The 2013 Real State of the State
The hallmark of any good politician (which is not something to which one should aspire) is the ability to take credit for successes not of your making, and deflect accountability and responsibility for problems of your doing. It is a skill endemic to the political class generally, and rarely are people with significant power immune to it.
The fruits of this skill were visible in last night’s State of the State address by Governor Herbert and in past speeches and statements he has made. The existence of this trait does not necessarily mean that Herbert is immoral, incompetent, or ignorant; he is certainly not alone in exhibiting this trait. Really, Herbert’s taking partial credit for Utah’s greatness and sidestepping Utah’s problems says much less about Herbert than it does about the rest of us—those who buy into the flowery rhetoric and sound bytes without challenging claims and pressing for more substance.
We are often told how great Utah is—that it is the best managed state, that businesses are flocking to our state with jobs, that low taxes and regulations earn the state one accolade after another. And while outside organizations do offer their praise, many of the successes with which politicians pad their campaign mailers come not because of government involvement, but in spite of it. Many of these benchmarks do not indicate how well the government is doing, but rather how well private industry and society are faring despite the state.
Last night’s address painted a picture of a mythical Utah. Those who wish to truly understand the nature and condition of the state cannot be content with fairytales and incomplete descriptions. The truth is much different than what was said last night. For that reason, Libertas Institute has decided to provide Utahns with a more accurate State of the State—no rhetoric, just reality.
Don’t underestimate legislators—they can do a lot in a little amount of time. The general session of Utah’s part-time legislature meets for just 45 calendar days per year, and in that time, 104 legislators each sponsor an average of eight bills. Nearly 500 bills are passed every single year. Sometimes a bill is just tweaking existing code, but many times lengthy new paragraphs are incorporated into state law.
The laws and regulations in Utah now total 10 million words in length. This astronomical number is 13 times longer than the Holy Bible, 490 times longer than Utah’s Constitution, and over 2,000 times longer than the U.S. Constitution.
There is a perception that Utah is a limited government state comprised of self-reliant individuals. When compared to some other states this may be true, but standing alone, Utah’s government is anything but limited. We often hear complaints about how much the federal government is trying to control our lives, but the state has become a smaller version of Washington, D.C., with plenty of unnecessary, illegitimate, and interventionist laws of its own. Talk is cheap; simply claiming that limited government is important does not mean that we have it here in Utah.
Dependence upon D.C.
For all the chest-thumping you hear from Utah politicians who claim to be angry with the federal government for its overbearing mandates and unconstitutional edicts, one might expect actions to match. Instead, the government of Utah is reliant upon D.C. for nearly 1/3 of its entire budget (excluding the additional $1 billion plus in federal dollars which circumvent the state government).
This financial dependence upon another entity, even if that entity is redirecting some of Utah taxpayers’ own money, creates a precarious situation in which Utah politicians are reluctant to push back against federal encroachment too hard, or at all, for fear of losing funding. It is not uncommon to see a federal bureaucracy threaten a reduction or loss of funding to the state for non-compliance with its edicts, whether with transportation funding, Medicaid, or other tax-based revenue.
A 1987 U.S. Supreme Court ruling noted that such penalties, used to coerce a state into compliance, can “pass the point at which pressure turns into compulsion.” Such was the case with the Medicaid funding threat, leading Justice Roberts to write in his opinion for the recent “Obamacare” ruling that “the financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’—it is a gun to the head” (see page 51).
From Hill Air Force Base to UTA to municipalities eager for federal funding for infrastructure, business, and recreation projects, politicians at all levels of government are eager to provide their constituents with goodies while forcing others to foot the bill. People want stuff done, and in many cases they want their government to do it for them.
Utah, contrary to its self-reliance and limited government popular perception, has historically proven quite eager to petition the federal government for funding. Far from biting the hand that feeds them, many Utah politicians are simply all bark.
Consider Governor Herbert’s 2011 inauguration in which he declared, “As a state… we will vigorously resist the increasing burden of federal intrusion into our lives.” We are patiently awaiting an array of actions which are consistent with that verbal declaration. Thus far, the actions actually implemented demonstrate a continued and increasing reliance upon D.C.—whether with Common Core, federal gun control, economic development (source, page 3), infrastructure (page 9), agriculture (page 11), education (page 13), or social welfare (page 15).
The enlargening Nanny State
Utah has long micro-managed the availability and distribution of alcoholic beverages within the state—a clear violation of the free market and an apostasy from the proper role of government. In recent weeks, reports emerged at just how intrusive the state was enforcing the many regulations associated with this control.
Undercover agents issued nine citations to restaurants in December alone for allowing patrons to drink an alcoholic beverage before ordering a meal. This non-crime is apparently sufficient reason to fund an undetermined number of nanny state agents to patrol private businesses to ensure that consensual adults cannot contractually engage in commerce. After an uproar in response to the initial report, Lt. Troy Marx of the State Bureau of Investigation, which conducts the undercover operations, said that their agents will no longer be citing restaurants for serving alcohol to diners before they order food, as long as the customers eventually order.
“We won’t be citing a restaurant because people are drinking something while looking at a menu,” he said, but “We’ll be looking to make sure people order.” The reader can decide if this is any less nanny state-like.
The fact that agents of the state are paid to micro-manage the affairs of innocent adults who are not violating anybody’s rights shows the degree to which the nanny state has blossomed within Utah. Seatbelt laws (with attempts to make it a primary offense), prohibitions on texting while driving, attempts to ban smoking within a vehicle with children present, vice crimes, and a number of other legal prohibitions and regulatory restrictions have turned Utah into a nanny state.
People should not be protected from themselves by those who claim to represent them. Adults should be allowed to engage in whatever behavior they wish so long as it does not violate the rights of another person. A government which exists to secure individual rights does not claim the power, let alone exercise it, to prohibit people from acting in a way that a majority of politicians may happen to personally disagree with.
Permission slips and protectionism
According to the Institute for Justice’s comprehensive report on business regulations around the country, Utah is not the bastion of a free market some think it to be. Our state was ranked 13th as having the most burdensome licensing laws, and was labeled the “12th most extensively and onerously licensed state.” A concluding paragraph in their analysis highlighted some of the problems with Utah’s licensure apparatus:
While emergency medical technicians need only about one month of training, other occupations with less impact on public safety require much more, such as manicurist (70 days), massage therapist (140), skin care specialist (140), barber (233) and cosmetologist (467).
Licensure has two components which substantively infringe upon individual liberty and betray the supposed free market principles of Utah’s conservative governing officials. The first is that licensure is nothing more than a permission slip, whereby the government threatens an individual with fines or jail time—both forms of coercion—should they choose to engage in a certain occupation without the government’s approval.
This is a violation of what Thomas Jefferson considered a “first principle” of rightful government: the “guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” James Madison echoed this argument, one with which we emphatically agree:
That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations…
Politicians elected to manage the state government frequently give lip service to the free market, but rarely apply those principles in a consistent fashion. New bills are regularly proposed in the legislature which would add more licensure, such as this year’s bills to require licensure of cigarette rolling machine operators and HVAC contractors (with perhaps more bills to come as the session progresses).
This violation of the free market and an abdication of the state’s responsibility to secure it were highlighted in a federal judge’s ruling last August which rejected the state’s attempt to require a license of Jestina Clayton, a hair braider. Judge David Sam said:
The right to work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity that the Constitution was designed to protect.
The second way in which business licensure violates liberty and the free market is by introducing unfair competition by creating a system of economic protectionism. Prosperous industries with significant political connections and clout often collude with the government to introduce licensure, thereby creating a barrier to entry for future competition. This has the effect of slowing the supply of workers in that field, thereby allowing for greater profit for existing workers.
One study suggests that nationwide, occupational licensure has resulted in nearly three million fewer jobs. Because low income or low skilled workers are discouraged and/or prohibited from competing within the licensed occupation, and because existing workers can therefore maintain higher rates through reduced competition, consumers end up paying higher prices. The same study suggests that nationwide, licensure has resulted in an annual consumer cost of $203 billion.
“The dirty little secret about state licensure is that the people who lobby for it are usually the stronger competitors of those who would be licensed,” notes Jack McHugh of the Mackinac Center for Public Policy. “Their goal is not to protect the public, but instead to raise barriers to new competitors who might cut prices and lower profits.”
Politicians throughout the state claim to champion the free market as an ideal, but often fail in practice to reduce or repeal existing barriers and prevent new ones from being implemented.
Utah is recognized for its low taxes and debt, but it is not at all debt free. Its annual budget is $13 billion and total debt and obligations currently amount to nearly double that—$25 billion. The Governor’s budget overview lists, as one of its budget principles, that the state should “avoid unnecessary debt.” It would be prudent to reduce spending across the board, steeply, to pay down this debt and be completely debt free. Unfortunately, in light of current interest rates the Governor believes it is “prudent” to borrow even more.
Over 10,000 people are locked in state prisons and county jails throughout Utah. 91 are locked down in solitary confinement, a place where one inmate says, “We expect tragedy.” This deprivation appears to be imposed upon prisoners at the behest of their overseers with no written guidelines, creating a potential for abuse such as when requiring solitary confinement for benign actions such as not moving a cup fast enough.
It costs the State an average of $27,117 to house one inmate for one year. Many of these inmates are being locked in a cage for a non-violent offense; in 2010, 916 arrests were made for sex-related offenses, 21,985 were arrested on drug-related charges, 11,978 for violating the state’s liquor laws, 4,398 for “drunkenness,” 5,179 for the loosely-defined “disorderly conduct,” and 1,157 for loitering or violating a curfew.
The imposition of justice against those who have violated another person’s rights is commendable and necessary. Unfortunately, Utah has many laws which turn consensual agreements into criminal behavior, leading to fines and jail time for those whose actions are not inherently criminal, but which are done against the wishes of a majority of the legislature. If the “crime” leads to jail time, many of these non-violent individuals can and do become hardened and once released engage in actual criminal behavior, whereas had they not been sent to jail they may likely have never been tempted to act in such a manner. This “crimogenic” situation makes things worse, and not better, for society at large. As one commenter notes:
Want to make a hardened criminal? Throw a non-violent 19-year-old kid in prison because he was convicted for minor drug possession three times. He may never have committed any other crime in his life other than having a stash of marijuana on him, yet after several years of imprisonment with hardened criminals, he may re-enter society having been raped by other inmates, exposed to gang violence within the prison system, and without connections in the outside world. And while he may have been punished under the letter of the law, what was the benefit to society? Most likely he’ll re-enter the prison system within a short time for another, often more violent crime, because of a lack of opportunities to redeem himself on the outside. It is a tremendous cost to his family, community, state and the taxpayer.
Some efforts have been made to treat non-violent offenders differently, but many more actions are needed to ensure that justice is served only against those who have violated another’s life, liberty, or property.
The state of Utah spends nearly $4.5 billion on social services (see page 15), a figure which comprises 35% of the budget (see page 1). There is a lengthy list of social services for adults, families, children, the elderly, the disabled, the unemployed, and others in need. Even education, which comprises a whopping 39% of the state budget, is itself a socialistic service when funded through taxes and administered by the government.
It would seem, at least superficially, that many Utahns protest socialism when practiced by the federal government, but largely fall silent when it comes to the state taxing for and administering the same services. While the U.S. Constitution does exist as a barrier to the federal government’s implementation of such programs, no legitimate delegation of authority authorizes the state government to tax some people to provide services to others.
Nothing is to preclude Utahns from helping those in need; most would agree that we have an obligation to render assistance to those who cannot subsist on their own. Social safety nets are an essential part of a healthy society, but like many other things, the question comes down to who should administer it and how it should be funded. Because individuals lack the authority to compel their neighbor to subsidize or fully provide their health care, employment assistance, education, and other important needs, they cannot delegate that authority to the government.
The coercive taxation of one group of individuals to provide services to another group of individuals—a government-mandated redistribution of wealth—is what many people commonly refer to (pejoratively) as socialism. This scheme is vibrant and expanding within the state of Utah.
No free market
Along with social services, a number of other government initiatives exist which directly violate free market principles. One prominent effort is the array of activities found within the Governor’s Office of Economic Development, which uses taxpayer dollars as incentives to lure businesses from out of state. It exists, as its website says, to “provide rich business resources for the creation, growth and recruitment of companies to Utah and to increase tourism and film production in the state.” GOED’s annual operating budget is over $30 million (see page 17) and over the past seven fiscal years, has caused the state to forgo $646 million in taxes to offer these incentives.
Imagine how it feels as an existing Utah business to see your own government, to which you have been paying substantial taxes over the years, using your tax dollars as an incentive to lure in a competitor. This logically bankrupt approach to economic development policy enables new companies to be paid by their competitors to siphon away their talented employees.
Through GOED, the government arbitrarily picks winners and losers in the marketplace, and as always, the politically-connected stand to benefit. This government agency regularly pats itself on the back for enticing businesses and movie studios to select Utah as their location of choice. This, they claim, is a boon for the local economy, arguing that the investment of some capital brings in long term capital to the state along with the associated increased taxation revenue. These positive ends cannot be attributed to the free market when the means used to obtain them are orchestrated, incentivized, and managed by the government.
Further, as was explained in a Pew Center on the States report last April on tax incentives, “no state regularly and rigorously tests whether those investments are working and ensures lawmakers consider this information when deciding whether to use them, how much to spend, and who should get them.” In other words, it is possible, and even quite likely, that the market successes being claimed and championed by the politicians would be just as likely to occur independent of such incentives.
Spencer Eccles, GOED’s executive director, argues that “It’s well worth it to pay a little bit back on the money that the company is paying into the state. You are reducing the total [tax revenue], but at the same time, were it not for the incentive, you would basically have no revenue.” This simply is not true. Companies come to Utah of their own accord all the time, without any incentives, and existing companies are forced to submit a substantial amount of their earnings to the state. There would be, and is, revenue independent of such incentives.
Whatever their effectiveness, robbing Peter to pay Paul (or in this case forcing Peter to pay more taxes to give a tax break to Paul’s business) is wrong and unfairly awards benefits to those who can successfully court a few bureaucrats. Governor Herbert said last night that he would “continue to work tirelessly with… the legislature to empower the private sector to create job opportunities for every Utahn.” GOED’s efforts empower a limited few businesses within the private sector only; to play fair, and to secure a free market, GOED must be dissolved.
No right to contract
What do hair braiders have in common with polygamists? Both groups, along with far too many others, are denied the right to contract. Immigrants, consumers of alcohol, would-be medical marijuana patients, midwives, plumbers, veterinarians, home owners, and hundreds of other types of people are denied the ability to engage in peaceful commerce as they please with another consenting adult without first needing to comply with the state’s illegitimate mandates as a condition of their contract.
Implied within the freedom to contract is the freedom to associate. The two are inseparably intertwined, and similarly violated by the state. Consider the well-publicized case of Kody Brown, a polygamist with four “wives.” He is legally married only to one, and cohabits with the others without having attempted to obtain a marriage license. Nevertheless, officials aimed to classify the relationship with his other wives as being a common law marriage, and thus violating federal anti-polygamy laws.
The Brown family had troubles with local officials as well, with Lehi police investigating the family to possibly charge them with bigamy, a third-degree felony, which could have meant up to two decades in prison for Kody and up to five years in prison for each of his wives. As the police noted, state code identifies bigamy by cohabitation, and not just through marriage contracts. In other words, state law violates the freedom of contract between these peaceful, loving persons, and prohibits their association. Fornication and adultery are materially similar (worse, actually) and exempt from legal punishment, but evidently making a commitment to a loving person with whom you want to live is rejected by the state.
Free markets do not exist without the freedoms of contract and association. Freedom itself requires these two fundamental components to be protected and available to all peaceful, law-abiding persons. Utah’s government systematically violates these core concepts of limited government and instead regulates behavior to shape society in a way the majority of politicians prefer.
The accolades aren’t wrong, just incomplete
As we have said before, Utah is a wonderful place to live. Especially when compared with other states, Utah fares better in many regards, and for this we are thankful. But the state’s relative success does not justify the status quo; there is significant room for improvement.
To the extent that politicians throughout the state have taken actions consistent with individual liberty, private property, and the free market, then they should be applauded. There have been many praiseworthy efforts, both legislative and otherwise, to correct some of the aforementioned issues and to better secure liberty. We aim to help swing the political pendulum in that direction more quickly in the years ahead.
Implementing the proper solutions to our political problems requires having the proper benchmark against which we can judge the actions of those in charge. Last night’s address by Governor Herbert was yet one more example of the use of the wrong benchmark for good government. His remarks, which he titled “The Best Kind of Economic Recovery,” were chiefly centered around how Utah’s government will manage the economy to help create more jobs. For the current Governor, the state’s overall economic climate is the primary determination of how efficient and effective the state government is operating.
To the extent that the wrong benchmarks are used, then the wrong solutions will be implemented. Focusing on jobs and economic growth as a primary factor for determining how to manage the state has led, and will lead in the future, to an institutionalized infringement of individual liberty, which is given secondary status (if even that).
Instead, state officials should restore the “security of individual rights,” as Utah’s Constitution says, as a primary benchmark for good government. All actions taken, by any branch, agency, or level of government, should first look to this metric when determining how or if it will act.
In two sections of his address last night, the Governor claimed that the state of the State is “strong.” If the state’s affairs are analyzed solely based on economic factors, then perhaps his contention is accurate. But the information contained in this report, and other information that was excluded, suggests that the real state of the State is in fact weak, when liberty is the primary criteria used in the analysis. As Goethe said, “None are more hopelessly enslaved than those who falsely believe they are free.” Living under the current laws and regulations of the state, Utahns are not free.
Like the Governor, and many other government officials, we wish to improve Utah. We encourage state officials to consider the state of the State more broadly, and expand their view of what must be done to improve the lives of all Utahns.