Plans to slash state spending “into the bone” have Utah lawmakers scouring every corner of government to target programs and employee positions for cuts and outright elimination.
The proposals they are crafting will do away with any new money promised by the Legislature and then plunge deeper into agency budgets to reduce funds they’ve received in past years. Lawmakers say it’s a painful but vital exercise as they predict lean times ahead as the state’s economy reels from the coronavirus pandemic.
“This process is being undertaken carefully and thoughtfully to ensure critical programs remain funded, to avoid raising taxes, and to protect our most vulnerable populations,” House Speaker Brad Wilson, R-Kaysville, tweeted Friday. “Just as Utah families have tightened their belts in recent weeks, so must we as a state.”
The anticipated budget cuts will come at a time of burgeoning need, according to advocates who have implored officials to tap into reserve funds or explore alternatives to reducing support for state services.
Public school students will return to classes in the fall with a greater reliance on social and emotional support in school, education representatives say. The state’s elderly population is depending on continued in-home care so they’re not forced into long-term care facilities, where they’d be more susceptible to infection from COVID-19, advocates say.
And demands on the state’s mental health services will only grow, others warn, as job losses and coronavirus-related stresses deepen anxiety and depression across the state.
“I’m afraid that we’ll lose more lives based on our budget cuts today than we have with COVID and that we will [during] the entire process in the state of Utah with COVID,” state Rep. Paul Ray said at the state’s social services appropriations panel meeting Friday.
Each appropriations subcommittee was tasked with finding and recommending 2%, 5% and 10% cuts to the state’s $7.6 billion base budget. Lawmakers hope a 10% carve out — under which personnel would be slashed and services diminished — is a worst-case scenario, but they won’t know for sure until new revenue numbers come in in coming weeks.
Staff in the Office of the Legislative Fiscal Analyst expect revenue to be $200 million to $600 million lower for the current fiscal year than they estimated in February. For the coming budget year, starting July 1, they expect revenue to be $600 million to $1.3 billion lower.
The state’s executive appropriations committee will decide on final reductions. But even the smallest of cuts could come at a cost particularly to public education and social services, which make up the largest chunks of the state budget.
“Education and social services, both are very essential, both are areas that I think we all have soft spots for or are very fond of and know the significance of. But if you don’t touch those two budgets, there’s not a lot left,” Senate President Stuart Adams, R-Layton, told colleagues during a recent social services appropriations meeting.
The appropriations committee that deals with public education funding took on the task of identifying up to $380 million to pull out of the state’s budget for grade school students.
It's a difficult prospect for Utah educators to contemplate, said Sydnee Dickson, the state superintendent over public K-12 education.
“This is a very hard day,” Dickson told the panel of lawmakers in a recent meeting. “I would be dishonest to say I didn’t feel very emotional.”
Even the most optimistic 2% scenario would require $76 million in cuts to public education. To get there, legislative analysts proposed chops to several programs, including ones that assist local schools with administrative expenses and aid school districts and charter schools with the cost of serving special education students with intensive needs.
The next level of reductions proposed by legislative analysts would take $130 million out of a state program to promote smaller class sizes.
The most dire circumstances might compel lawmakers to chip away at the weighted pupil unit (WPU), the metric used to determine how much the state spends on each student. Utah ranks last in the nation for per-student funding, and education officials and state lawmakers said they wanted to protect this money as much as they can.
The drafted menu of cuts, approved by the subcommittee on Monday, would eliminate dozens of programs before touching the WPU.
Still, the suggested changes would have far-reaching consequences for the state’s students, said Mark Huntsman, who chairs the state’s board of education. Quoting Dickson, Huntsman said the 10% funding reductions would be “the financial equivalent of cutting into the bone.”
Heidi Matthews, president of the Utah Education Association (UEA), objected to the entire premise of the budget-cutting exercise — saying it’s inappropriate to plan for curtailed spending before lawmakers understand the extent of the economic damage from COVID-19.
She also urged legislators to tap into rainy day funds or seek out federal dollars to replace lost state tax revenue, so Utah can keep investing in teacher retention, reducing class sizes and providing mental health and social-emotional support.
“All of these needs will exist and be exacerbated by the pandemic in the fall, so any cuts would be devastating,” she warned.
Budget reductions could also jeopardize this year’s agreement between state lawmakers and the UEA, the state’s biggest teachers union, over future funding for education.
In exchange for a significant bump in per-student funding and other concessions, the association agreed to support a constitutional amendment that would give state leaders greater flexibility over spending income tax dollars currently earmarked for education. Matthews said if state leaders have to retract their promised investments, they should consider holding off on the constitutional amendment, slated to come before Utah voters on November’s ballot.
"If you only have one side of a compromise, you don't have much of a compromise," she said.
Utah’s higher education institutions are facing their own cuts, even as they deal with losses in revenue from canceled athletics games as well as camps, conferences and performing arts productions as a result of the coronavirus pandemic.
Overall, the Utah System of Higher Education (USHE) estimated in a presentation to state lawmakers that lost revenue sits at around $59.3 million for its degree-offering schools and $1.9 million for its tech institutions.
The system guesses that a 2% cut constituting around $24 million would affect about 200 faculty and staff overall but that many costs could be absorbed by reducing travel and implementing hiring freezes. A 5% cut, which would scrape $60 million away from their budgets, would lead to program reductions and impacts on about 450 faculty and staff.
The worst case scenario of 10% could mean a slash of $121 million. Under that kind of cut, programs and services would be reduced and as many as 1,100 faculty and staff could be affected, USHE said.
While lawmakers said they’d like to protect employees as much as possible, University of Utah President Ruth Watkins said in a presentation to lawmakers that “there’s no way these kind of cuts don’t impact personnel.”
“Such a large part of our budget is people, so there are implications there” even for smaller percentage cuts, she said.
Whatever the decrease, it will come at a critical time for retraining those in Utah’s workforce who are looking for new work after losing their jobs due to coronavirus-related business closures.
Salt Lake Community College President Deneece Huftalin said higher education institutions at large and particularly schools like hers will likely be in high demand post-pandemic and will play an essential role in reigniting the state’s economy in the coming months.
“We know from experience with the Great Recession that when that hit, community colleges absorbed about half the growth in college enrollment,” she told lawmakers. “So because we’re affordable, because we’re local and because we’re fairly nimble, a lot of students come back to community colleges when they’re faced with a very urgent need.”
Utah’s social services appropriations committee met twice last week to consider slashes to programs that provide resources to aging adults, people with disabilities, those in recovery for substance abuse and people experiencing homelessness.
State Sen. Luz Escamilla, D-Salt Lake City, said that she would like to see the co-chairs of the committee stand against a 10% cut of $110 million for social services amid a public health crisis that is uniquely impacting public health.
“I’ve been looking at what’s presented and there’s certain pieces that would just be detrimental to the entire pandemic issue based on public safety and public health,” she said.
Sen. Allen Christensen, R-North Ogden, said he didn’t anticipate the Legislature would ultimately touch the 10%. “But we’re going to discuss all of them anyway," he said.
On Friday, the Legislature approved a proposal from Escamilla to use around $37 million from the Medicaid rainy day fund to offset cuts to social services under the worst-case cut scenarios, if it comes to that.
“It’s pouring outside when it comes to this issue,” she said. “And public health is not the place to be cutting."
Ray, R-Clearfield, spoke against her motion, arguing that while it’s “raining now,” the committee is “going to be flooded and underwater” later if the executive branch doesn’t get the state open and the economy moving.
It’s also not a guarantee that the state will get the funding, which will only be available if Medicaid costs increase by 8%.
Ray earlier in the meeting said he was concerned about the cuts lawmakers would have to make to social services but that he also worried about what lawmakers might have to come back and cut later if the state sees another shutdown as a result of a coronavirus surge this fall.
“Do things get closed down again? I don’t know,” he said. “We should be allowing people to be out. Not only does that stir the economy but it also helps infection rates. We have to get herd immunity. And that’s something nobody wants to talk about that if we get hit with a high rebound of COVID and in that flu season, we’re in a lot of trouble.”
Experts say herd immunity would require more than 60% of the world’s population to contract the coronavirus — a far cry from the single digit percentage estimated by most studies.
Utah agencies dealing with the state’s natural resources and agricultural and environmental issues could lose anywhere from $1.8 million to $8.9 million under the scenarios considered by lawmakers.
A legislative subcommittee signed off on plans that would eliminate attorney positions from the public lands policy coordination office, reduce funding for the Jordan River Parkway and potentially decrease the number of watershed projects.
However, after extensive debate, they acted to protect money for the privately owned Hogle Zoo in Salt Lake City and subsidies for EnergySolutions, a politically connected low-level radioactive waste company that donates to most legislators.
The original list of cuts had called for lowering an annual state subsidy to EnergySolutions by up to 35%, or about $603,000. Utah lawmakers in 2018 passed a bill to offer the company an annual reimbursement to offset certain fees it pays.
A representative of the Department of Environmental Quality told lawmakers he knows of no other industries regulated by the agency that receive such a subsidy. But several subcommittee members fought to preserve the annual disbursements, arguing that EnergySolutions is saddled with other hefty taxes and fees.
"At what point is it not a fair share?" said Sen. Daniel Thatcher, R-West Valley City. "At what point are you just piling onto someone unpopular?"
But Rep. Suzanne Harrison, R-Draper, said she viewed the proposed cut as an “innovative way” to save money in a time of restraint.
“I see this as a giveaway to one company,” she said.
Over her objections, the subcommittee voted to take the subsidy off the cut list and instead draw money out of a restricted account.
Legislative analysts had also recommended cutting support for Utah’s Hogle Zoo by between $300,000 and $900,000. That would be a big setback for the zoo, said CEO and president Steve Burns, who explained that the nonprofit has taken a massive hit to ticket sales because of the pandemic closures.
Unlike many other establishments, the zoo’s costs remain relatively constant during a closure, because the animals need care regardless, he said. The loss of state support would be an additional blow that could jeopardize the zoo’s existence, Burns told lawmakers.
"If we have to continue to drop the standards for the animals, we'll no longer be able to meet the requirements of the Animal Welfare Act," he said. "And at that point, the USDA could fine us or even shut us down."
But some lawmakers objected that the state shouldn't be preserving funding for a private institution while axing state employee positions. Ultimately, the panel's majority advised rolling back the reduction so the largest proposed cut would be about $500,000.
“I’m not real excited about having the Jumanji effect,” said Rep. Lee Perry, R-Perry, who argued for supporting the zoo. “I don’t want the zoo to close down and open the gates and having wild animals run free.”