Rainy Day Funds Help Save Statewide Budgets

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By Representative Carl Albrecht, District 70

On Thursday, legislators met both in person and virtually for the 5th Special Session. Lawmakers considered 26 bills addressing the state’s budget and policies related to COVID-19. A few months ago, none of us expected to be here back in session, having to make incredibly hard decisions about budget cuts and policies to support individuals, organizations and businesses impacted by a global pandemic.

Because of a multi-pronged approach that includes the utilization of spending reductions, cash flow management, drawing a portion of the education rainy day fund, the general rainy day fund and the Medicaid rainy day fund, as well as budgetary reserves, we will only be voting on overall cuts of 1.7% to the state budget.

That 1.7% would be significantly higher and the cuts much deeper had we not created a state with policies that led to a flourishing economy and strong reserves set aside for this very day. Legislators used approximately 27%, or $680 million, of the multiple rainy day funds to backfill budgets so drastic cuts did not need to take place. Both education funding and social services funding are increasing through this process. That is truly remarkable considering the times we are in.

The collective commitment to work together and to keep our eye on Utah’s long-term health and prosperity has us primed to get people back to work, businesses back to prosperity and Utah back on top.

Budget

Twenty six states, including Utah, have published projected revenue shortfalls for fiscal year 2021. Of those states:

– Nine states project budget cuts of 4-10%
– 12 states project budget cuts between 10-20%
– Four states project budget cuts 20% or higher

Utah was projected to have cuts of 0-5%. Overall, we cut 1.7% of our budget, by far the lowest cut reported thus far. Below are each appropriations subcommittee’s cuts:
– Business, Economic Development, and Labor – 3.6% cut
– Executive Office of Criminal Justice – 0.6% cut
– Higher Education – 2.2% cut
– Infrastructure and General Government – 18.8% cut
– Natural Resources, Agriculture, and Environment Quality – 2.4% cut
– Public Education – 1.3% increase
– Retirement and Independent Entities – 0.6% cut
– Social Services – 5.4% increase
– Executive Appropriations Committee – 26.9% cut

Education

During these fiscally challenging times, state funding is limited and most programs throughout the state are undergoing budget cuts. However, the Utah Legislature’s commitment to education and our teachers is evident as we passed an overall increase in public education funding. In the budget, we are increasing the WPU by 1.8% and funding for growth. The legislature also passed a bill to allow school districts to use revenue generated by the Capital Levy to fund school district’s general funds for fiscal year 2021.

H.B. 5011, WPU Value Increase Guarantee

This bill provides that certain revenue be dedicated annually to increase the value of the weighted pupil unit (WPU), up to a cumulative amount of $140,500,000 (the cost avoided by replacing the 6% increase to the value of the WPU initially funded in the fiscal year 2021 public education budget with the 1.8% increase to the value of the WPU included in H.B. 5011, Public Education Funding). The bill amends a section of code that only takes effect if the amendment to the Utah Constitution proposed by S.J.R. 9, Proposal to Amend Utah Constitution – Use of Tax Revenue, 2020 General Session, is approved by a majority of voters in the next general election.

Juneteenth

Representative Sandra Hollins read the Utah Legislature’s citation recognizing Juneteenth, a celebration of emancipation and our commitment to the equality of all people.

COVID-19 Update

As of Friday, June 19, the Utah Department of Health has reported 15,839 positive cases (an increase of 495 cases from Thursday), 1,120 hospitalizations (150 current hospitalizations) and 152 deaths (an increase of three from Thursday). In all, Utah has administered 282,685 total tests. Additionally, it is estimated that 8,786 Utahns have recovered from COVID-19. Thank you and your families again for doing your part to slow the spread of COVID-19.

In close consultation with local health authorities and with the Utah Department of Health, Governor Gary Herbert has approved requests for the following counties to transition to green, or the “New Normal Health Risk” Status: Beaver, Daggett, Duchesne, Emery, Garfield, Millard, Piute, Uintah and Wayne beginning Friday, June 19, 2020 at 1 p.m. I believe Sevier and Sanpete will go “green” this week.

Unemployment

Below is the latest update on Utah’s unemployment insurance claims. A few things to highlight from June 7-13 are as follows:

– Unemployment insurance claims decreased 11.7% from the previous week to 4,847 claims
– This week’s claim volume represents a 329% increase from the average weekly claims seen in 2019
– More than $24.8 million paid in state benefits
– More than $47 million paid in federal dollars from the CARES Act $600 weekly stimulus
– Pandemic Unemployment Assistance (PUA) claims had an additional 1,714 individuals file and more than $11.9 million paid in federal dollars last week for PUA benefits

Total combined claims from March 15 to June 13
– Traditional: 186,609 claims; $681 million benefits paid (66% federal funds)
– PUA: 31,592 claims; $50 million benefits paid (100% federal funds)

Looking ahead, the CARES Act $600 weekly stimulus will go away at the end of July for all unemployment programs. At this time, the unemployment benefit will decrease substantially. We anticipate this will trigger many people to jump back into the workforce even if they are currently considered “job attached.” Those who start now to look for work will have an advantage on those who wait.

Utah Leads Together 4.0

On Wednesday, June 17, the Utah Leads Together 4.0 was released.

2020 has been unlike any other year. We have been faced with tremendous health, economic and societal challenges. I’ve been so impressed with the way people across our state have adapted, time and again, to changing circumstances and new challenges. Utahns have managed hospitalizations and we are now positioned to take additional steps to get our economy moving again.

The updating plan outlines the next phase of our coordinated effort to:
– Return to work while following public health guidelines
– Connect unemployed Utahns with available jobs, and
– Utilize the $50-60 million of CARES ACT and other funding to encourage consumers to re-engage in the local economy.

Utah Leads Together 4.0 lays out 100, 250 and 500-day horizon plans to encourage economic recovery and revitalization. As part of the plan, over the next 100 days the Department of Workforce Services will work with unemployed Utahns to align worker skills with available jobs, providing employment for over 21,000 Utahns.

Representative Spendlove and Senator Hemmert ran the COVID-19 Economic Recovery Grant Programs bill. This set up the framework to use over $50 million from the CARES Act revenue to target businesses that were most affected by the pandemic and encourage consumers to re-engage in our economy as outlined in this version of the plan.

The Economic Recovery Grant Programs is a set of grants that will go directly to the business and organizations that have been most affected by this pandemic. The grants will go directly to the business with a requirement to that business to do a “give back” to the consumer. The CARES funds must be spent by the end of the year, making it important that these grants get up and running as soon as possible. I can think of no better way to get our economy moving again then by granting some of our CARES funds directly to businesses most affected.

In the 250-day plan, we will focus on the key foundations of economic growth: investment and productivity. To do this, we will put our state’s excellent credit to work to the advantage of our communities. Bonding for transit, outdoor recreation, water, transportation and other infrastructure projects will allow us to meet current economic needs while also investing in our future economic growth. We will begin work on our bonding proposal in the coming months and will focus on shovel ready, multi-modal and multi-use projects.

As we look to the 500-day horizon, we have the opportunity to set a new path and create a new normal. We must focus on big investments to capitalize on our competitiveness and business growth.

We know these have been some difficult months for Utahns – and some very difficult months for many Utahns who have been more directly impacted by the pandemic. Our collective commitment to work together and to keep our eye on Utah’s long-term health and prosperity has us primed to get people back to work, businesses back to prosperity and Utah back on top.

Get Involved and Vote!

You have either received or will soon receive your primary ballot. We have critical races throughout the state and your voice matters. You can learn more at vote.utah.gov.

Again, thank you for the opportunity to serve and represent District 70. I will always stand tall for rural Utah, its people and our way of life.

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