Bills seek to prepare Utah for 'financial earthquake'
Saying a disaster from federal deficit spending is surely coming, a group of legislators joined by the Utah Association of Certified Public Accountants unveiled a package of legislation Tuesday that they say could help Utah weather the storm.
"We are pulling the financial fire alarm," said Kent Thomas, president-elect of the Utah Association of CPAs.
He said the federal government is borrowing 40 cents of every dollar it spends, but such spending cannot continue indefinitely. That is worrisome because the federal government now provides 40 percent of Utah state revenues.
"What happens to the state of Utah" when cuts come, Thomas asked. "That is money that is used to fund Medicare, the National Guard, transportation, social programs. You name it, the federal government has its finger there."
"It's been like watching a wildfire coming up over a hill. So far things are pretty normal, but the burning branches are already starting to drop in our house," said Rep. Eric Hutchings, R-Kearns, noting several small cuts in federal funding have already come.
He said if lawmakers don't plan now for larger cuts, "We'll wake up one morning and see massive cuts. Instantly, we'll have to try to figure what to do with all those things, and it will be done recklessly, and it won't be as effective or efficient or sustainable as if we have those discussions right now."
A new group called Financial Ready Utah Â consisting of the CPAs, lawmakers, some chambers of commerce and concerned citizens unveiled seven pieces of legislation they say will help plan for the coming financial earthquake.
Sen. Aaron Osmond, R-West Jordan, said his SCR7 is the foundation of the package, and would formally recognize federal deficit spending as a clear threat to the nation and Utah. It would call on local, state and federal leaders to address deficit spending and put measures in place now to address problems.
Sen. Wayne Harper, R-Taylorsville, is sponsoring SB38 to require the governor's budget to identify all federal funds coming to Utah and figure out "what happens if those funds are reduced." He is also sponsoring SJR7 to create rules for the legislative process to take into account the potential loss of federal funds "to create a back-up plan."
Sen. Deidre Henderson, R-Spanish Fork, is sponsoring SB278 to create a commission to assess the risk of losing federal funds, and to make recommendations on how to handle reductions Â and how to reduce the dependency of the state on federal funds.
Harper said Utah has already tried to find ways to wean itself off federal funding. For example, he said it used all-local funding to rebuild Interstate 15 recently in Utah County and to build the new Mountain View Corridor in Salt Lake County. He said the state found it could move faster without strings that come with federal money, and saved money on the total cost.
Additional bills would allow the state and local governments to increase their rainy day funds to handle such problems Â and would require local governments also to plan for the loss of federal funds.
"These are not easy decisions. These are not fun decisions. They are going to affect us individually. They are going to affect our families, our businesses and us as individuals," Thomas said. But he added that lawmakers "need to know that they have our support even if our favorite program is affected."