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Huntsman: Plenty of Political Capital to Spend
Emerging from his first legislative session riding sky-high in the polls (See Saturday Morning News story) Gov. Jon Huntsman has an opportunity to preside over a golden era in Utah politics. The economy has shaken off the slump of the last few years and is booming. Even better, today’s economy has a solid foundation of profits and productivity. It’s not based on the phony dot-com bubble of the roaring ‘90s. Today’s high-valued businesses are actually making profits. Valuations, for the most part, are based on reality, not “irrational exuberance.” Some economists are calling this the “Goldilocks economy” – not too hot, not too cold; just right.
So job growth is strong, tax revenues are ballooning and people are happy. The temptation in the governor’s office would be to turn on the cruise control and enjoy the ride. It would be easy to say, with such strong tax revenue growth, who needs tax reform? Or, hey, the economy is strong. Why push economic development? That sort of attitude would be unfortunate, obviously, and I don’t think Huntsman has any intention of taking the easy route.
With an 80% job approval rating, Huntsman has plenty of political capital to spend. The big issues he has vowed to tackle are economic development, transportation and tax reform. The three issues are really tied together. Certainly, the state ought to be out chasing new business and supporting existing businesses. But the most fundamental and important things the governor could do for economic development would be to implement a modern, broad-based tax system with low rates, and keep commerce flowing through a mobility system that allows people and goods to get where they need to go without congestion and delays. A third element of economic development would be an investment in research and development so Utah can take advantage of new technologies and whole new industries that will develop out of advanced R&D.
The great thing about tax surpluses is that they can lubricate the implementation of tax reform and transportation financing so fundamental improvements can be made without an overall tax increase.
For example, the gas tax could be boosted or replaced with a sales tax on gas, providing a long-term, stable source of transportation funding, while lowering other taxes so overall tax revenues don’t increase. The same could be done with expanding the sales tax to services. The sales tax could be significantly broadened, but the overall rate cut to produce even a small tax reduction.
Those will be difficult decisions even with extra revenue and certain groups will scream bloody murder. Huntsman’s political capital will take a hit. But the time to take action to position Utah for an even more prosperous future is now. Happy days may be here, but it’s no time to coast. Huntsman has the opportunity to use some political capital in fighting the good fight and emerge stronger than ever.
Don’t Kill the Goose
The Salt Lake Tribune published a nice package of stories on Sunday (see links on the right) outlining the state’s dilemma on Medicaid funding. While Utah’s situation is not nearly so dire as in many other states, federal funding for the program is going to slow, and Utah faces some tough choices on who gets services and what level of services they get. Medicaid is clearly a program out of control and costs must be reined in.
The harsh reality is that there are unlimited needs and good causes out there on which our tax dollars could be spent. But the line has to be drawn somewhere and that means some deserving people and deserving causes won’t receive funding or services. It’s easy to say, “There should be funding for just this one more program,” but there are dozens of “one more programs” and if we go down that path very far we ultimately hurt the productive, tax-generating side of society. If we kill the goose we don’t get the golden eggs.
All in all, our state elected and appointed officials do a pretty good job of drawing the line in a fair manner. At the federal level, much more discipline is needed to hold down soaring federal deficits. Federal spending is likely to be a big issue in the 2006 and 2008 elections, and Republicans have some vulnerability on the issue. It’s interesting that it is Democratic Rep. Jim Matheson who is writing op-ed pieces on the dangers of deficit spending and not a Republican. Said Matheson: “I believe it is immoral to continue spending like drunken sailors with no plan on how Congress is to dig out of this deficit hole.”
Utah NCLB Stance Gets National Notice
The Federalist Patriot, a conservative e-newsletter with wide distribution, recently published this item:
“. . . as The Patriot recently reported, the Utah state legislature has been on the verge of repudiating the No Child Left Behind Act. In the name of state and local control, Utah was willing to forego $116 million in federal aid. The effort unanimously passed the State House and had sufficient votes to pass the Senate. But at the request of the White House, Utah's Republican governor has managed to postpone the Senate's vote. ‘We must go forward, but out of respect for President Bush and our governor, we are going to give another month for negotiation,’ state Rep. Margaret Dayton said. We share Mrs. Dayton's respect for President Bush, but our highest respect is for the Constitution, which gives no place to federal control of education. It is absolutely essential that the states prove themselves willing to give up federal funding in the name of federalism. Here, we would urge Utah not to cave to pressure from Washington.”
Political Trivia
Important Political Dates in March
March 8: The U.S. Senate votes to limit filibusters by adopting the cloture rule (1917).
March 12: FDR delivers the first radio “fireside chat” on the banking crisis (1933).
March 13: “Uncle Sam” makes his debut as a cartoon character in the New York Lantern (1852).
March 15: The U.S. House of Representatives begins a 90-day test to determine the feasibility of showing its sessions on TV (1977).
March 19: Nevada legalizes gambling (1931)
(Source: National Journal Political Calendar)
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