Jon M. Huntsman School of Business

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Thursday, December 5, 2013

Governor’s New Budget Outlook: Addressing Lingering Problems Through Taxation Isn’t a Move to the Dark Side



By Rhett Wilkinson

“Do what must be done.” – Chancellor Palpatine (Darth Sidious) to Anakin Skywalker (Darth Vader)
That was the instruction the Sith Lord gave to his new apprentice. Palpatine took advantage of Anakin’s desperation for the powers of the dark side.

Raising taxes may not be an act of the dark side. But sometimes, I believe they are a necessary evil. At times, elected officials should “do what must be done,” and call for new revenue through higher taxes. 

Rhett Wilkinson says more money should be budgeted for education.

I think that’s the reality in Utah for education and roads. That was clear after Nov. 25, when Utah Governor Gary Herbert forecasted the state’s budget for fiscal year 2014-2015. He declared no new taxes for the time frame. 

As a member of the Finance and Economics Club at the Jon M. Huntsman School of Business, I take great interest in the governor’s outlook. 

Education spending is still an emphasis, Executive Director for the Utah Department of Workforce Services Kristen Cox told the Deseret News. I believe Gov. Herbert largely seems to reflect that this year, having committed $60 million in this year’s budget to education due to an anticipated 10,500 increase in student enrollment. 

Also, House Speaker Becky Lockhart told The Salt Lake Tribune that paying for the education growth will again be a top priority.

"That’s one of the things we look at very first," she was quoted as saying. “We’ll be looking at that right away.”  

The rankings show me that the governor’s pulling from the state reservoir isn’t enough, and that Speaker Lockhart’s words aren’t convincing. This year, Utah remained 51st – dead last – among the 50 states and the District of Columbia in per-pupil spending. The Beehive State won’t be near the middle, or higher, since it routinely ranks at or near the top in class sizes. But in a state and legislature where the majority says it believes “the glory of God is intelligence,” among other reasons, it undoubtedly should do better than dead last.  

Gov. Herbert is promoting an initiative to raise the percentage of Utahns with college degrees, or certificates, to 66% by 2020. But, I believe that focuses attention at the wrong end of the education channel. Investing in early-childhood education would encourage more long-lasting results, rather than trying to make up for pre-elementary school shortcomings after high school. By then, one-quarter of Utah kids have already dropped out.
It has been reported that the state allocates effectively 25% of sales tax collections to roads. But, money must be found at some point to account for what will be an $11 billion deficit in roads funding by 2040. I think it makes sense to increase the gas tax. That has not been raised since 1997.
The Salt Lake Chamber of Commerce endorses the measure. It has indicated that it’s a good option, because then, those people who are actually using the roads are the ones who pay.
Senate President Wayne Niederhauser is a solid Republican, but he acknowledged the dilemma: “We need to look at ways to either cut the cost of roads, or you are going to have to have some additional revenue in the future,” he told the Deseret News.
Ultimately, the problem is that politics might get in the way. In the election year that is 2014, I believe most lawmakers may not consider tax increases. Both Speaker Lockhart and Pres. Niederhauser acknowledged the same to the Deseret News.
I think it’s disappointing that the legislature would shy away from helping children, and assuring safe and efficient transportation, at the expense of maintaining power.
It is time to “do what must be done”—but in this case, by forgetting power, as opposed to the desires of Sith Lords in a galaxy far, far away.

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