Herbert's $14.3B budget proposal gives $500M to education

SALT LAKE CITY — Gov. Gary Herbert proposed a new $14.3 billion state budget Thursday that provides $500 million for public and higher education, including the largest increase in funds going to local school districts in a quarter of a century.

The governor's spending plan for the budget year beginning July 1, 2015, puts pressure on lawmakers to look at a gas tax increase by calling for $94.2 million in sales taxes earmarked for transportation to instead be used for education needs.

"We need to have the discussion as far as how we can in fact fund transportation long term," Herbert said. "That means on the table for discussion is an adjustment in the gasoline tax."

There's a "legitimate argument" to raising Utah's 24.5-cent a gallon gas tax for the first time in 17 years, the governor said, stopping short of making a specific recommendation to the 2015 Legislature that begins meeting in late January.

Shifting the money from the transportation fund will not affect any current road projects, he said. Herbert vetoed the 2011 legislation creating the earmark, but lawmakers overrode his action.

"I can keep transportation funding going and build the roads that we have need for that are on the books today without any hiccup. But I do need money in education today," he said. "It's a matter of timing and I think the timing is appropriate."

The budget Herbert will submit to lawmakers recommends a 6.25 percent increase in the state's funding mechanism for schools, known as the weighted pupil unit. It would be the largest boost in 25 years.

The increase, more than double the amount approved for the current budget year, allows local school boards to decide how to use it for teacher salaries, professional development, technology investment and other needs.

Last session, Herbert and outgoing House Speaker Becky Lockhart, R-Provo, sparred over her plan to spend up to $300 million to replace textbooks with computer tablets in schools throughout the state.

Lockhart, seen as a potential challenger to the GOP governor in 2016, did not seek re-election. But her successor, House Speaker-elect Greg Hughes, R-Draper, is already at odds with the administration over how to treat new revenues.

Herbert's budget includes the $638 million in new money available from growth in tax revenues as well as surplus funds. Hughes and other legislative leaders say revenues are growing too quickly and some money should be held back.

The governor is calling for all of that money to be used, noting that Utah's Rainy Day funds will be above the state's pre-recession levels with $478 million. Herbert said state revenues are growing only slightly above historic averages.

"We need to be wise and prudent in how we spend the dollars. I get that," he said. "But we should also be grateful that we have a healthy economy that is producing more money that allows us to fund areas that have been underfunded for so long."

But leaders of the Utah Legislature's Republican supermajority aren't so sure.

"Our challenge is we want to be cautiously optimistic," Hughes said. "We want to stop the yo-yoing, we want to make sure what we appropriate, we can sustain. … You do it when times are good. You have to show that fiscal restraint."

Senate President Wayne Niederhauser, R-Sandy, said while lawmakers agree with the governor that more money needs to go to education, it has to be a sustainable amount.

"You can't overextend yourself and have to take it away," Niederhauser said.

Both Hughes and Niederhauser said getting lawmakers to agree to a tax increase when there's been such sizable revenue growth and surpluses would be tough, even though 2015 is not an election year and low gas prices ease the impact.

"It's going to be a hard sell in a year where there's a lot of money," Niederhauser said.

But Salt Lake Chamber President and CEO Lane Beattie said investments in the state's future growth must be made in good times, particularly with an $11.5 billion deficit in transportation funding forecast through 2040.

"We will compromise our future economic success if we ignore these needs," Beattie said.

The $500 million the governor wants to spend in new money for education includes, in public schools, $58 million to pay for 8,000 new students and $56 million for buildings, technology and infrastructure.

For higher education, the half-billion allocation includes $99 million for new buildings as well as operation and maintenance, $15 million for performance incentives and a 3 percent raise for college and university employees.

Education leaders welcomed the hefty infusion of funds.

State Superintendent of Public Instruction Brad Smith said he was "very, very glad" to see what he labeled an investment in public education and optimistic about how the governor's budget will be received by lawmakers.

"We're in a good place financially as a state and I think it's time that we have that kind of a major and substantial investment in public education," Smith said, describing lawmakers as "earnest about changing and improving education in Utah."

State Commissioner of Higher Education David Buhler said he appreciates the high priority the governor gave education, especially salary increases, since Utah's colleges and universities "compete in a national marketplace" for employees.

Utah Education Association President Sharon Gallagher-Fishbaugh said the boost in public education spending "positions us to begin addressing the additional resources so desperately needed in Utah's grossly underfunded public school classrooms."

Other recommendations by the governor include $4.6 million to administer Healthy Utah, his alternative to the Medicaid expansion available to the state under the Affordable Care Act.

Healthy Utah has yet to be approved by the Legislature, and both Hughes and Niederhauser raised concerns about the long-term costs associated with providing health care to low-income Utahns.

Herbert also wants to use $46 million towards relocating the aging Utah State Prison in Draper. A new prison is expected to cost $450 million, but it is not clear the Legislature's Prison Relocation Commission will settle on a site by next session.

Another $10.5 million in the governor's budget would be used for implementing the recidivism reforms proposed by a study aimed at curbing growth in the state's prison population that was conducted with the help of the Pew Charitable Trusts.

And Herbert also is recommending $1 million to equip Utah Highway Patrol troopers with body cameras, calling them the "next step" to ensuring accountability but cautioning they are not a "silver bullet."

He said recent events nationally have "confirmed in my own mind that we need to have something that will help protect the public and give them confidence in what's going on and also protect the law enforcement officer who is laying it all on the line."

There is money in his budget for clean air initiatives, too, including $20 million to replace old school buses and $1.5 million to swap out high-pollution equipment in homes and small businesses.

The governor announced his budget at Granite Park Junior High School. The school has one of the most diverse student bodies in the state, with 60 nationalities represented.

Omar Hussein, 14, moved from Kenya as a child. He said after talking with Herbert he might switch his career goal from engineering to journalism. But Omar, a ninth-grader, said he's not interested in being governor himself someday.

"That seems like a lot of work," he said after sitting through a lengthy presentation by Herbert on the budget in the school's library surrounded by fellow students, reporters and members of the governor's staff.

Contributing: Morgan Jacobsen

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