2015 Pre-Session Primer: Pin the Tail on the Taxpayer

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.

The Budget

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.

Transportation

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.  

Better Process

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.

Education

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.