politicalcivility.com Blog

The state has issued its Budget overview and two items jumped off the page.  1) The state depends on the federal government for 50%+ 22% (See the update) of the state budget and 2) the 2008 budget has been revised up $1 BILLION for FY2008.

[UPDATE]

I wanted to get this clarification from Mike on this post:

The LFA report does not explicitly state what “state funds” are or are not. The GOPB report is much clearer in this regard which is why I usually base my calculations on GOPB data. Unfortunately, the GOPB report doesn’t come out until April or sometimes later.

“State funds” include
- individual income tax
- corporate income tax
- unearmarked general sales tax
- other general fund (severance, insurance premiums, tobacco/beer taxes, liquor PROFITS)

“State funds” exclude
- dedicated credits such as university/college tuition, liquor TAXES, gas taxes, motor vehicle registration fees
- earmarked general sales tax
- education property taxes such basic, voted, board, K-3 (other K-12 property taxes such as debt service, recreation, transportation, etc are excluded from both “state funds” and total funds.

Also, GOPB is more accurate in calculating growth rates. For example, when comparing FY09 and FY08, GOPB excludes FY08 supplementals because FY09 supplementals won’t be known until next year. By including FY08 supplementals when calculating growth rate, which LFA does, the growth rate will most likely be understated once supplementals are known and included for both years.

Supplementals should be included when they are known for both years. For example, FY07 and FY08 supplementals are known so it makes sense to include those.

A recent report by the Tax Foundation puts Utah in the top 20 states in terms of friendly business tax climate.  That is down from #15 in 2007.  Perhaps the best news is that Utah ranks #5 in terms of the corporate tax rate index.  More than any “corporate welfare” program or the investment boondogle that is the Utah Fund of Funds, a healthy tax climate will attract business.  In addition an environmental policy that emphasizes conservation versus a strict “preservationist” or land lock up mentality will create an attractive environment for business and manufacturing to come to the state.

The one downside of the report is Utah’s ranking 30th as it pertains to personal income tax.  This is after the record tax reductions over the past couple of years.  In 2004, Utah was ranked 42nd, so we are seeing some improvement.  Unless Utah keeps moving up in the personal income tax area, the great corporate environment we’ve created may be wasted, because who wants to work in an area with high property taxes and high personal income tax.  Companies will have to offer higher salaries or find ways to locate employees elsewhere.  I saw this happen firsthand in Ohio.  The tax burden was so ridiculous that business looked for ways to locate facilities in unincorprated areas so employees could avoid city or county personal income taxes.  So Utah needs to work on both ends, not just on corporate tax breaks.

You may remember how GE and other fluorescent bulb makers lobbied successfully to force consumers to switch to their earth-saving bulbs.  Well, now the EPA has come out revising their recommendations for where homeowners should use the bulbs, because mercury levels in the bulbs could put your little ones at risk if they break the bulb and are exposed to the mercury in the bulb.  (There’s a story about this report on www.thebostonchannel.com)

I don’t know about you, but I get the sick feeling that energy saving bulbs, ethanol and the rest of the long list of earth saving technologies are actually going to do more damage than produce any carbon offset.  It’s what we deserve when we allow bad science and a big government approach to helping us be good stewards over our private property and natural resources.

Here is a link to an OpEd written by my co-worker, Derek Monson, here at Sutherland: http://www.heraldextra.com/content/view/256596/58/.

I am hopeful that this legislation not only passes, but gets funded. 

“Good law is that which binds the conscience.”

Here’s a link that gives a nice quick overview of what the Grace Commission found about taxation and governement spending.

http://www.freecanadian.net/articles/grace.html

This is a follow-up on the $55 dollar tow job post.

It is always great to listen to really smart people.  Sometimes when you get into the grind at work, you forget how good it feels to stretch the mind.  I think it’s one of the things I miss most about MBA school, that being bombarded with new ideas and new concepts.

Anyway, Ed Feulner, a co-founder and current president of Heritage Foundation, spoke at Sutherland Institute today.  The guy is amazing in his ability to absorb information.  He was in AZ yesterday speaking to a group, and tomorrow he heads to Los Angeles to make another speech tomorrow, and yet he was completely up to speed on what Sutherland was engaged in and knew all those involved with the institute.

With respect to his remarks, I think the one that stuck out the most was the need for “intermediate” institutions to help foster civil society: family, church, schools, and of course my favorite, local policy organizations.  Our recent trend in Utah and across the nation is to weaken these intermediate institutions and solely rely on the state, which ultimately give us the all the bad government we deserve.  Let’s push our legislators and local elected officials to push legislation that puts decision making back in the hands of “we the people” and our intermediate institutions.

Okay, now that I’ve complained about the sad state of the UTA, my next question to myself is, “Fine, Lyall, what do you propose?  It does little good to be an armchair quarterback.” 

With that in mind, I look to principles of good government.  I am not arguing that public transportation does not have a role, but why do we assume that the state government should run the program.  Why not open up the system to the private sector to compete over transportation alongside the UTA?  The UTA, based on the audit, is obviously showing signs of a monopoly.  Prices are going up, service is going down, and a constant stream of red flowing from their balance sheet.

I think we could learn a lot from Indianapolis while under the leadership of Mayor Stephen Goldsmith.  In his book, “The Twenty-first Century City,” he speaks about meaningful ways to introduce competition and thus innovation in to services that local and state governments have performed over the past 50 years.  It is interesting to note that not all of Goldsmith’s city services ended up in the hands of the “private” sector.  He makes an important distinction that privatization is not the end goal.  A private monopoly is just as bad as a public monopoly.  Competition is the key.  It’s time to let the UTA compete with the local entrepreneur to deliver a service that for many of our neighbors in need is a key service.

Final Low Lights:

(4) Subsidized Total Cost per Passenger Boarding

• Bus: 87% or $5.11
• Light Rail: 86% or $3.51
• Vanpool: 75% or $3.53
• Paratransit: 92% or $36.82

In sum, this means that the Utahns are subsidizing public transportation to the tune of $162 Million in 2006.  All this for a service that does little to relieve congestion, adds significant amounts of pollution, and lacks oversight and accountability.

Another classic quote from Joseph Story that hits the heart of powering grabbing advocates on both sides of the isle (i.e., the “WAR” on terror or the “WAR” poverty).  

It has been often said, that necessity is the plea of tyrants, but it is equally true, that it is the plea of all public bodies invested with power, where no check exists upon its exercise.

In one sentence, Story outlines the formula for power accumulation (or governmental intervetionalism, which ultimately leads to totalitarianism):  create or magnify a crisis (necessity for fixing/intervening), make it emotional so that rational thinking is easy to marginalize, and once the public is in uproar, pass legislation that increases the size and scope of government and accumulates power to the state. 

Simple and proven strategy.  Perhaps next time we here of the next “WAR” on anything we would do well to ask if by adopting the “solution” of the advocate do I gain freedom or surrender it.