Some Utahns may be tempted to wonder “who are these guys” – as the Sundance Kid was want to ask – when considering the competence of state legislators.
But if in doubt, just see how smart some of these guys were in figuring out how to buy $30 million worth of new roads next year without bonding.
And through this financial juggling, legislative bosses allowed conservative GOP lawmakers to truthfully tell debt-worrying rank-and-file Republicans next week in the party caucuses that the state’s borrowing level is falling, rather than rising.
HB173, what started out as a $150 million road bond, loaded with “Christmas tree” projects, was passed Thursday before adjournment with Senate and House GOP leaders hugging and praising each other.
This great gladness came just a few days after Senate Republicans were chanting “no bond, no bond, no bond” and House Republicans were threatening a major dust up if the road bill didn’t pass the upper body.
In the end, some fancy financing was put into HB173. Yet, still, all of the road projects in the original bill stayed and will be built on time.
How did this happen?
Well, when pressed up against the 45-day session wall, you put your heads together and figure out a way for the Utah Department of Transportation to “borrow” $30 million from itself, start two dozen road projects in fiscal 2013, then bond for $100 million in fiscal 2014 to finish up the work.
And what appeared to be a real Mexican standoff – political guns drawn between the House and Senate GOP leaders – melts away into handshakes and congratulations as the final day of the 2012 Legislature wound down.
Ain’t democracy wonderful?
The ultimate compromises didn’t come without some worries, however.
Sen. Stuart Adams, R-Layton, a former chairman of the UDOT citizen commission, had to agree that his pet project road funding pot (which was adopted last year over a veto of GOP Gov. Gary Herbert) would be “raided” for just one year.
Thus, the financing in HB173 sets up what could become, down the road (pun intended), a troubling precedent.
Adams gulped and agreed.
Thirty million dollars will be “borrowed” from a special sales tax-generated pot of money to avoid issuing any new state debt in 2013, with a promise that money taken from the fund will be replaced in 2014 when the Legislature does issue a road bond.
(Now, technically, one Legislature can’t force a future Legislature to do something. But there are exceptions for repaying bonds, or in this case repaying a fund with a bond.)
Not issuing any new debt in 2013, along with some old bonds being paid off and a rising housing market driving increased real estate values, will allow the 91 percent of the state indebtedness level to drop to 85 percent – a level House Republicans promised at the first of this session would be achieved.
Still, not everyone was satisfied.
Senate Budget Chair Lyle Hillyard, R-Logan, who doggedly pushed the “no bond” position, said he’s still worried about the process of legislators (with the help of some well-connected local government lobbyists) deciding which road projects will be built.
The state’s Building Board was formed to take log-rolling politics out of deciding which new state buildings to construct, while the Transportation Commission was created to do the same thing about roads.
“We are now setting up transportation priorities,” said Hillyard, who voted no on HB173.
The Transportation Commission only prioritizes state roads. HB173 is stuffed with local road construction.
Legislators, said Hillyard, shouldn’t be deciding what new roads to build; that opens up high-stakes politicking in local road work ahead.
“This was a tough bill to get passed,” said Senate Majority Leader Scott Jenkins, R-Plain City. “Both sides” – the House and the Senate – “came a long way to get together.”
The smart financing and the give and take, said Jenkins, will benefit cooperative work in the Legislature well beyond just building roads.
Meanwhile, HB173 shows city and county officials that there is a new route to paving heaven: Hire some good lobbyists and work for several months to put together enough needed road projects in enough geographic regions to garner 38 votes in the House and 15 in the Senate.
Hillyard’s objections about legislators deciding which local roads should be built rings hollow, say some of the lobbyists who worked on HB173, because of a long-standing “road grab” by lawmakers themselves.
UtahPolicy has written several stories about the politics of HB173.
But when it comes down to it, HB173 supporters argue, the Legislature has been raiding a special fund fueled by the old “quarter-of-a-quarter” local option sales tax for some time.
That “quarter-of-a-quarter” sales tax was imposed by local governments to raise money for big, local road projects.
To leverage those sales tax receipts, bonds would be issued – and those bonds were to be issued by the Legislature.
Well known for their sticky financial fingers, legislators started using that local road fund to pay for state-owned roads. Yes, some of those roads were in local jurisdictions that were imposing the option sales tax.
But some state roads weren’t.
Lawmakers told local officials that they were still getting some roads in their areas built.
“But it’s time some of that local tax was reclaimed” for city and county roads, said former Utah House Speaker turned lobbyist Greg Curtis, who worked on HB173 for his local government clients.
In fact, a UDOT-generated accounting of the “quarter-of-a-quarter” locally-taxed fund shows that in recent years lawmakers built $228 million worth of state roads with the “quarter-of-a-quarter” tax collections while only $53 million worth of local roads were constructed.
So, with HB173 the state is on the way to buying $150 million in new roads.