Federal budget deal has Utahns bracing for cuts

SALT LAKE CITY – The last-minute compromise to cut federal spending $2.1 trillion over the next decade likely means less money to pay for everything from Utah's public transit projects to state workers' salaries.

Potential impact on UTA

"We've all got our fingers crossed," said Utah Transit Authority spokesman Gerry Carpenter. "We'll just have to wait and see."

Few details were available Monday about the specifics of the cuts agreed to by congressional leaders and President Barack Obama over the weekend, leaving Utahns wondering what the reductions will mean to them.

Potentially at risk is the nearly $104 million in federal matching funds the authority is counting on to extend TRAX to Draper, a project that's already underway with a hoped-for 2013 completion date.

That's because the debate over raising the nation's debt ceiling came before UTA had a signed agreement for the federal portion of the $193 million project, one of just three public transit projects in the president's budget.

And there's also concern that more than $130 million in federal payments owed on the new Mid-Jordan TRAX line and Frontrunner service to Ogden could be delayed as a result of the deal, as well as other funds used for bus services.

Losing federal funds, Carpenter said, "would affect our ability to maintain our current levels of service." He said while projects probably wouldn't be halted, it's not clear how or when they could be completed.

Implications for public employees

Meanwhile, leaders of the Utah Public Employees Association aren't sure what to tell the nearly 21,000 state workers, including some 4,500 who depend on federal funds for at least half of their salaries.

"I hate to say it, but nobody's optimistic this is going to benefit public employees," UPEA employee representative Todd Sutton said. "We're always fearful of the belt-tightening that's going on."

The state's largest federal employer, Hill Air Force Base, released a statement saying the commander-in-chief has made it clear "there is no alternative to raising the debt limit" and expects a resolution that will "avoid any disruption in government operations or payments."

What will the state do?

Gov. Gary Herbert's budget director, Ron Bigelow, said the state has already been preparing for reductions in federal funds, but he, too, is waiting to see what effect the debt-reduction deal will have on Utah spending.

State agencies are already required to halt spending for programs paid for with federal funds if that funding ends. And a new state law requires agencies to have contingency plans in place by October for reductions in federal funding.

Bigelow said the state expects a surplus from the budget year that ended June 30 on the "high side" of an earlier estimate of between $10 million and $110 million. Plus the state has a $200 million Rainy Day fund.

Still, he said, it would be up to lawmakers to decide whether to restore any federal cuts to the state budget, either in a special session or during the 2012 Legislature.

"A lot of people would like the state to step in and solve every problem. But, of course, we don't because we also have an obligation to the taxpayer," he said. "We can't keep going to people who are just barely getting by and say, 'Pay more taxes.'"

Rep. Ken Ivory, R-West Jordan, the sponsor of the legislation requiring contingency plans for the loss of federal revenue, said lawmakers will be "boring and prudent" in dealing with any federal cuts.

"We're still going to take care of our poor people in Utah. We're still going to take care of our roads. We're still going to educate our children," Ivory said. "That's just Utah values. That's just who we are. That's just what we do."

Written byLisa Riley Roche with contributions from Jed Boal and Marjorie Cortez.

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