearing is a very valuable part of our process. Typically, after a bill passes on the House floor, it is sent to the Senate where it receives a committee hearing on their side and then it is debated and voted upon on the Senate floor.
One of the interesting things that happens at the end of the general session is a compression in time. Due to this, the House and Senate mutually "suspend the rules" so that bills can be debated on the floor without a committee hearing. For obvious reasons, this has sometimes created bad results. (Note: 58% of the 500+ bills passed last year were done so on the last three days of the session when rules were suspended. Over 30% never received a House committee hearing.) After witnessing this process worsen over the past several years, House leadership proposed in our meeting that we change the gameplan.
For 2015, the House will not suspend the rules except on the last day of the general session. Even during this rule suspension, bills will be given priority that have had a House standing committee hearing. This will mean that members of the body will have already had a chance to read the bill, hear the issue, and comprehend the legislation that is being proposed before it comes to the floor. It is anticipated that while this may decrease the number of bills that are passed, it will increase the quality of legislation coming from our body.
At the end of our discussion on this topic, I made the motion that our majority caucus accept leadership's plan. The motion moved forward unanimously.
There will be a lot of attention on education issues this year. Again, with the Governor throwing down the gauntlet with his budget proposals, the Legislature will trying to find a sustainable way forward.
One of the more interesting proposals made to us by a representative from Logan is an income tax increase of 2%. Since every dime of our income taxes pay for education, this is seen by the sponsor as a way to help boost funding. The sponsor cited the institution of the flat tax in 2008 as unfortunate because the state suffered from declining revenues during the recession. Ironically, had taxes been kept higher during that period, the taxpayers would have had even less money in their pocket during that painful economic downturn.
I can't see increasing taxes now during the good times, when the bad times are again certainly on the horizon. We must work to make due with what we have.
Saturday, December 13, 2014
Over the past couple of years, I have proposed some significant reforms in how Utah's courts are structured. However, due to the complexity of the problem and a lack of political will from the Senate, these all-encompassing changes failed to gain traction.
So, this last Spring, I was invited by the Administrator of the Courts to participate in a work group studying how Commissioners operate in our District Courts. One of the problems we recognized in my earlier broad proposal was that Commissioners are given the power of judges, but they are not subject to the same public scrutiny and vetting that judges receive.
Fortunately, our work group this past interim recognized that and has made proposed changes to how Commissioners are nominated and retained. Among other recommendations, we endorsed a public comment period that will be open for Commissioners who are tapped to be hired or upon renewal of a term. These comments will be delivered to the presiding judge who will sift through them as the nomination/retention process moves forward.
This is a significant policy change. Hopefully, our work group's efforts will make a difference in how the public relates to its courts and help foster faith and confidence in how justice is administered in our state.
Here is a copy of our report and recommendations for your review. These were presented to the Judicial Council on November 24th and fully approved for implementation.
Thursday, December 4, 2014
Utah's Public Lands Policy Coordinating Office released its much anticipated feasibility study regarding Utah's capacity as a State to manage lands currently controlled by the Federal Government.
The bottom line? Utah has what it takes to do the job and do it right. Here are all 784 pages of the in-depth details for your review.
The Legislature will be working diligently this coming General Session to move the ball forward so Utah can gain its rightful stewardship over our public lands.
Thursday, November 27, 2014
Our economy is like a balloon. A balloon grows as air fills its interior. Our economy grows as the number of business transactions increase within our borders. Like a balloon, sometimes our economy seems to grow lopsided or in an irregular shape. Sometimes even, the economy shrinks, and like a deflated balloon, it presents unsightly wrinkled patches. These irregular shapes and wrinkled patches of the economy routinely become the object of attention of the media, the public, and policymakers.
I recently completed reading From New Deal Banking Reform to World Ward II Inflation by Milton Friedman and Anna Jacobson Schwartz. Before your eyes glaze over in disinterest, let me say that it provided very relevant historical examples of economic manipulation that resonate with what we are experiencing today. It also provided compelling examples of how actions taken by the Government and Federal Reserve laid the foundation for future problems. One of the most poignant examples cited was efforts to manipulate gold and silver markets.
As the Great Depression reached a trough in 1933, the Government and Federal Reserve were scrambling to find policy that could help lift the economy. Commodity prices (i.e. wheat, corn, etc.) were very low. The low prices were putting farms out of business and creating a crises in agriculture. In an effort to stop this phenomena, President Roosevelt declared a bank holiday on March 6, 1933. On March 9, Congress passed The Emergency Banking Act which gave the President power over all banking transactions and over foreign currency exchanges and gold and currency movements.
One of FDR's first actions was to institute a freeze on all gold transactions between banks. All banks, persons, and institutions were ordered to surrender all gold bullion in their possession to the Federal Reserve. The U.S. dollar at that time was based on a gold standard. Shortly thereafter, the dollar was depreciated as its gold "content" was cut nearly in half. Also, the U.S. set out on a policy of purchasing gold domestically and abroad to increase the metal's domestic supply and thus allow the supply of dollars to increase and thus allow commodity prices to inflate. Again, the whole point of this program was to indirectly increase the price of commodities and help out ailing farmers. In this, the programs succeeded.
|Chinese line up to receive a stipend of gold during hyperinflation.|
However, despite the success of the gold purchase program, it had the inadvertent affect of kicking other countries off the gold standard. Even more so, it's sister program of purchasing silver left significant wreckage in its wake. On May 22, 1934, the Secretary of the Treasury was ordered to purchase silver domestically and abroad just as had been done with gold. One of the major unintended consequences of reducing the supply of silver in rest of the world was that it exported deflation to countries whose currencies were on the silver standard. China was one of these countries. The reduction in silver available to back its currency (since it was all being sold and smuggled to America which was willing to pay a premium for the metal) caused prices to decline in a disorderly way. The Chinese government was forced to leave the silver standard and adopt a fiat paper currency. But, when it did so, it began to print money to pay its bills and experienced a disastrous episode of hyperinflation. The Chinese economy was wrecked from the chaos and Japan's invasion punctuated the misery of the people. The economic woes followed by the hardships of war planted the seeds of discontent which led to the Communist Revolution. America's silver purchasing program seemed innocuous enough here at home, but abroad it created more problems than it solved.
|Federal Reserve Balance Sheet showing a spike upward in efforts to respond to The Great Recession.|
We have seen similar episodes of unintended economic consequences in the recent past. Following the Great Recession, our Federal Reserve has embarked on an ambitious program of market manipulation. At first it purchased mortgage backed securities in an effort to bolster the mortgage credit markets. Later, it began purchasing U.S. Treasury bonds en mass to help "quantitatively ease" market conditions. This quantitative easing (QE) has basically been a money printing operation that has propped up markets through selective inflation.
As we saw during the Great Depression, the interventionist policies of the Great Recession have spawned problems abroad. As QE pushed up our stock market, it also pushed up the price of food in other countries. In places like Egypt, where the average person lives on less than $2 a day, this increase in food prices proved to be unbearable. Hunger turned to anger and the ugly, yet U.S. friendly, dictatorship of Hosni Mubarak was overturned in 2011 and replaced with a very U.S. unfriendly and fascist regime known as the Muslim Brotherhood. Libya, Syria, and Tunisia all experienced similar political revolutions stoked at the onset by the high price of food.
|Tahrir Square Protests - Cairo, Egypt - 2011|
While we may believe we can outsmart the natural laws of economics, our actions do not occur in a vacuum. Squeezing a balloon on one end will only cause the other to bulge. We need to be mindful of the fallout that comes from tinkering too much with the economy. Natural laws of economics follow natural rhythms. As a nation, we would do best to implement policy that adheres as closely to these natural laws as possible. While short term gain may seem the order of the day, it nearly always comes at an expense. May we have the courage to make economic policy with the long view in mind.
Thursday, November 20, 2014
I have had a couple constituents ask me recently why the State is considering moving the Draper prison from its current location. There is a perception that keeping the facility where it is now is a better bargain for the taxpayer than moving it to another location.
For insight on the information guiding the process, here is a presentation we received last year regarding the cost-benefits of relocation:
As you can see, the costs of relocation are offset by the sale of the underlying property. Also, the prison will need to be rebuilt since it is old and atrophying. Given all the considerations, it appears that relocating is in the best interest of our economy and our corrections system.
Nevertheless, for those of you not satisfied with the above presentation. Here is lengthy report we received with all the wonkish details. You can relish in the minutia here:
If you have any questions about the process or policy of this decision (that aren't answered in these presentations), don't hesitate to CONTACT ME.
Monday, November 3, 2014
If you are reading this, you are either wanting to know more about the candidates in the race for House District 9 or you are a regular recipient of my political newsletter. If you are not receiving the newsletter, but want to, email me and I will make sure you are included.
So, in case you are wondering why I am worth re-electing, here are the top reasons for your consideration:
That's right, you are reading this and these are my thoughts.. Politics is volatile and often times politicians find themselves contradicting their own positions or speaking in a duplicitous manner. I have found that writing my thoughts in a public forum does two things. First, it lets you know where I stand and why. Secondly, it acts as a permanent reference that can be used to understand history on an issue, the changes in circumstances surrounding issues, and it can be accessed at any time by anyone. This shared record of my thoughts and views keeps me grounded.
I make it a point to strongly represent our district's interests at the State Capitol. Prior to my election, our district's voice was literally ignored in the halls of government. However, through relationship building, strong advocacy, and a consistent voice, District 9 is now respected again and recognized as having a seat at the table.
Our district is unique in that it has rural, suburban, and urban areas. Legislation that impacts one area may affect another in a different way. It is a Legislator's job to reconcile the needs of his or her constituents. The best way to do that is through open communication and dialogue with citizens in the community. I have continuously made myself available to you to discuss concerns and I have been very effective in turning the wheels of our state government to address your needs.
People often wonder what compels men and women to enter politics. There are many reasons. Some are good; others are less desirable, perhaps. For me, it is a passion for serving the community and helping to improve the lives and circumstances of our people. Our family has done some bold and risky things in an effort to help our neighborhood. Fortunately, the efforts have made a difference. Our life experience has been an excellent training ground for me in serving at the State Capitol and I have learned many valuable lessons that have helped me to better address the needs of our diverse district.
Here are a few points from my record that I am proud of:
- Endorsed by Independent Business Owners and the NFIB
- Rated 100% in 2014 by the Salt Lake Tribune on responsiveness to Clean Air Legislation
- Passed Legislation Reducing Unemployment Taxes by $24 Million
- Introduced the Latinos In Action mentorship program to Ogden School District which boasts a 90%+ college placement for hispanic youth
- Appointed by Governor Herbert to the Multi-Cultural Commission in 2011
- Proposed Legislation to Reform Utah’s Court Systems to increase accountability
- Passed Legislation that reduced repeat crime by fixing poor record keeping of incarcerated offenders
- Passed Law bringing common sense to building codes related to owners of older homes
- Sponsored and passed legislation protecting Weber County’s Railroad Museums
Of course, there is much more and you can find that here on the blog.
If you have any concerns or issues, I am here to assist you. I look forward to your support as you go to the ballot box. Thank you for your past support. I hope to continue to serve the people of District 9.