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Governor Questioned on HB213
I attended Gov. Huntsman’s keynote at BYU’s eBusiness Day today. It was a well-given and interesting talk about economic development. He took questions and the very last question was from a young guy (22?) sitting right next to me who asked about why Huntsman had signed HB213. If you remember, HB213 is the controversial bill that changed how employees can exchange unused sick leave when they retire. The Governor’s answer was instructive.
In the private sector, employees lose sick days after a certain period of time (if they have them at all) because accounting rules require that you treat them as a debt. This is really bad for balance sheets. There are a similar, but different, set of rules for how governments do accounting. This kind of requirement was just added to those rules. By 2007, governments will have to start setting aside money to fund these promises, or face having their bond rating lowered since the obligation would be counted as an unsecured debt.
So, keeping the program going forward would have been a big hit on the budget either way. If you have to start setting aside money, the money will have to come out of currently funded activities. Is anyone willing to take a paycut or layoff employees to keep their retirement helth benefit? I thought not. If you don’t fund it and your bond rating gets slashed, the State pays higher interest on its debt with a similar outcome.
So, the question I have for people who didn’t like HB213 is “what’s your solution?” Doing nothing clearly isn’t an option. It seems that people are quick to say they don’t like HB213, but I haven’t heard any viable alternatives. If it was your job to write HB213 and you had to solve the problem what would you have done?
Posted by windley on March 31, 2005 05:37 PM
