What’s the political impact of the state budget collapse?

Ouch! Legislative and executive branch fiscal analysts last week predicted a major hit to the state budget as a result of the COVID-19 pandemic. We knew it would happen — but it still hurts. Obviously, this is an indication of an economy in free-fall. The question is not if, but how, these challenges impact politics.

Lawmakers will meet after Memorial Day to review budget cut options of 2%, 5% and 10%. These recommendations will be finalized in a June special session after new revenue collection numbers are reported. All of this is occurring at the height of a campaign season and on the eve of the primary election. This is unprecedented in modern history. How do gubernatorial and legislative candidates respond? Who is advantaged or disadvantaged?

Pignanelli: “Here’s what I know about political campaigns: No matter what you map out at the beginning, it’s always different at the end.” — Chris Christie

All politicians venture through an obstacle course when campaigning. But a pandemic budget creates a new feature resembling a minefield as all Utahns will feel the pain. Weaving between the current emotional issues requires extreme dexterity to avoid a misstep. Thus, candidates cannot just broadcast ideological pablum as voters will demand a substantive response to the dilemma.

Candidates need a working knowledge of the budget to craft a message demonstrating their competency. Campaigns will be inundated with inquiries regarding their position on specific funding, plans to reinvigorate the economy and views on social distancing. Because much of the electioneering will be through social media, no one can hide.

Politicians who construct a plan with specifics, sensitivities and accountabilities cleverly marketed through traditional and new media will have an advantage.

Remember, the best route through a minefield is a map.

Webb: While it is unfair to blame the impact of a fast-moving international crisis on local politicians, some candidates will certainly try to exploit the situation. Whether they will be successful depends on the good sense of voters.

It’s likely that never in Utah history has state government been clobbered with a budget decline so big and so fast. Local governments face the same revenue collapse. But voters aren’t nearly as worried about government finances as they are about their own finances. Tens of thousands of Utahns are reeling under the economic shutdown.

While Utah political leaders didn’t cause the crisis, it is fair, of course, to judge their response. But it’s hard to be too critical because state leaders have been fast and forthright, making pretty good decisions on the fly with limited information and no precedent — balancing health concerns against economic concerns.

In hindsight, there will be plenty to quibble about. But critics should be asked, “What would you have done at that point in time with the information available and in the context of national and international conditions?”

The state’s actions have been measured and based on available data. The results have been quite good compared to many other states. Utah is opening back up and the virus is generally under control.

What happens politically will depend on the mood of voters come November — will they feel the government-forced economic crisis was worse than the health crisis? If so, fair or not, they might take frustrations out on those who made the decisions.

Will the election alter budget deliberations? Will the pandemic change traditional fiscal procedures?

Pignanelli: Special interest organizations will argue, with some legitimacy, their constituents should not endure the same level of budget reductions as other programs. Advocates for the impoverished, disabled and Medicaid will contend the pandemic especially reaffirms a need for adequate resources. Although the budget will be determined in a special session(s), candidates should expect that the battle over funding for many items will occur on the campaign trail.

Also, the pandemic will likely alter the process and the details in the budget. Normally, deliberations during the legislative session shield against too many external pressures. But a special session (or sessions) during the campaign offers no such protection.

Webb: The crisis affirms the wisdom of many years of conservative budgeting, socking away money in reserves, and restraining the growth of government. Frugality pays off. Unlike the feds, Utah lawmakers can’t print money or run up huge debts.

The fiscal analyst did reveal some silver linings. As has been recognized in the national media, Utah is well prepared to absorb these blows and flourish in a post-pandemic world. Why is that?

Pignanelli: As a lawmaker and lobbyist, I witnessed the careful and usually painful deliberations conducted by legislators of both parties to construct a well-managed state government structure. They received very little credit other than national organizations frequently complimenting Utah for such quality governance. Bottom line, it is a testimony to our incredible culture.

Webb: Utah has wisely spent billions of dollars in cash for needed buildings and highways. It can now bond for those capital projects at very low rates and free up sales tax money for necessary state services. With some $5.4 billion in reserves of some sort, the state has flexibility. But it would be a mistake to quickly deplete reserves. This crisis may last a long time and may get worse.