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Eye On Boise

Thu., March 19, 2009, 5:41 p.m.

‘Hindsight is always 20-20’

With the defeat today of Gov. Butch Otter's $61.6 million gas tax hike proposal, some are looking back to last year's $68.5 million road-funding compromise that lawmakers offered but Otter spurned. "Hindsight is always 20-20," House Speaker Lawerence Denney told the AP today. "If he would have taken it, he would have $68 million." Click below to read AP reporter John Miller's analysis.

Analysis: Otter may regret spurning 2008 road deal
Associated Press Writer
BOISE, Idaho (AP) — A year ago, Gov. C.L. "Butch" Otter spurned an offer from Idaho House leaders for $68.5 million in roads funding.
On Thursday, the House refused to give him even that much, voting 43-27 to reject Otter's three-year, $61 million gasoline tax hike. Voting no were 28 Republicans and 15 minority Democrats.
"It was a pretty strong signal," said House Speaker Lawerence Denny, R-Midvale, a supporter of the measure who nonetheless added that he never expected it to get 30 votes.
"Hindsight is always 20-20," Denney said, when asked if Otter should have taken what he was offered 12 months ago. "If he would have taken it, he would have $68 million."
When Republican House leaders extended that olive branch in March 2008, Otter was convinced he could get more to unleash construction crews to resurface about 1,000 miles of pavement, repair bridges, create jobs, boost commerce and improve safety.
He told The Associated Press at the time that the House offer wasn't worth fighting over.
"You might as well get out of town," Otter said. "I pleaded with them to do a three-year program to get us to $240 million. I said, 'Why would you want to come and fight that every year and bleed on that every year?"
Idaho's economy had begun to sour by the time legislators went home last year, but there were still prospects of a $200 million-plus surplus. State employees got a 3 percent raise. Lawmakers agreed to nearly double the funding for drug abuse treatment and approved a bonding plan for a new $70 million mental health prison.
In short, Otter had every reason to think that waiting eight months while he took his case on a summer road show to eight cities and towns would yield a different result after lawmakers returned to Boise in January 2009.
The road shows, complete with videos of cracked and aging asphalt, came and went.
Now state unemployment is at 6.8 percent, more than twice as high as last March. Tax revenue is likely to plunge 12 percent through June 30. Thousands of computer chip factory workers at Micron Technology Inc., no longer the state's biggest employer, are set to lose their jobs by August.
State employees, who complained that they deserved more than 3 percent merit raises last year, now face Otter's recommendation of a 5 percent cut in personnel costs, which could lead to declining salaries and layoffs.
Against that backdrop, $68.5 million for roads might seem like a reasonable deal to Otter now.
Before Thursday, some lawmakers argued that his plan to raise taxes on drivers would offset the positive effects of Idaho's $1.2 billion share of the federal stimulus package, $229 million of which the Republican governor wants to go for roads.
"The federal stimulus plan seeks to put money into the hands of our people for them to spend. When we raise taxes on people, we take money out of their hands," said Rep. Grant Burgoyne, D-Boise. "Quite frankly, I think this defeats an important national policy."
Through a spokesman, Otter declined to be interviewed but issued a statement saying, "I am not giving up," indicating he's still holding out hope for a gas tax increase.
His aides have also introduced a new bill to boost vehicle registration fees by $31 million, replacing a measure that contained an $11 million error. It would raise annual licensing costs by as much as 75 percent for owners of vehicles made before 2001. Fees would rise 38 percent for owners of the newest models and 5 percent for the biggest trucks.
House Transportation Chairwoman JoAn Wood, R-Rigby, who voted against the gas tax hike, said the lopsided decision was a clear sign that lawmakers will be very difficult to convince to raise taxes this year.
If Otter insists on pushing registration fee hikes, Wood said, that bill may fare even worse.
"I've been telling him all along he didn't have the votes," she said.

Copyright 2009 The Associated Press.

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Eye On Boise

News, happenings and more from the Idaho Legislature and the state capital.