I take the Salt Lake City Tribune, and I’ve been following this news of budget cuts to cover our state’s shortfall. Notably (and not particularly surprising here in Utah), public education is getting the ax. Republicans in the legislature want to cut overall state funding by 15% — a large part of it will be higher education. (That’s quite a bit — especially considering the programs we all know Utah GOP is most likely to deny). Normally, I’d be all for this show of frugality, but the truth is that it’s kind of silly, considering that Utah has a very nice Rainy Day Fund — with $414 million. Additionally, there’s a pretty well funded (nearly $1 billion) in the trust that helps fund education. The Republican lawmakers in the great state of Utah apparently think that the economic tsunami we are facing doesn’t warrant rainy day funds.
This has me puzzled.
We have an emergency fund here at home. When one of my clients is late paying me, or if Josh ends up taking sick days and doesn’t get his hours in, or if some big unexpected repair needs to be made, we dip into the emergency fund. This bridges the gap. When our finances return to normal, we build the fund back up. It’s what makes sense in personal finances — and it’s what makes sense for state finances.
The Democrats in the legislature and the Republican governor want to cut some spending as well (by 7%) and then cover the rest of shortfall with the Rainy Day Fund. This makes sense. It emphasizes frugality while at the same time not being so frugal that it jeopardizes some of our priorities down the road. Unfortunately, the super majority the GOP enjoys in the legislature means that the imprudent course will likely be followed in this matter.
There’s nothing wrong with using the Rainy Day Fund. It’s what it’s there for.