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Utah Legislative Session, Week One


Monday, Feb. 01, 2010


The 2010 Utah State Session commenced on Monday, January 25th and the first week has started with a significant amount of budget scrutiny. We have had direction on both the current Fiscal Year 2010 (July 1, 2009 to June 30, 2010) and the Fiscal Year 2011 (July 1, 2010 to June 30, 2011) budgets. 
 
It is important to understand previous budget cuts and one-time restorative “backfill” moneys as we examine any cuts going forward. In order to fulfill the state constitutional requirement to balance the budget, legislators cut the FY2010 budget during the 2009 Legislative Session by 17%. This was an ongoing, base budget cut that carries over into future fiscal years. However, due to funds given to state governors by the American Recovery and Reinvestment Act (ARRA), Governor Huntsman and the Legislature provided a one-time backfill of 8% for FY2010. Therefore, our effective FY2010 cut during last session was 9% (17% minus the one-time 8% from ARRA funds). USU has already approved and implemented plans to absorb the 9% cut for FY2010. Additionally, USU administration has prepared scenarios to implement the further 8% cut that will potentially arise due to the loss of the one-time ARRA funds.
 
Before the 2010 Legislative Session started, Governor Herbert unveiled a FY2011 budget that would be free of tax increases. Although the Governor’s budget is not binding and only serves as a potential “blueprint” for the Legislature’s final budget action, it did include a mandatory, one-time FY2010 reduction. USU has already started to work on implementing the 3% mandatory cost of living adjustment for all state agencies that Governor Herbert required by executive order. Although the Governor’s budget included this mandatory 3% reduction, the blueprint provided for no further higher education cuts and another one-time FY2011 backfill of 8% to replace the FY2010 ARRA backfill. The Governor’s budget blueprint accomplished this FY2011 backfill primarily through a use of the “rainy day” reserve funds and some other cost savings.
 
Legislative leadership and legislative fiscal analysts, however, do not agree with some of the Governor’s calculations and are therefore requiring some additional work by appropriations subcommittees to look at potential FY2010 and FY2011 cuts. For FY2010, all appropriations subcommittees (including the Higher Education Appropriations Subcommittee) had to prepare for a one-time, across-the-board 4% reduction rather than the 3% on salaries already being implemented due to the Governor’s executive order. Additionally, appropriations subcommittees were required to submit plans for an additional base budget cut of 5% for FY2011. This would effectively be a 13% cut as it would include the 8% cut due to the loss of the ARRA funds plus the additional 5%. 
 
It is very important to note that the cuts currently being discussed by the appropriations subcommittees are not yet mandatory or being implemented. In fact, the final consensus numbers for the FY2011 budget will not be released until February 16th.  However, legislative leadership explains that it is preparing for the potential of continued economic decline and wishes for all state agencies to be prepared for potential cuts. USU and other higher education institutions, therefore, presented numbers to the Higher Education Appropriations Subcommittee that detailed how these potential cuts would be taken. As part of those numbers, USU anticipated a reduction of 288 sections, 720 students, 180 faculty and 93 staff (as part of total system reductions of 3,764 sections, 9,410 students, 619 faculty, and 761 staff). Again, these are not final numbers, but were part of preparations for a potential 13% FY2011 cut.
 
Members of the Higher Education Appropriations Subcommittee felt that these cuts would be too damaging to the system and state economy, and passed the following motion this past week:
 
1- The Higher Education Appropriations Subcommittee requests that Higher Education not receive further budget cuts since—
  • Cuts to Higher Education this far have been disproportionate to other areas of the state budget.
  • Higher Education has absorbed 24,000 new students at a time budgets were being reduced, and institutions are having increasing difficulty providing educational opportunities for Utahns.
  • Higher Education is crucial to the long term economic success of Utahns and the state as a whole.
  • Additional cuts would limit educational opportunities for thousands of Utahns. 
2- If it is found that additional cuts are necessary, we request that cuts to higher education be minimized to the extent possible.
 
3- As directed by Executive Appropriations, the Higher Education Subcommittee recommends:
  • Any cuts, up to 5% of the 2011 base budget should be allocated proportionately across all institutions.
  • Presidents should be given flexibility in making cuts in ways that preserve, to the extent possible, their institutional missions and quality.
The above motion is non-binding on the Legislature, but it will be passed onto the Executive Appropriations Committee as part of the findings of the Higher Education Appropriations Subcommittee. While we appreciate the very real potential for further reductions and the difficult responsibility legislators and legislative leadership in particular have in making very difficult budgetary choices in balancing the budget, we are also grateful for the leadership provided by the members of the Higher Education Appropriations Committee in recognizing the potential impact of a 13% cut. 
 
Again, it is important to understand that none of these actions are final and budgets will not be finalized until probably the last day of the session (on March 11). We continue to work with legislators, legislative leadership, and the Governor on these important budget issues.
 
To learn more about the Legislature, visit: http://le.state.ut.us/. For the Governor’s website, visit: http://www.utah.gov/governor/index.html. To find your state senator and representative, visit: http://le.state.ut.us/GIS/findDistrict.jsp. You may also contact Michael Kennedy, vice president for Federal and State Relations, with any questions at michael.kennedy@usu.edu. 
 
Additional legislative updates are available at: http://higheredutah.org/index.php/2010-legislative-session/
 
Writer/Contact: Michael J. Kennedy, vice president for Federal, State Relations, michael.kennedy@usu.edu


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