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Dear Legislator,
 
In response to Tuesday's announcement of a May 6 veto override session, I write to share some thoughts regarding the bills I vetoed and share developments since the end of March.
 
Please know I appreciate your service to the State of Utah, as well as your role in determining public policy.  Furthermore, I understand the plethora of issues you address during a short 45-day general legislative session.  All things considered, Utah does a remarkable job of remaining fiscally prudent and forward-looking - particularly in the current economic climate, and despite the challenging policy issues of our day.
 
I also appreciate your hard work in passing over 500 bills in 2011, the vast majority of which I supported. After careful review and analysis, I chose to veto only four of them. Each veto was based on principle and policy, not politics or personalities.
 
I understand that when you convene, your primary consideration will be SB 229, so I offer some thoughts on that bill for your consideration.  I've also included a brief status update on the other three bills on the call.
 
SB229 - Transportation Funding Revisions
 
First, let me be clear-I have always been and will continue to be a strong supporter of transportation funding and its meaningful economic benefit. This veto was about balancing priorities.  My veto of the bill has nothing to do with a gas tax. I reiterate what I have said before: I do not support a tax increase in this recovering economy. We must make do with what we have.
 
I vetoed SB229 for the following reasons:


        
  • Earmarking one out of every four dollars-for any budget line item-is the wrong policy.

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  • SB229 goes too far and potentially risks the State's ability to meet other critical needs.   Maintaining the responsible fiscal prudence for which Utah is acclaimed includes protecting budget flexibility.

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  • Transportation funding is not presently at risk.  Utah has a record $3.8 billion committed to existing transportation projects.  Through the year 2020, with all funding sources combined, UDOT will receive around $1 billion annually. These monies are obligated, and I support that.

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  • This bill moves from funding transportation from the general fund at a base of $295 million annually and increases funding to approximately $500 million per year as the economy grows.  No other area in the budget is programmed to grow at that rate. 

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  • Future legislatures will right-size transportation funding based on the circumstances they will face, just as you have done.  Committing revenues, even with a cap, risks subsequent increased bonding, jeopardizes Utah's AAA bond rating, and exacerbates a lack of budgetary flexibility. Once bonded against, this funding will be unavailable, mooting any potential flexibility.

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Let's remember recent history. When we embarked on the construction of Utah County's I-15 reconstruction project, the Governor and the Legislature clearly understood that committing $1.7 billion (by far the largest transportation project we've ever undertaken) would use up the bulk our transportation dollars for the next few years, especially because we bonded for that project.  That was the understanding based on conditions at the time, and nothing has changed.
 
In household terms, Utah should not purchase an upgraded car when we have already maxed our mortgage potential, dipped well into the home equity line with current bonding levels, and have a growing number of kids to put through college. Again, this veto is about balancing priorities.  I cannot support increasing that percentage of the total overall budget right now and tilting it away from critical needs, such as education.  No one can predict what the next decade holds, but responsible stewardship means that we will ensure future leaders have as many tools as possible to tackle the issues they will face.
 
The use of earmarks is what has led California to the unenviable position in which the Legislature controls only 15% of the state budget.  We are all aware of California's current budget woes and their inability to find solutions to those problems.  We simply do not want to go down that path.
 
Bottom line: SB229 creates NOT ONE NEW DOLLAR of funding. It simply creates a super-priority for transportation. Economic tides can turn quickly and the State of Utah must be fiscally agile to safeguard both our priorities and our resources.
 
SB 294 - Patient Access Reform
 
Our office has worked with House sponsor, Representative Jim Dunnigan, and agreed to include this item on a call for a Special Session (which will be called as soon as is practicable) to address my concerns and satisfy the sponsor's objectives.
 
Specifically, the insurance premium rating changes envisaged by SB 294 would take effect no sooner than January 1, 2012.  This will allow sufficient time for the Office of Consumer Health Services and its private sector contractors to make the necessary technical and operational adjustments to the Utah Health Exchange.  Further, the $55,000 necessary to fully implement the technical and operational adjustments will be appropriated.
 
SB 305 - Economic Development through Education
 
The intent of SB 305 aligns with a key objective of my Education Excellence Commission, which is to better align education with future employer and industry workforce needs.  However, SB 305 contained provisions which created constitutional separation of powers issues.  I have prepared an executive order which will allow state agencies to continue to foster this collaboration to enhance existing objectives and achieve the intent of SB 305. The executive order will add four business representatives to the Utah Futures Steering Committee and will allow for legislative input in a fashion that does not violate constitutional principles.
 
HB 328 - State Government Work Week
 
Working with the bill sponsor, Representative Mike Noel, as well as agency leaders, we have explored ways to keep extended hours Monday through Thursday, while making critical services available Friday.  The State has made great strides providing services online and has opened physical offices Fridays where there is need, such as Department of Motor Vehicles and the Driver License Division.  To ensure the people of Utah can obtain critical services on Fridays, I issued an Executive Order mandating that by October 1, 2011, all state agencies will ensure critical, public-facing services will be available Fridays, either in person, online, or with telephone support.
 
Thank you for your time and consideration. And, again, thank you for your service, both to your constituents and to the State.  I truly believe in the value of public exchange and participation in the political process. I am honored to serve with you in this wonderful state as we address the issues of the day.
 
Please feel free to contact me, or my staff, if you have further questions or need additional analysis.
 
My deepest regards,
Gary R. Herbert
Governor

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