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Spokane, Washington  Est. May 19, 1883

Batt’s Cutbacks Approved By Budget Writers Only Public Education Escapes 2.5 Percent Reduction In Support

Associated Press

Gov. Phil Batt’s $17.7 million spending cut to keep the current general tax budget in the black was overwhelmingly approved on Monday by legislative budget writers.

Only Republican Sen. Evan Frasure of Pocatello objected to the 2.5 percent reduction in general tax support because it exempted state aid to public education while affecting every other state operation, including higher education.

“We build a higher education budget for growing institutions and then comes this across-the-board cut,” Frasure aid. “Education is education. It all ought to be treated the same.”

Batt exempted public education, which would have suffered a loss of $17.2 million, to avoid placing any more pressure on local property taxes, which sill provide about 20 percent of basic school financing.

The four state colleges lost about $4.5 million of their $178 million in state support.

Economic circumstances left the state little choice but to impose the cut - or raise taxes, and the GOP governor and the nation’s most Republican Legislature rejected that alternative out of hand.

It was the second straight Batt holdback endorsed by the Joint Finance-Appropriations Committee. A 2 percent across-the-board cut was imposed on the 1995-1996 budget - except for public education - to accommodate the overall slowing of the state’s economic growth.

This year’s reduction was caused by the bottom falling out of the computer chip market, slashing projected corporate tax payments by 33 percent.

Two cuts in a row from spending blueprints that were frugal to begin with, combined with years of ignoring the rising cost of operations and need for replacing program equipment, have left some concerned that the integrity of state programs serving tens of thousands of people was finally in jeopardy.

But muting the current reduction was about $7 million in cash state agencies did not have to pay out for group health insurance because of a premium surplus that had built up over time. Batt allowed agencies to use the money to partially offset the reduction.

And while the University of Idaho as a selfinsurer did not benefit from the premium surplus, analysts said it used an accounting maneuver to soften the holdback’s impact.

Budget writers also approved several emergency appropriations for agencies that had found other sources of cash to further offset the holdback.

The Correction Department got approval to use $350,000 in higher-than-expected receipts from inmate labor crews and unanticipated payments from the state Endowment Fund.

And the Parks and Recreation Department was grudgingly given the authority to spend another $16,100 in receipts from its new trailbike licensing program for administration, replacing general tax money.

The department was authorized to spend up to 15 percent of the estimated $200,000 a year being collected under the program to run it with the rest of the cash being doled out in grants to local organizations.