The Herald certainly agrees with the concept of careful, responsible economy in state govemment – and repeatedly has said the same for economy at local, county, and federal government levels. But we do not believe the Initiative Petition No. 2, which will appear on the November 2 election ballot, is the way to go about limiting state expenditures. The “Budgetary Procedures Ceiling Act,” forced on the ballot by initiative petition, would impose limitations on the state budget for a five-year period beginning with the budget year 1977-78 and ending with that of 1932-83, The proposed law, as interpreted by the Utah Foundation, would place a five-year spending ceiling at $915,300,00tJ, the amount of the 1976-77 state budget, Neither the governor nor legislators would have authority to exceed the amount, and once in’ force, the law could not be changed without being submitted to vote at a general election. Further, total federal revenues could not exceed 30 per cent of total budget appropriations for 1977-78 and would be reduced by one-fifth each year thereafter and phased out in 1982-83. No federal funds could be transferred through the state clearing house to local govemment subdivisions, beginning in the first year of operation. The proposal, says the Foundation, provides that all state surplus funds would be used to retire state indebtedness and phase out federal grants-in-aid and revenue sharing. If this were completed, taxes would be reduced to avoid surpluses. ‘ Sponsors of the initiative petition contend that the state budget has risen unreasonably in recent years and that the federal government through its grants and revenue sharing is exercising undue influence and control over state and local govemment. This may be true, at least in part, but with all the good intentions of the sponsors, it seems to us the adverse effects of a rigid spending ‘ceiling would far exceed the benefits, and could cause severe hardship and dangerous situations, As foes of the proposal have said, a rigid budget ceiling could stifle development in a growing state. Jobs and payrolls could be involved. In the face of shrinking dollars from continued inflation, a rigid ceiling could dramaticallyreduce state operations, including the school system. (University of Utah President David Gardner this week said the proposal would cause drastic curtailments that would “ruin” that school.) Phasing out of federal aid obviously would eliminate many state programs, with dire effects especially seen in highway and welfare systems, it is argued. The interstate highway program is almost 95 per cent federally funded. Nearly 47 percent of the Utah Transportation Department’s total budget for 1976-77 will be met by federal funds. Welfare-wise, according to figures quoted by the Utah Foundation, more than two-thirds of the money for direct public assistance and medical assistance (excluding administrative costs) comes from the federal government. There are other arguments ‘that Utah is entitled to considerable federal aid as a matter of equity since about 70 percent of the state’s land area is in federal ownership; that rejection of federal funds would be unjust because of federal taxes paid by Utahns, etc, Withal, the arguments against Initiative Petition No. 2 far’ outweigh the arguments for, as we see it. The Herald urges defeat of the proposal in the election.