Batt Orders $26 Million Budget Cut Reduction Will Take Biggest Toll On Education

Concerned by an economic expansion that is slowing much faster than he had hoped, Gov. Phil Batt on Wednesday ordered a $26 million across-the-board reduction in the state’s current general tax budget.

With nearly 10 full months left in the state spending year, the 2 percent budget cut was expected to be absorbed with much less disruption than if Batt had waited until spring and was forced to cover a multimillion-dollar shortfall in just a matter of weeks.

Legislative, judicial and elected state office budgets are not included, although Batt asked that they voluntarily comply with the reduction. Their participation would save another $1 million. The original budget for the current year was just under $1.35 billion.

But the executive order for the holdback has a large impact on education, possibly forcing a property tax increase statewide.

State aid for the 1995-1996 public school year will be slashed by $13.3 million to less than $651 million. Unless lawmakers intervene this winter to formally ratify Batt’s action or restore the cash, emergency property tax increases would be triggered to make up the loss at a time when the governor has been striving to reduce the property tax burden statewide.

Signs of financial problems surfaced last spring when tax collections - primarily sales and personal income taxes - began lagging behind expectations and ended up $5.4 million below the projection lawmakers used in making spending decisions.

That was covered with money earmarked for construction of a new state prison, but that cash has to be restored by mid-February or the prison project - and the cell space needed to cope with overcrowding - would be delayed a year.

Then economists revised their revenue forecast for the current budget year, cutting it by $7.6 million. Analysts said preliminary indications for August showed the gap could widen even more.

To compound the financial problem, Batt decided to cover an anticipated $9 million emergency spending demand that will have to be met by lawmakers this winter, including what the governor’s office said was another $3 million bill from the 1994 forest fire season. That pushed the cost of one of Idaho’s worst wildfire seasons to a record $10.1 million.

Batt directed state agency directors to cut personnel as much as possible to meet their 2 percent budget reduction target, generating speculation that the holdback is more a part of his campaign to cut the size of government than it is to keep the budget in balance.

The governor’s initial attack on government growth last winter focused on the state payroll. He convinced legislators to eliminate scores of jobs that had gone unfilled for six months and he pledged to eliminate any growth in the state work force in the budget he will propose this winter.