Financial Ready Utah, a non-profit organization led by the Utah Association of CPAs, announced an initiative designed to create a Utah plan for a fiscally sustainable future.
The CPA’s are working with chambers of commerce, top civic and community leaders, the League of Cities and Towns and other groups to help families, businesses and communities prepare for the “financial earthquakes “that will occur when federal funding is eventually reduced.
Utah is extremely vulnerable to federal spending reductions since 40% of state spending comes from the federal government. Should the federal government reduce spending in order to control its huge debt, it will have a major impact on a wide range of Utah programs such as Medicaid, the National Guard, Hill Air Force Base, transportation, and public education.
Legislators are sponsoring a variety of bills presented by Financial Ready Utah ranging from the creation of a Federal Funds Commission to a seven percent increase in the percentage of the excess fund balance that a municipality may keep in its general fund (from 18% to 25%).
A press conference formally announcing the program featured Republican legislators. Democrat Senator Pat Jones stood at the back of the room among the general public listening to the presentations. When asked about the initiative, Senator Jones said that it was a good idea and “that both the federal and state governments have to be responsible.”
The press conference would have been more remarkable had there been Democrats, Libertarians and Constitution party leaders standing with the Republicans and the bills presented would have been better had input been solicited from a wider range of civil society groups.
For example, had the bill increasing municipal reserve funds (SB158) been vetted with citizen groups focusing on local government corruption and mismanagement, the bill may have never been brought forward or, if brought forward, it would have included additional safeguards to ensure that the authorized increase in reserve funds do not lead to tax increases and/or to the misuse of the funds.
If this ambitious initiative is to generate a broad consensus and to find truly innovated solutions, a substantial number of “average” citizens must have a seat at the table where decisions are made and all of Utah’s political parties must be involved. In addition, a diversity of opinions from the Tea Party on the right to Occupy on the left should be fostered and encouraged in order to avoid Groupthink. Just “rounding up the usual suspects” to sit on commissions and make policy recommendations will not be adequate.
Finally, those involved in this process will have to identify both the seen and unseen consequences of their policy recommendations as explained by Frederic Bastiat in That Which is Seen, and That Which is Not Seen and by Henry Hazlett in Economics in One Lesson.