Advocates call for state to tap rainy day fund rather than cut social services, education

Utah advocates who work with children and vulnerable populations are calling on lawmakers to dip into the state’s rainy day reserves rather than implement budget cuts that would disproportionately impact the people they serve.

The plea from 18 Utah nonprofit organizations that work with children in poverty, people experiencing homelessness, refugees and people with disabilities comes ahead of a special session planned for next week, when state lawmakers are poised to make potentially deep slashes to the budget as the economy reels from the coronavirus pandemic.

Carrying out hundreds of millions of dollars in cuts “to education, public health, poverty relief, housing, disability services, homeless services and other critical needs in the midst of a pandemic and a recession” would impact “low-income, minority and rural Utahns” most, Matthew Weinstein of Voices for Utah Children said during a virtual news conference Thursday.

And it could also “deepen the recession," he said, “and slow our recovery because of all the job losses that would result.”

While Utah has a strong rainy day fund, legislative fiscal analysts say it’s not as high as the $5.4 billion number advocates cited during their news conference. That figure represents all budget buffers — not just rainy day funds — over a five-year period, meaning not all of it is available in any one year.

In reality, the state probably has somewhere in the ballpark of $1.7 billion in play in rainy day funds between its working rainy day fund and operating reserves. Other reserves have statutory limitations that make them more difficult to access.

Advocates want the state to use anywhere from 10% to 30% of the money that’s been set aside to get through the coming budgetary shortfalls.

Senate President Stuart Adams, R-Layton, said Thursday that legislative leaders are heeding calls from the public and are drafting a plan for release early next week that will hold education and social services as “harmless as possible” with the help of the state’s working rainy day fund of nearly $900 million.

As he called for a special session next week, Gov. Gary Herbert said his hope is also that the budget for schools will remain intact.

“With a little bit of tightening of our belt, which is going to be necessary, my hope is that we will be able to keep education held harmless, for example, and not have to cut our education budget," he said. "I think they — the teachers and those involved in education — have proven they are very willing to adapt to the challenges, and innovate and find better ways to do things.”

The state’s appropriations subcommittees met last month to prepare 2%, 5% and 10% recommended cuts to the state’s $7.6 billion base budget in light of decreased state revenue as a result of the coronavirus pandemic. They hope a 10% carve-out is a worst-case scenario, but they won’t know for sure until new revenue numbers come in early next week.

Staffers in the Office of the Legislative Fiscal Analyst currently 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.

Even the smallest of cuts to compensate for those losses could come at a cost, particularly to public education and social services, which make up the largest chunks of the state budget. A 2% scenario would require about $76 million in cuts from public education and $23 million from social services.

The rainy day fund is meant to get the state through hard times like these, advocates argue — and it’s pouring enough without diminishing resources that people need more now than ever amid high unemployment and uncertain economic times.

Social services programs “help families weather recessions and ensure a faster overall economic recovery,” said Alex Cragun, a food security advocate with Utahns Against Hunger. “As a state, we are fortunate to have wisely saved for budgetary shortfalls, and we urge the Utah Legislature to consider utilizing our rainy day funds” to make sure these programs continue.

William Cosgrove, a member of the American Academy of Pediatrics, Utah chapter, said slashes to education would be detrimental to the state’s “threadbare, already underfunded public schools.”

“Utah already has the most poorly funded schools in all of the states,” he said. “We have already cut away any fat or any inefficiencies, and any further cuts will be to bone and muscle.”

Adams said he recognizes the importance of investing in the state’s future through the education budget, noting that “if you don’t invest in that human capital, your future, you may be able to fix your problems today, but you’ll have bigger problems in the future.”

And he noted the increased need in social services as the coronavirus pandemic wears on. The pandemic may be physical, he said, but social distancing measures and other efforts to curb the spread of the virus are affecting people’s mental health as well.

“It would be very difficult to cut those budgets right now when we’re in a situation which makes that more acute,” he said.

But even as some lawmakers mull the use of the rainy day fund, others worry that it’s too early to dip into reserves. They’re bracing for the possibility that the economic downturn the state is facing as a result of the pandemic now could last for years.

Sen. Jerry Stevenson, chairman of the executive appropriations committee, acknowledged that “everything is under consideration” — including the use of the money the state has set aside — as lawmakers work to readjust budgets.

But “personally, I don’t think this is the time to spend this money,” the Layton Republican said, noting that there are other ways to balance the numbers.

“We’ve got a long winter ahead of us,” Stevenson said. “If you know there’s a long winter coming, you go find a blanket and stay warm on a cold night in October. You don’t take the doors off your house and burn them for firewood. You keep all those doors on [as long as] you possibly can until you have to do something that drastic.”