Bill Would Start Rainy Day Fund Measure Passed By House Would Force State To Sock Away Money For Budget Shortfalls
Rep. Jim Clark won the House’s support Wednesday for his plan to force the state to build a large savings account.
“It’s good common sense,” said Clark, R-Hayden.
Opponents worried that the bill would make a large savings account the highest priority in the state budget, higher than education or other pressing needs. Others said taxpayers don’t want the state to build up savings accounts - they want any excess money given back.
But the bill passed the House 48-16, and heads to the Senate, where Clark is optimistic it will pass. Anearlier version of the bill easily passed the Senate last year.
“This will stabilize the revenues, eliminate tax increases and do something about budget holdbacks,” Clark told the House. “It’s a good way of doing budgeting.”
For the past two years, Idaho has had mid-year budget cuts because revenues ran short.
Here’s how the bill would work: In any year when state revenues grow by more than 4 percent, 1 percent of the budget would automatically be transferred to a special “budget stabilization fund.” Both houses of the Legislature could vote to override the requirement.
The automatic deposits would end when the fund totals 5 percent of the state budget, which now would be about $75 million.
Idaho’s budget reserve fund totals $36 million. Legislators this year voted to deposit $8.5 million.
Rep. Ken Robison, D-Boise, said lawmakers made that decision “with our eyes open.” Had the bill been in effect, the state would have been forced to set aside $15 million.
The automatic withdrawals would guarantee that Idaho will never be able to afford to solve its school building problem, Robison said.
North Idaho representatives split on the bill. Reps. Jeff Alltus, R-Hayden; John Campbell, R-Sandpoint; Chuck Cuddy, D-Orofino; and Hilde Kellogg, R-Post Falls; voted with Clark.
Reps. June Judd, D-St. Maries; Wayne Meyer, R-Rathdrum; Don Pischner, R-Coeur d’Alene; Jim Stoicheff, D-Sandpoint; and Larry Watson, D-Wallace; voted against the bill.
Pischner, who serves on the Legislature’s budget committee, noted that the bill calls for building a huge savings account, then forbids withdrawals that decrease the balance by more than 50 percent. That leaves half the money untouchable, he said.
“Give it back to the taxpayers,” Pischner said.
Alltus argued for the bill. “This is a bill that will protect us from, in the future when we have a shortfall in revenue, having to have a big tax increase, or any tax increase.”
Three-term Rep. Dan Mader, R-Genesee, called Clark’s measure “one of the best bills that we’ve passed through this body since I’ve been here.”