All-Day Caucus: Big Changes Coming

We had an opportunity to meet as a Republican Caucus and discuss many of the issues we will be facing in the 2013 Legislative Session.

One of the important things we discussed was the Guiding Principles of our Legislative efforts this year.  Here they are:


2013 - Utah Republican Caucus Guiding Principles

Of our time, we spent about 2 hours discussing Obamacare.  I will be treating that subject in a whole separate post a little later.  You won't like what you read...but you need to know anyway.  Stay tuned for more on that subject.

BUDGET ISSUES

We also discussed our budget to a great degree.  With the "Fiscal Cliff" debate ongoing, it is making it very difficult for us to plan.  If everything stays like it is today (which it won't) then we have about $300 Million is new revenue to spend.  That is what we are building our budgets around.  However, if we "go ever the Fiscal Cliff" then our new revenue turns into a $200 Million deficit and we will have to cut programs.  It's a lovely scenario to say the least.  In my business, I always try to underpromise and overdeliver.  Consider this your warning that things could get ugly from a budget standpoint this session.  If not, then there shouldn't be too many complaints.

The governor's proposed budget is interesting in that it allotted for a 1% increase in the Weighted Pupil Unit and a 1% increase for salaries for state works but not a 1% salary increase for teachers.  I don't know if that was a technical oversight or posturing for negotiation.  Either way, that little detail is sure to get some attention from the education community.  Based on our discussion, the Legislature seems prepared to fund a 1% increase in teacher salary.

ALCOHOL

Alcohol policy will be changing this year as well.  I spoke to Senator Valentine over the summer and he indicated he is working on a Master License concept that would allow businesses that need multiple licenses to operate to consolidate to just one.  This would then free up the excess licenses for use by other businesses.  This should hopefully ease some of the burden in the business community who is impacted by the scarcity of supply of such licenses.  Also, we were told that there will be a proposed change to the "Zion Curtain" provision that places an awkward partition between bartenders and patrons at restaurant bars.

TAXES

The proposed food tax increase was brought up momentarily.  It was panned by the body. Don't expect a lot of excitement from the House of Representatives on this subject.

HELMET BILL

The last item of business was regarding the proposed Mandatory Helmet Bill for motorcyclists.  This bill was viewed very skeptically by my constituents.  It also didn't help that the rhetoric surrounding the bill was very divisive and highly agitated the opposition to it.  I spoke against the bill on the grounds that the people should be trusted to make decisions for themselves,  that micromanaging behavior based on trying to protect the public coffers was a slippery slope to greater government intrusion in our lives, and that this bill was an assault on a symbol of freedom and independence.  I asked for a Caucus position against the bill and one was received by unanimous vote.  What this means is that if the bill passes the Senate where it has originated, it will not make it far in the House and will most certainly fail a Floor vote.  

December Caucus 2011

We met as a Republican Caucus today to review some up and coming issues regarding state business.  Here are some highlights:

The Budget

The Governor made his budget proposal recently.  Interestingly, his budget contains about $30 Million more than our consensus budget figures show.  This is an interesting discrepancy.  It appears that the Governor believes that there are accounts somewhere that can be tapped to cover this difference.  If so, the House and Senate are not privy to the whereabouts of these funds and will be allocating funds accordingly.

The State is now at 90% of our constitutional borrowing limit due to a 7% decline in property tax assessments statewide this year.  The state is also running at a $52 Million ongoing budget deficit that needs to be corrected.  Also, student population growth increased 12,000 that needs to be funded.  Even though it is widely reported in the press that we have a $120 Million surplus this year, this "surplus" will likely be consumed entirely in funding student growth, correcting our ongoing budget deficit, and paying down our debt.

Interestingly, a comparison was also given to us today showing how much we have eroded away at our Rainy Day Funds.  In 2007 our Rainy Day Funds and reserves totaled $1.56 Billion.  Today we have just $348 Million.  Rainy Day Fund renewal should be a budget priority as well if possible.

Health Care

We heard a presentation on the Affordable Care Act (i.e. Obamacare).  I didn't like what I heard.  You won't either.  Here is what you have to look forward to:

• Those aged 25-34 will have their premiums increase 40% by January 2014.
• Those who choose not to purchase a policy will be fined 1% of their yearly income.
• If an employee chooses a wrong policy, their employer will be fined.
• Transgender assignment surgery will be covered in all policies.
• As your premiums increase, the Feds will subsidize your premiums (with money they taxed from you.)
• ...and more unsettling regulations.

We also discussed that Utah has 600 individuals on high risk state funded insurance called HIP.  This small group of people have consumed $40 Million in just two years ($33,360 per individual per year).  The Federal government granted Utah the $40 Million to help this group a couple years ago with the idea that the funds would last through 2014.  Today, the money is gone and rather than discontinue the program, the Federal Government has cut Utah a check for another $40 Million in order to prevent embarrassment and discrediting of the program.   

Public Education

The Legislature discussed the concepts of merit pay for school teachers and some of the dynamics at play.  Although no details were discussed, it appears that the body is leaning toward this type of compensation plan for teachers.  Of course, the devil is in the details.  Keep your eyes peeled on this issue in the weeks to come...

Note:  Federal funds equal just $280 Million of our $3.4 Billion public school budget.  Is it worth the strings that are attached?  Let's figure out a way to jettison Federal dollars and exercise freedom to teach under our own recognizance.  

Land Issues

In a big push back at Federal overreach, Ken Ivory is proposing a bill that will force the Federal Government to sell public lands to private owners.  The National Parks would be deeded to the U.S Government but the remaining land would be sold off with 5% of the proceeds going to school funds.  The remainder would be revenue for the U. S. Government (and hopefully would pay down the debt.)

It's a bold idea.  I support it.

Look for more updates to come....

Op Ed: Stardard Wrong On Repeal Amendement

My guest commentary was published in the Standard Examiner this morning (I am still waiting for a good link from their online live version).  Here is the text:

I would like to thank the Standard Examiner for airing its opinion on the Repeal Amendment and State’s Rights.  Although I completely disagree with the position held by the editorial board, the discussion affords us an opportunity as a community to explore this burgeoning issue.

One of the questions we need to ask ourselves as Utahans and Americans is this: At what point does the Federal Government overstep its bounds?  A good follow up question might be: Do we as a people even recognize what those bounds are?

Fortunately, to answer both of these questions, we need to look no further to our high school text books or, hopefully, our own bookshelves for a copy of the Constitution. If we understand our Constitution, we can begin to understand the power structure that was put in place to best assure the protection of our liberties and our happiness as a people.

We are all familiar with the checks and balances provided by the three separate branches of government that make up our Federal system.  Each branch is supposed to keep the power and influence of the other two branches from growing any more powerful than its own.  But this just addresses the balance of power within government.  What force is there to check the unlimited growth of power and influence by the Federal Government as a whole? Thomas Jefferson believed that the states of our Union could provide just that balance:

“It is important to strengthen the State governments…it must be done by the States themselves, erecting such barriers at the constitutional line as cannot be surmounted either by themselves or by the General Government.” Thomas Jefferson to Archibald Stewart, 1791.

Yet, the Standard Examiner editorial board feels that the voters can simply vote out Federal Legislators and that will somehow resolve the issue of our bloated government:

“If voters don't like what a current U.S. Congress is doing, they have the right to vote federal pols out of office.” - S.E. Editorial Board

The problem lies in the fact that the new guy takes the reins of a government that is every bit as large as it was when his predecessor left.  Voting out legislators does not reduce government programs, eliminate executive orders, or overturn judicial interpretation that all aim towards an enlargement of Federal power.

Even Alexander Hamilton, the supreme advocate of centralized federal government in his day said:

“This balance between the National and State governments ought to be dwelt on with peculiar attention, as it is of the utmost importance. It forms a double security to the people. If one encroaches on their rights they will find a powerful protection in the other. Indeed, they will both be prevented from over passing their constitutional limits by a certain rivalship, which will ever subsist between them.” (Alexander Hamilton, speech to the New York Ratifying Convention,

1788)

Indeed, we may be asking the impossible.  The “rivalship” between the Federal and State level is mediated by the Supreme Court.  Is justice even possible when the defendant in the case, the Federal Government, is also a party to the mediator?  I think not.  And so, over the past two centuries our government has been drifting ever so slowly, but surely, in the direction of ever more consolidated centralized Federal power.  We should not rely on our Federal government to exercise self-restraint in this regard.  Our Founders did not envision The New Deal, The Great Society, or No Child Left Behind when they signed our framing document.  These have been possible only through subtle interpretation of the constitution and the collective acquiescence of the American people. 

That acquiescence is coming to an end.  Rob Bishop’s Repeal Amendment embodies the return of public sentiment to our Founding Principles.  It will give the States the necessary tools to effectively counter-balance an overzealous and cumbersome Federal government.  For this reason I support this cause and I hope that you, the reader, will do so as well.

Day at the Capitol: Up Coming Issues

I spent the day at the Capitol with my legislative colleagues and fleshed out some of the issues that will be addressed during the Legislative Session starting in January.  Here are some interesting points we discussed and some things you can look forward to:

$313 Millions Budget Deficit - The state budget still has a revenue shortage of $313 million that needs to be addressed.  Under current tax rates, we will need to cut another 7% from the budget.  Look for more difficult belt tightening.

Immigration - We were presented with the 8th revision of a much anticipated immigration bill.  Apparently, the bill has been made bullet proof to constitutional challenges. 

No New Taxes - We voted as a Republican Caucus today to not raise taxes this year to meet the budget deficit.  This is good news for everyone.  Instead, look for more paired down state programs this year.

Federalism Issues - The issues surrounding Federalism seem to be gaining traction on the Hill.  One legislator is investigating the possibility of Federal Tax Escrow accounts while another is proposing reawakening the Constitutional Defense Council.

Deferred Building Maintenance - To trim the budget and live within our means, the legislature has taken money from funds used to maintain buildings.  We have deferred this maintenance for several years now and we were warned that this can only happen a couple more years. We will be forced to increase the maintenance budgets again or otherwise risk more extensive damage to state owned buildings.  

Rejection of Governor Herbert's Tax Acceleration - Governor Herbert's budget called for one time acceleration of tax revenue collection by mandating that businesses pay state taxes quarterly rather than yearly.  This accounting "gimmick" would add about $110 Million to this year's budget by pulling revenues from the future.  It's a one time fix and also would add an additional $10 Million in collection burden to the business community.  We saw that as an undue tax increase and committed to not support that measure. 

Resolution Convolution: The $101 Million Drama

Today the Utah Legislature was called into special session by Governor Herbert.  As a representative-elect, I was invited to attend and watch the Legislature address the issue dealing with $101 million dollars that are coming to Utah as part of the Federal Government's education jobs bailout which passed earlier this year.

As you can probably guess, it was a contentious issue and stirred some heated debate.

The resolution as it was proposed stated that Utah was accepting the funds but doing so holding its nose due to the perceived usurpation of State's rights and encroachment of Federal power on State prerogative.

Here are some important facts related to the funds and the resolution:

1.  The funds were officially requested by the Governors office and would be received by the State whether or not the Legislature approved the resolution.
2.  The Legislature has sole authority over appropriating State funds for use, including education funds, and not passing this resolution would allow the Federal government to bypass the Legislature by issuing funds to school districts directly.
3.  The resolution with its strong language of dissatisfaction added was seen as a compromise on the issue.
4.  The funds are desperately needed to plug a $50 million shortfall in our education budget.

So, the debate that ensued on the House Floor was quite intriguing.  On one side, you had a Republican  faction of representatives who absolutely opposed receiving the funds on grounds that it was fiscally irresponsible on a national level and just another example of government over spending.  On another side, you had Republican representatives that supported the strong language and yet wanted to approve the bill based on the States budget gap.  Finally, on a third side, the Democratic representatives tried to substitute a bill with friendlier wording than the one proposed on the basis that provoking the Federal Government with a verbal rebuke would hurt other sources of Federal funding that we are dependent on.

In the end, the original resolution was passes with just 14 Republican representatives voting "No" on the measure.

The Legislature today was put in a Catch-22 situation.  To have voted the resolution down on grounds of supporting State's Rights would have had the opposite desired effect as the Federal government circumvented the State's authority to distribute funds and encroached further into State business.  However, today's vote of approval may likely put some of the State's sovereignty at risk in the future as the Federal Government uses the acceptance of funds as a reason to mandate compliance to more Federal rules.  It has done just that with Medicaid funds the State received several years ago.

It seems that the Federal Government is becoming a master of making offers that States cannot refuse.