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Posts tagged: Legislative Council

Legislative Council hears generally positive budget numbers

The Legislative Council, the bipartisan leadership panel that handles matters between legislative sessions, met today, and among the reports it heard was an update on the state budget. It was generally positive news; although revenue estimates have been adjusted downward slightly since the end of the last legislative session, some costs have come in lower than anticipated, including a multimillion-dollar rescission from the Medicaid program due to lower than anticipated costs. As things stand now, the state general fund is on track toward an $85 million ending balance, or surplus, when fiscal year 2015 ends on July 1, 2015, up from the estimate at the end of the legislative session of $79.4 million.

Looking ahead to next year, based on agency budget requests, Idaho could end the 2016 fiscal year with a $50.7 million surplus, if revenues hit the projected 5.5 percent. “We’re glad to see the economy going the direction it is and at a little faster rate, as we recover from the recession,” said Senate President Pro-Tem Brent Hill, R-Rexburg, who co-chairs the Legislative Council.

He was particularly pleased to hear estimates from legislative budget analyst Paul Headlee that while this year’s public school budget is $44 million below the fiscal year 2009 level in general funds, if current requests are funded, next year’s would finally exceed that ’09 level, by roughly $43 million. That’s based on current state schools Superintendent Tom Luna’s proposed budget for next year, which could be amended by his newly elected successor, Sherri Ybarra. Luna originally proposed a 6.9 percent increase for schools, but that’s been amended down to 6.4 percent because an anticipated PERSI rate increase was cancelled by the state retirement fund’s board, so those anticipated costs have been removed from all state agency budget estimates.

“If we were to follow the recommendations so far, we will have restored all of those cuts plus shown some increases,” Hill said.

The council also heard a report on the potential costs of the pending tiered licensure rule at the state Board of Education. The controversial proposal may well change; it’s been the target of heated criticism at hearings around the state.

But as proposed, the rule has generally been described as costing roughly $220 million a year once it’s phased in, for a new teacher compensation program that would raise teacher pay while tying it to three new performance-based tiers of teacher licensing. Headlee plugged in the costs of benefits and growth, and came up with a new total figure: $304 million a year in ongoing costs at the end of the five-year phase-in. He also calculated the costs of sticking with Idaho’s current teacher compensation system for the next five years, which requires certain increases for years of experience and education; staying with the current system would have an ongoing additional cost of $127 million to the state general fund by that same five-year point.

That means the difference, or “new money,” required to bring on the new tiered system would be $177 million. Hill that analysis may make the concept “more palatable” to legislators.

Analysis: Idaho more conservative than most states in revenue forecasting

A new analysis shows that over the past 31 years, Idaho's been more conservative than most states in estimating its state tax revenues - the key figure that determines how lawmakers set the state budget. In 11 of the last 31 years, over-estimates of revenues resulted in deficits; but in 20 of the last 31 years, under-estimates resulted in surpluses. The issue has been much in the news the past few years, as Idaho and other states saw revenues fall short during the sharp economic downturn, then under-estimated revenues, forcing deep budget cuts even as the economy began to rebound.

A recently released study by the Pew Center on the States and the Rockefeller Institute of Government found that from 1987 to 2009, states nationally have seen their revenue estimating errors grow, as forecasters missed turns in the economy. “It's not just the state of Idaho - it's everybody,” said Idaho legislative budget analyst Ray Houston. “All states miss it.” The national study found that state tax revenues have become more volatile, and recommended several steps for states, from removing politics from the estimating process to refilling rainy-day funds to manage volatility.

Houston ran the numbers for Idaho for the past 31 years, to compare to the national study; here's a graph of his findings for fiscal years 1980 through 2010. Idaho's state revenues have been rebounding in the current fiscal year, 2011, which ends June 30, though lawmakers set a budget for the coming year anticipating little growth. Houston said when you compare the time periods that are in both his analysis and the national study, Idaho had a positive 3.4 percent error rate over 23 years, while nationwide, states had a 1.5 percent negative error rate.

“We are still more conservative than the other states in terms of our error rates,” Houston told the Legislative Council.

Of whistleblowers, fraud and audits…

Don Berg, head of Idaho's legislative audits division, told the Legislative Council today that two of his staff members are now certified fraud examiners. But he said the best way to find fraud is through whistleblower protections and encouraging tips from state employees or citizens; many states have hotlines for that purpose. Under questioning from lawmakers, Berg said he worked with the state controller's office on a hotline plan several years ago, but then the state economy tanked and the project was abandoned for the moment. Said Berg, “The audit process is rarely the catalyst that identifies the fraud or the issue, although we're trying to be more proactive and alert to that.” He said when he opens the newspaper every day, “I hope that the front-page story isn't some grandiose fraud from some senior state official that I should have known about.”

Among the biggest challenges in the audit division now, he said, is the continuing issue with Molina, the Medicaid billing contractor with the state Department of Health & Welfare. Because the company's problems created big delays in payments to providers, it sent interim payments out to tide them over, but now, Berg said, “There's $120 million paid to Medicaid providers that they can't identify the client or the service.”

Rep. John Rusche, D-Lewiston, a retired physician and health insurance executive, said, “That $120 million of unidentified expenses makes it very difficult to do valid managed-care contracting, because you can't identify the services.” That'll be a problem, he warned, as this year's Medicaid reform bill, HB 260, requires moves toward managed care starting in the upcoming fiscal year.

Berg said the interim payments “sidestepped the entire process, so they're simply sending this chunk of money out to the providers and then doing this enormous reconciliation. … To connect the dots to the client - this is the thing that they're trying to work through.”

Capitol Giftshop goes online

Say you're in the market for some Idaho items, like a Spuddy Buddy beanie or a state Capitol T-shirt, to send to far-off relatives. The state Capitol Giftshop is making it easy now - it's online; you can shop it here. Prices include shipping. Asked if the shop charges sales tax on online sales, capitol staffer Robyn Lockett said, “Yes we do,” prompting appreciative laughter from the Legislative Council. Lawmakers have been reluctant to enact any legislation to participate in a multi-state effort working toward online sales taxes, but Idaho already requires people to pay sales tax on online sales - if they don't pay it when they buy, they're supposed to report it and pay it on their income tax forms.

Big capitol hearings dubbed ‘success’

Reviewing this year's legislative session, Legislative Services Director Jeff Youtz told the Legislative Council this morning that this year's unprecedented large public hearings were a success. “By and large it went very well, I thought,” Youtz told the council, which is chaired by House Speaker Lawerence Denney and Senate President Pro-Tem Brent Hill. “The opportunity for the public to participate is just tremendous in this newly redesigned building. We could never have done that in the past.”

Senate Minority Leader Edgar Malepeai said some hearing attendees were frustrated, including one who complained of traveling from Coeur d'Alene and being high on the signup list, but not being called to testify. “There's nothing more frustrating than having someone fly in at their own expense, and realize they're never going to get in front of the committee,” Malepeai said. He suggested a consistent process for hearings, but several other lawmakers disagreed, and said it's worked well to have committee chairmen determine how hearings are handled. “There may be from time to time those tragic kinds of examples, but we saw those committees running deeply into the evening to accommodate people who came from not the Treasure Valley area,” said Senate Majority Leader Bart Davis. “I don't recall a session where we had a greater amount of public input including from people outside of this valley than this year. … I think it was remarkable.”

Sen. Nicole LeFavour, D-Boise, said she was bothered by the alternating of testimony from people for and against legislation. “That pro-con trading … attempts to present the two sides as if they are equally divided when in fact they are 8-1,” she said. “I think that tends to warp what is going to come out.” Sen. Steve Bair, R-Blackfoot, said, “I like the idea of leaving how those hearings are run in the hands of the committee chairmen. That's their responsibility to do that. I'd hate to mandate from somewhere else how those are done. I think each one of those hearings is a little bit different.”

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About this blog

Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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