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Tax and Budget

The goal of Voices for Utah Children's State Fiscal Analysis Project is to examine Utah's tax and budget policies and analyze their impact on working families.

We identify focused fiscal strategies – for both revenues and spending – to help strengthen struggling families. This project translates the complex world of state fiscal policy into credible and timely information that is used by policymakers, community activists and the media.

Budget

Voices for Utah Children - Voices for Utah Children - Displaying items by tag: budget

Voices for Utah Children works to make Utah a place where all children thrive. We start with one basic question: "Is it good for kids?" At Voices for Utah Children, we believe that every child deserves the opportunity to reach his or her full potential.
  • Utah’s state budget  has been undermined due to a nearly 1200% increase in General Fund earmarks during the past decade. Earmarking ties policymakers’ hands so they can’t adapt the budget to the evolving needs of the state’s ever-growing and ever-changing economy and population. And these are "unfunded" earmarks, meaning that they do not come with a new funding source, even though they go to meet newly identified investment needs, primarily in transportation. Because they are unfunded, these earmarks divert resources from other critical priorities such as education, public safety, aid to the disabled and substance abuse treatment.  The impact of Utah’s earmarks explosion on disabled Utahns – thousands spend years waiting for urgently needed help. Due to the growing diversion of General Fund revenues, Utah is meeting only 15% of its drug treatment need.   How is the earmarks explosion affecting public safety?  Pew’s Public Safety Performance Project found that resource shortfalls are a factor in rising recidivism rates.   How is the earmarks explosion impacting Utah higher ed, where tuition is up 200% since 2000?   If the Education Fund is separate from the General Fund, how can the GF earmark explosion hurt K-12 education? Learn how by reading the complete report: What's still eating Utah's General Fund? The following essay was originally published as an op-ed in the Salt Lake Tribune: Op-ed: Children are the losers in Legislature’s earmarking trend Utah’s state budget has been undermined in the last decade by an increase in earmarks — from $42 million in Fiscal Year 2005 to over half a billion dollars in the FY 2015 budget approved by the Utah Legislature earlier this year. These earmarks have risen by almost 1,200 percent and now make up nearly one-fifth of Utah’s General Fund, an unprecedented level. This explosion of permanent earmarks diverting revenues from their intended purpose is a problem both in principle and as a practical matter. They are a problem in principle because they tie the hands of policymakers, denying them the flexibility to adjust course each year in response to the evolving needs of Utah’s growing economy and population. They are a problem in practical terms because they divert revenues that were originally meeting Utah’s urgent needs in areas where the state has consequently fallen behind such as education, public safety, aid to the disabled, and drug treatment. These earmarks are also "unfunded" earmarks in the sense that they were created without a new revenue source to finance them, even though they aim to meet newly identified public investment needs. The overwhelming majority of the new earmarks have been for transportation projects. Few would deny that new transit and highways are important. But the prudent way to pay for newly identified needs is to create a revenue source to finance them rather than diverting the funds from other critical needs that are less popular or politically influential, though they remain equally critical to the state’s future. These unfunded earmarks will continue diverting dollars from the General Fund indefinitely, because none of them has a sunset provision. Even if no new earmarks are created in future years, the amount of money diverted from the General Fund will continue to grow under current law. Perhaps the most worrisome aspect of the explosion of unfunded earmarks is that it’s not the first time that Utah’s policymakers have chosen "robbing Peter to pay Paul" over finding new revenue sources to keep up with the state’s growing needs. This recent diversion of General Fund dollars to transportation earmarks bears considerable resemblance to the 1996 decision to amend the state constitution to make it possible to divert K-12 education funds to pay for higher education instead. Prior to that time, Utah was ranked in the top 10 states for our K-12 education funding effort. Since then, we have fallen to about the national average in both our education funding effort and our graduation rates. In the most recent year for which data are available, the $252 million diverted from the Education Fund for higher education in FY 2012 was almost exactly equal to the amount it would have taken to boost Utah from 50th to 49th place in the nation in per-pupil K-12 education funding. For a state like ours, performing at about the national average should not be considered "good enough." It’s time for Utah to break a bad habit. The governor and Legislature should reverse course and make the decisions necessary to restore best practices in state budgeting and place the state and its future on firmer fiscal ground. For more information, see the complete report: What's still eating Utah's General Fund?

  • Salt Lake City – Utah’s unrestricted General Fund has been undermined due to a nearly 1200% increase in earmarks during the past decade. Over half a billion dollars from the state General Fund are earmarked in Fiscal Year 2015 compared to $42 million in Fiscal Year 2005, a rise from 2% to over 18% of the overall General Fund, according to a new report from Voices for Utah Children: What’s Still Eating Utah’s General Fund: How Unfunded Earmarks Are Undermining the Budget Process and Affecting Utah Families and Children. Most of these earmarks are dedicated to transportation, diverting resources from other priorities such as education, public safety, aid to the disabled and substance abuse treatment. All of these new earmarks are unfunded earmarks, meaning that none of them was created with a new revenue source to finance it, even though they address newly identified investment needs. Unfunded earmarks will continue diverting dollars from the General Fund indefinitely, because none of the major General Fund earmarks has a sunset provision. Even if no new earmarks are created in future years, the amount of money diverted from the General Fund will continue to grow under current law. “Earmarking ties policymakers’ hands so they can’t adapt to the evolving needs of the state’s ever-growing and ever-changing economy and population,” said Matthew Weinstein, State Priorities Partnership Director for Voices for Utah Children. Weinstein recommended that Utah lawmakers revisit earmark decisions and incorporate sunset provisions into all earmark legislation going forward. Weinstein continued, “The recent diversion of General Fund dollars to transportation earmarks bears considerable resemblance to the 1996 decision to divert Education Fund dollars to higher education. That’s why Utah is last place in the nation in per pupil funding for K-12 education. Robbing Peter to pay Paul has become an unfortunate pattern in Utah’s public finance decision-making.” For more information, see the complete report: What’s Still Eating Utah’s General Fund: How Unfunded Earmarks Are Undermining the Budget Process and Affecting Utah Families and Children.

  • How Unfunded Earmarks Are Undermining the Budget Process and Affecting Utah Families and Children Utah’s unrestricted General Fund continues to decline as a stable and reliable revenue source due to a nearly 1200% increase in earmarks from FY 2005 to FY 2015, from $42 million to over half a billion dollars, from 2% to over 18% of the overall General Fund and still rising. This practice of earmarking, which means a multi-year diversion of funds (and none of the major General Fund earmarks has a sunset provision), runs contrary to best practices in public budgeting because it ties the hands of policymakers and undermines their ability to use the annual budgeting process to meet the evolving needs of the state’s ever-growing and ever-changing economy and population. This explosion of earmarks has been primarily for the purpose of meeting the state’s transportation needs. The earmarks in question are all “unfunded” earmarks, meaning that none of them was created with a new revenue source to finance it, even though they address newly identified investments required to keep up with the state’s growing economy and population. This enormous diversion of resources has meant that everything else financed by the General Fund, including education, public safety, drug treatment, aid for the disabled, support for vulnerable families, and many more, has been given short shrift, leaving critical needs unmet and allowing the state to fall behind in a number of important areas, threatening to undermine progress toward the state’s most important goals. The rise of unfunded earmarks bears considerable resemblance to the decision made by an earlier generation of policy makers in 1996 to divert Education Fund revenues to fund higher education as well as K-12 education. The report concludes with a call for a return to best practices in the annual budgeting process so as to allow policymakers to adapt to changing circumstances in good times and bad. Read the complete report:What's Still Eating Utah's General Fund? What Does the General Fund Do? All Utahns benefit from an adequate General Fund. The state programs it pays for provide functional and efficient courts, a statewide system of colleges and universities, and the enforcement of rules regarding commercial transactions, environmental protection, water safety, control of contagious diseases, and much more. The GF also provides a safety net for families in need, including the disabled and those in need of drug treatment and mental health services.  

  • On August 28 2014, economist Sven Wilson testified before the Utah Legislature's Health Reform Task Force about the complex question of whether the economic benefits of Healthy Utah outweigh the costs.  Showing a chart of costs and benefits with benefits marked in green and costs in red, he said,"Notice there is quite a bit more green than red." Healthy Utah would benefit poor individuals by providing them with health insurance. It would benefit the healthcare industry by preventing uncompensaated care and would benefit other industries though economic expansion. It would benefit state and local governments by reducing public assistance costs and increasing tax revenues as the economy expands. The program costs to the state government would be relatively small. He went on to add, "This is a really boring policy analysis problem because the answer is painfully obvious."

  • This economic analysis of the Healthy Utah Plan was funded by Voices for Utah Children and completed by Sven E. Wilson, PhD. The Healthy Utah plan is the governor's proposal to use Medicaid expansion funds to provide health insurance to people who are currently not covered by Medicaid and who do not earn enough to qualify for subsidies. The report offered the following conclusions and recommendations:     There is a lot of uncertainty related to the Healthy Utah plan. Usually the presence of uncertainty argues for exercising caution. Shouldn’t the state exercise caution in moving forward on bold, new plans? Yes. But caution does not mean inaction. The costs to inaction in this case are millions of dollars in foregone benefits to state residents with each passing week. Those losses are certain, and they are not coming back. The ACA is drastically re‐shaping American health care. Most Utahns, according to opinion polls, believe these changes are not for the better. But the state has no power to undo the ACA or to ignore its requirements or the taxes associated with it. What the state does have the power to do is reclaim part of the funds that state residents are already contributing to fund the ACA. The Healthy Utah plan may or may not be the ideal option to make that happen, but it clearly brings hundreds of millions of dollars into the state to help low‐income residents who have no other means of obtaining health insurance. It does so at minimal risk to state budgets and at considerable gain to the state economy.  The economic case for moving forward with Healthy Utah at this time is compelling. Policymakers can move forward with confidence—even with the uncertainty that faces us.     Download the complete report here: The Economics of the Healthy Utah Plan: A Preliminary Analysis

  •   Governor’s Medicaid Plan Will Bring $652 million to Utah Salt Lake City – According to a newly released economic analysis, The Economics of the Healthy Utah Plan: A Preliminary Analysis, by Dr. Sven Wilson and commissioned by Voices for Utah Children, the Governor’s Healthy Utah plan will provide economic benefits to state and county governments. The Healthy Utah plan would provide comparable economic benefits to traditional Medicaid expansion. These benefits were projected by Public Consulting Group in a report commissioned by the Utah Department of Health in 2013 and included: Expansion of state economy ($652 million) New state and local tax revenues as the state economy expands ($46 million) Reduction in uncompensated care ($181 million) Reduction in public assistance costs ($61 million) Health care benefits to the poor ($800 million)   In addition to these benefits, the Healthy Utah plan would lead to insurance industry profits.    “The worst economic option for Utahns is to send our tax dollars to Washington and get nothing in return,” states the new report by Wilson. Citizens in states that have not accepted federal dollars for Medicaid, including Utah, are paying hundreds of millions of dollars in federal taxes annually from which they receive no benefit.   Because Utah has not accepted federal dollars to cover more people under Medicaid, childless adults with incomes less than 100% of the federal poverty level (FPL) and parents with incomes between 50‐100% of the FPL fall are not eligible for either Medicaid or the subsidized healthcare coverage that is offered to wealthier citizens.  Under Healthy Utah, people in the coverage gap would receive government funds to buy insurance through their employers or the Avenue H exchange.   According to the report, “the Healthy Utah plan...clearly brings hundreds of millions of dollars into the state to help low‐income residents who have no other means of obtaining health insurance. It does so at minimal risk to state budgets and at considerable gain to the state economy.”   The report also points out the opportunity cost of continuing to do nothing: “The costs of inaction are millions of dollars in foregone benefits to state residents with each passing week.”   The analysis was completed by Sven E. Wilson, PhD, chief economist for Notalys.  Wilson is also a professor of Public Policy at Brigham Young University and a research economist at the National Bureau of Economic Research.  

  • Organizations representing Utah’s most vulnerable citizens including children, elderly, and disabled delivered a letter to Governor Gary R. Herbert today encouraging transparency with respect to the fiscal implications of whether to accept or reject the Medicaid Expansion funds provided by the federal government under the Affordable Care Act (ACA).

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