Utah legislators have long known the benefits of forward thinking. After the “Dot-com” bust of the early 2000s, they developed tools like temporal balance and the working rainy-day fund to assure the state could weather the next recession. They were the first in the nation to implement evidence-based rainy-day policy in 2008. In the 2018 General Session, they took yet another step toward improved long-term fiscal health.
2018 House Bill 452 – innocuously titled “Legislative Fiscal Analyst Amendments” – formally broadens Utah’s financial planning outlook from one and two year budget and political cycles to ten and fifteen year business cycles. It establishes a regular three-year schedule on which the Legislature and its staff will contemplate the future. In year one, legislators will review revenue trends and volatility. In year two, they’ll consider long-term budgets. In year three, staff will combine steps one and two and subject them to alternative economic scenarios to measure potential risk.
While U.S. News and World Report ranks Utah as first in the nation for combined short- and long-term fiscal stability, we’re nineteenth for long-term fiscal management alone. This new law will help shore-up that long-term thinking. It has already been recognized by the Volcker Alliance and Pew Charitable Trusts. More importantly, it embodies Utah’s tradition of planning for the worst, but hoping for the best!