The Sandpoint area is in “desperate” economic straits, and tourism businesses there aren’t getting their fair share of state tourism grants, the local chamber head, Amy Little, told state lawmakers today. She  and Sen. Shawn Keough, R-Sandpoint, proposed legislation to give counties a share of the tourism grants proportionate to the bed taxes they collect (which fund the grants), rather than just allocating them by region, and requiring that the Travel Council seats rotate among residents of the various counties in each region. The bill, SB 1081, was killed in committee this afternoon on a 6-3 vote. You can read my full story here at spokesman.com.

Gov. Butch Otter has issued an executive order creating a “stimulus executive committee” to study the federal economic stimulus and make recommendations within 30 days on how Idaho should spend the money. That could mean a considerably longer legislative session, as lawmakers must set a budget for next year, and will need to factor in the federal money. “There remain a lot of unknowns here,” Otter said. “It will take a lot of work to get our arms around all the implications of this law. We need to make sure safeguards are in place and that every ‘i’ is dotted and ‘t’ is crossed. This is taxpayer money, and all of us are committed to seeing it used in the most effective and efficient way possible.”

Otter gave each state agency until noon on March 4 to submit information to his office on how it anticipates using the stimulus money, and how it fits in with the agency’s mission, state law and the constitutional mandate to balance the state budget. Click below to read the governor’s full announcement.

Gov. Butch Otter will take his time figuring out what Idaho’s share of the federal stimulus will be, AP reporter John Miller reports - a move that could delay budget-setting for next year and likely prolong the 2009 legislative session. Click below to read Miller’s full report, which also says lawmakers are planning to stick by painful cuts in Medicaid they’ve already made this year, despite the infusion of millions in new federal funds.

Idaho’s senior U.S. Senator, Mike Crapo, addressed the Senate and House today, and was held up for about 10 minutes in the Senate as that chamber wrapped up a hot debate on sewage rules. “I think I just interrupted a debate on septic tanks,” Crapo said as he opened his remarks to the Senate. “I think we had that debate when I was here. … It’s nice to see that some things don’t change.” Crapo is not only a former state senator, but former Senate president pro-tem.
 
He offered lawmakers what he called a bit of unsolicited advice about the upcoming federal stimulus funds. “You are going to now be faced with an interesting job, as somewhere between $600 million and a billion dollars of this bill will flow into Idaho, a lot of it flowing into programs that you administer as policy makers in the state. One of the big concerns that a lot of us have with this bill is that the increases in a number of these programs will be built right into the federal base and into the base of the states, so that we actually, instead of starting out the next fiscal cycle with a $1.2 trillion deficit, we will have a deficit that starts growing unbelievably large.
 
“I just encourage you, as you deal with this largesse that is going to be coming your way in terms of the stimulative dollars, that you pay very close attention to what it will do to your base in your budget here in the state,” Crapo told the Senate. “I’m not telling you what to do with it or how to handle it. What I’m saying is … I don’t think it can last forever.” He added, “I know that you didn’t necessarily solicit that advice and I know it’s not going to be easy as you deal with these issues, but I strongly encourage you to be very careful as you implement the utilization of these dollars as they move into the state coffers.”

It was quite a debate for a resolution rejecting an agency rule, but the Senate has voted 27-7 to reject a Department of Environmental Quality rule, approved 6-1 by that agency’s board, to stiffen requirements for new septic systems to protect water quality. You can read my full story here at spokesman.com. “None of us wish to see our lakes and waters degraded,” Sen. Joyce Broadsword, R-Sagle, told the Senate. “That’s not the point here. .. We’re sending a message to the agency.” She said the DEQ didn’t adequately prove to lawmakers that septic systems with more water flowing into them have a greater risk of failure. “It’s debatable,” she said. “By and large, there was no scientific proof that the failures of sewage systems in Idaho were in any way tied to increased flows.”

Opponents disagreed. Idaho’s health districts and the DEQ conducted a statewide wastewater generation study that included 2,800 homes and presented the results to the DEQ and the Legislature. They showed that one in seven are exceeding design standards. “Responsibility for the water quality of the state rests on our shoulders, and I would hope that we would always do our best to maintain that,” Sen. Nicole LeFavour, D-Boise, told the Senate. But several North Idaho senators spoke out in favor of rejecting the rule. Sen. John Goedde, R-Coeur d’Alene, said health officials should educate people about how to better maintain their septic systems. “That would be a proactive thing they could do,” he said. Sen. Jim Hammond, R-Post Falls, said, “Right now there is not an agreement on the problem or the resolution to the problem.” He said all involved should get together and agree on solutions. “No one would argue with protecting our water, especially those of us who life up near those beautiful waters.”

Sen. Kate Kelly, D-Boise, said the DEQ conducted an extensive and inclusive negotiated rule-making process before bringing the new septic rules to its board for approval. “This was a very deliberative, inclusive process,” she said. “When these systems start failing, it’s going to affect our water quality and it’s going to affect our tourism. It’s going to affect all sorts of things.” Broadsword, the measure’s sponsor, said, “I would agree that this was a negotiated rule-making, but there were folks that were left out of the negotiations.” During the roll call, Sen. Chuck Coiner, R-Twin Falls, rose to explain his vote, and said, “Everybody had an opportunity to be there - some chose not to, and that bothers me.” Nevertheless, he voted in favor. The seven “no” votes included six Democratic senators plus Sen. Gary Schroeder, R-Moscow.

The septic rules, first proposed by the Panhandle Health District in North Idaho, led to something of a scandal when John Eaton, a lobbyist for the Realtors, withdrew a campaign contribution to Joan Cloonan, a DEQ board member and legislative candidate, after she voted for the rule - which his group opposed. State officials said no laws had been violated. Broadsword told Eye on Boise, “The flap over John Eaton didn’t even surface up north.” She said, “I didn’t really hear from the Realtors in my area, I heard from contractors, I heard from homeowners, and they were concerned about having to put in larger systems.”

State Schools Supt. Tom Luna was prepared to go to the mat with his fellow state Land Board members this morning to try to get an additional one-time, $30 million payout from the state endowment to ease Idaho schools through budget cuts next year, but he withdrew the proposal this morning due to the oncoming federal stimulus money. Luna told the Land Board, “I submitted a budget to the Legislature identifying approximately $62 million from the public education fund,” which he said was the most he thought the state could cut in 2010 “without any long-term effect to the gains we have been making with student achievement. I also made it clear that any more cuts, we would need to look at other sources of revenue.” Then, it began to appear that schools could face up to $130 million in cuts next year. “Last week I requested this item be put on the agenda,” he said, for a “one-time distribution from the earnings reserve.”

Idaho’s endowment fund earnings go to schools and other beneficiaries, such as state universities, but a portion is placed into an earnings reserve fund, to allow full payouts in years when investment returns fall short. Luna said by the end of this fiscal year, the earnings reserve fund will have enough for three years’ payouts. “My question is, is it necessary to carry $90 million or three years’ worth of reserves, or wouldn’t two years be adequate under these circumstances, and do a $30 million one-time distribution?” He said it’s part of “looking under every rock” to find money for schools.

However, Luna’s fellow Land Board members raised questions about the plan, even as he sought to withdraw it. Secretary of State Ben Ysursa said, “Any sort of request like this would have to be vetted first in front of the endowment investment board.” Attorney General Lawrence Wasden said, “We have a fiduciary responsibility here … taking a dollar today inhibits our ability to distribute that dollar in the future.” Gov. Butch Otter asked Luna if the schools would then pay back the endowment fund in better times, since the fund is experiencing big losses now, including another 5 percent loss in January. Then he told Luna, “I’m just jabbing you.”

Luna said he’s “pretty confident” that Idaho will receive $245 million over two years for school budget stabilization. “I’m pretty confident we have the numbers nailed down, but what we don’t have is the timing and the flexibility,” he said. At this point, he said, it appears that there’s no need for cuts in public schools at all next year - Idaho should be able to keep schools at the current year’s level. “I don’t see any increases in the 2010 budget - the goal is, and I think we’d be truly tickled after all we’ve been through, if we could end up with a budget equal to ‘09. That would be a good thing for education.”

State Labor Director Roger Madsen told lawmakers this morning, “The recession hit Idaho harder and faster” than other states. “After posting the lowest unemployment rate in the nation in 2007 … no state has seen as large a percentage increase in its unemployment rate as Idaho.” There are now 30,000 more Idaho workers out of a job than a year ago, Madsen told the Joint Finance-Appropriations Committee, for a total of about 50,000, a record. All 44 Idaho counties have higher unemployment than a year ago, and phone calls to state unemployment offices have doubled since Labor Day. Since the end of 2007, 37 of Idaho’s 44 counties have seen their unemployment rates double.

The result has been a boom in unemployment benefit payouts. Those payouts, while no substitute for actual jobs, have had “a positive economic effect, certainly upon the families involved,” Madsen told lawmakers. Idaho’s unemployment benefit payouts have soared to the point that borrowing from federal funds will be necessary, he said. Meanwhile, budget cuts have eliminated 15 percent of the Labor Department’s work force. “We are attempting to cope with our biggest workload in history,” Madsen told JFAC.

Asked by lawmakers about January unemployment rates, Madsen said figures aren’t expected to come out until Feb. 27 because of federal benchmarking this month. “We expect ‘em to go above 7 percent soon,” he said. “The layoffs have continued.”

Here’s a link to my full story in today’s Spokesman-Review on the unanimous introduction yesterday of the new day-care licensing bill – the fifth straight year one has been proposed – and here’s a link to my full story on the reception in Rev & Tax yesterday for the bill to raise the beer and wine tax, which survived and is headed for a full hearing. Idaho Statesman columnist Dan Popkey has a column today on the jockeying over who will fill the North Idaho seat on the state Board of Education when Sue Thilo’s term expires; here’s a link to the column, “Rep. Nonini pushes hard (real hard) for his pick for State Board.”