Utah Highly Dependent Upon Federal Funds

A newly released audit for the state of Utah reveals that the government relies upon federal funds for well over a third of its budget. According to state auditor John Dougall, “Utah continues to have a heavy dependence on federal financial assistance, which amounted to $4.5 billion in federal expenditures and $2.2 billion in endowments, loans and loan guarantees for the fiscal year ended June 30, 2013.”

As reported earlier this year, a 2011 financial report produced by the federal government states that “there is little question that current fiscal policies cannot be sustained indefinitely.” The Comptroller General similarly said in the report that “the current structure of the federal budget is unsustainable over the longer term.”

A report written last year (PDF) by a firm of accountants studying the fiscal dependence of the various states placed Utah 14th out of the 50 states in terms of reliance upon federal dollars, with 45.3% of total state revenues coming from the federal government—more than such “big government” states as New York and California.

Despite repeated testimony from informed financial experts that this cannot continue for long, others object to changing the status quo. University of Utah political science professor Matthew Burbank told KSL, “I honestly don’t see what the alternative would be. We would lose jobs. We would lose all kinds of services if we didn’t have access to federal money. There’s no question we would be worse off.”

There is truth in Burbank’s objection; a reduction in federal funds would require a reduction in government services and benefits—putting a financial pinch on those who have allowed themselves to rely upon this revenue for too long. Still, most would suggest that it is better to have a managed withdrawal off of this “drug” than to be forced to go cold turkey through collapse of the dollar, more government shutdowns, or other budgetary chaos that states like Utah will increasingly face.

Ultimately, this entire situation stems from an institutionalized violation of the proper role of government. A people who want the government to be and do all things cannot be too surprised when such largess is mismanaged and abused—and exhausted. Only an elimination of several programs, benefits, and government agencies will curb the appetite for tax dollars and restore some semblance of sanity to government budgets. Unless and until that happens, governments around the country will continue to inch closer to the looming fiscal cliff.