Utah lawmakers take on tough issues, face financial fallout from pandemic

SALT LAKE CITY — The 2020 Legislature began with a repeal of a widely rejected tax reform package and ended Thursday with lawmakers making another attempt to address the state’s budget issues, this time by proposing a change in how education is funded in the Utah Constitution.

However, a $16 million tax cut that would have meant more Utahns over 65 wouldn’t have to pay state income taxes on their Social Security benefits passed the House but never got a vote in the Senate as concerns ratcheted up over the impact of the new coronavirus pandemic on the economy and the state’s budget surplus.

Lawmakers did take on plenty of high-profile issues during the 45-day session that ended at midnight Thursday.

Their actions included cutting a deal with backers of Better Boundaries over changes to the voter-approved initiative setting up an independent redistricting commission; negotiating changes with Salt Lake City on the inland port; imposing new restrictions on abortions; reforming higher education governance; and funding some big-ticket fiscal notes for mental health and affordable housing.

The fear of a financial downturn loomed large by the end of the session, as new COVID-19 cases were diagnosed in Utah and restrictions were put in place on large gatherings to help halt the spread of the deadly virus, including universities moving to online classes and the cancellation of Utah Jazz games and other sporting events.

In anticipation of a special session while the virus is continuing to spread, legislative rules were revised to allow lawmakers to meet electronically rather than gather again in the state Capitol during a public health emergency or other crisis.

Lawmakers are increasingly likely to be called back to adjust revenue projections for the new budget year that starts July 1. Money set aside in the state’s $20 billion budget for some big projects, such as $60 million for a new state office building at the Capitol complex, can no longer be spent without additional authorization.

“I would never say no on that issue. There may be a need to come back in,” Gov. Gary Herbert said, even though he stressed “prudence being the name of the game here” when it comes to putting aside money in the state’s rainy day funds.

Senate President Stuart Adams, R-Layton, agreed.

“When we look at the economy, I think there might be one,” the Senate president said. “Coronavirus, our budget, we’re concerned about that so we think we may be back. ... We’re just keeping our calendars open.”

Adams said the state is well-equipped to weather a financial setback if necessary.

“You never can prepare enough, but we think we have prepared for any challenges the state will face. It won’t be easy. We’d like to see the additional revenue but we have managed the state, I think, very well,” he said. “We hope this economy rebounds fast and this thing gets behind us fast. But we’re ready if it doesn’t.”

Senate Minority Leader Karen Mayne, D-West Valley City, said Democrats were working with the majority party.

“We have options everywhere. We’re on top of this. And we have one voice collectively,” Mayne said before fist-bumping with Adams.

“I think everyone is worried about the economy,” House Speaker Brad Wilson, R-Kaysville, said. “I have so much confidence in our ability as a state to manage this, and our preparation for it.”

Wilson said Utah’s senior citizens would be helped more from the Legislature’s investment to fight the coronavirus — now up to $24 million, including some federal funds and $3 million added Thursday specifically to assist the elderly — than they would have from getting a break on their Social Security benefits on next year’s tax returns.

Senate Budget Chairman Jerry Stevenson, R-Layton, said Utah still has plenty of borrowing power.

“We have not used up our credit card. Our credit is amazing and we have lots and lots of capacity if we have to move in that direction. None of us want to and that is not a prediction. We’ve got a long way to go before we have to.”

Enough money wasn’t a worry before the virus struck, thanks to a surplus approaching a billion dollars. But years of lagging growth in sales tax revenues compared to income tax collections that are earmarked for education meant less was available for social services, public safety, environmental quality and other areas of state government.

The latest plan for solving that problem surfaced late in the session despite Republican legislative leaders saying tax reform should wait until next year after a citizens backlash forced the repeal of a package passed in a December special session that included raising the sales tax on food.

The governor praised the Legislature’s work on the new proposal focused on education funding, calling it “almost like a phoenix rising out of the ashes of tax reform. It’s really nothing short of a miracle. It’s one, I think, everybody can take a bow on and take some credit.”

Wednesday, Herbert, along with legislative and education leaders, linked arms at a news conference in support of an agreement reached with the Utah Education Association to win teacher backing for expanding the constitutional earmark on income taxes to services for children and people with disabilities.

The concessions made to bring the last major education organization on board — an additional 1% increase in per-pupil funding on top of the 5% already approved, and $200,000 for teacher scholarships — have been added to the state budget.

But the guarantees that student growth and inflationary cost increases in public education will automatically be funded in the future, contained in HB357, are tied to the fate of the constitutional amendment that will be on the November ballot. If voters reject the amendment, the guarantees go away, too.

And despite the show of solidarity for the agreement, lawmakers acknowledge the language of the amendment will need to be tweaked in a special session of the Legislature before it goes to voters because of concerns raised by some education officials.

Related:

Utah Gov. Gary Herbert recaps his final legislative session

Utah Gov. Gary Herbert took to a podium in the Capitol’s Gold Room on Thursday night to review the 2020 legislative general session, his last as governor.

In addition to closed-door negotiations with education leaders as part of new tax reform efforts, lawmakers spent this session in behind-the-scenes meetings making deals on other issues.

Those included a compromise with Better Boundaries, backers of Proposition 4, the voter-approved citizens initiative creating an independent redistricting commission to recommend new legislative, congressional and State School Board boundaries following the census every decade.

Those talks manifested to the public late in the session, when negotiations appeared to break down. But Better Boundaries and lawmakers eventually struck a compromise after more closed-door talks. Supporters said the bill, SB200, struck a balance by preserving the spirit of Proposition 4 without overriding the Legislature’s constitutional responsibilities to oversee redistricting. The Legislature approved the compromise bill with mostly bipartisan support.

Lawmakers also approved a pair of bills resulting from negotiations over the controversial Utah Inland Port Authority.

Even before the session began, House Majority Leader Francis Gibson, R-Mapleton, started negotiating with newly elected Salt Lake City Mayor Erin Mendenhall, who sought improvements to statute city leaders deemed a state land and power grab when it was first approved in 2018.

The result of those negotiations was HB347, a bill to give the Salt Lake City mayor a seat on authority’s board and restore Salt Lake City’s land use authority and 25% of the city’s tax increment. Additionally, lawmakers approved a separate bill, SB112 sponsored by Senate Minority Leader Luz Escamilla, D-Salt Lake City, to create a “community enhancement program” aimed at addressing the impacts of an inland port on surrounding areas.

City leaders supported the pair of bills as incremental improvements to the statute. Environmental activists opposed to the port, unsuccessful in their efforts to lobby for a full repeal of the port, were left disappointed by both bills, saying they didn’t go far enough to ensure environmental protections from a port’s impact.

Abortion was the most controversial issue this session, splitting Republicans and Democrats and attracting national attention when all six female senators walked out of the chamber in protest, refusing to vote on HB364, which requires women seeking an abortion to undergo an ultrasound.

Lawmakers passed SB174, a sweeping ban with few exceptions that would only go into effect if the Supreme Court overturns Roe v. Wade, as well as SB67, which requires fetal remains from an abortion or miscarriage to be buried or cremated.

Big changes were made in Utah’s higher education system. Now technical and degree-granting colleges and universities will operate one governing board and eventually under one roof under SB111, sponsored by Senate Majority Assistant Whip Ann Millner, R-Ogden.

SB111 created the Utah Board of Higher Education, which will succeed the Utah State Board of Regents and the Utah Technical Colleges board of trustees. A single governance system is expected to facilitate seamless credit transfers for students who may attend public technical colleges and degree-granting colleges to advance in their careers or train for new jobs as workforce needs change.

Out of a long list of funding requests, mental health surfaced as one of the biggest priorities budgeted by lawmakers.

The Legislature approved a total of more than $23 million in ongoing and one-time money for a pair of bills seeking to expanded and revamp Utah’s entire approach to mental health.

That includes money to help build several new “crisis centers,” or 24-hour facilities where people experiencing mental health episodes can go rather than emergency rooms. That funding also included $6.3 million in ongoing money to open about 30 mothballed beds at the Utah State Hospital.

Additionally, lawmakers approved $10 million in one-time money for SB39, an affordable housing bill that originally sought $35 million. Housing advocates see the smaller but still substantial fiscal note as a win after the Legislature last year stripped a similar bill of its $24 million fiscal note.

Contributing: Marjorie Cortez, Sahalie Donaldson

Related topics