Legislative budget writers put the final pieces into the state’s $1.56 billion general tax budget on Monday, having squeezed as much as possible out of projected 5 percent revenue growth and a cadre of new tax collectors.
A majority on the Joint Finance-Appropriations Committee tinkered at the edges of GOP Gov. Phil Batt’s original proposal, but the final budget of his term does not stray far from the retiring chief executive’s spending blueprint.
After a series of tightfisted budgets, Batt laid out a solid financial foundation for his heirapparent, Republican U.S. Sen. Dirk Kempthorne, who will preside over the last six months of the budget plan assuming no serious election challenger emerges in the next month.
But to make ends meet without resorting to any kind of tax increase, the committee’s manipulations further reduced the already limited maneuvering room policy-makers have in underwriting future state operations.
“There’s some kickers out there that somebody’s going to have to deal with,” House Appropriations Chairman Bob Geddes admitted.
Lawmakers followed Batt in beefing up agency and program spending to cover rising operating costs, replace equipment and give employees an average 5 percent pay hike after they were stiffed this year.
But they also conserved limited general tax money by scraping cash out of nearly every other corner of the treasury. Even so, fuel tax revenues to finance the state police, Water Pollution Control Account receipts to cover environmental regulation and fees that finance hazardous waste cleanup, monitoring and training all fell short so that millions of dollars of general tax receipts had to be diverted to plug the gap.
At least two special funds will go broke before the budget year, creating the likelihood that even more general tax money will be siphoned off. Inadequate resources for state building maintenance is leading to the permanent diversion - beginning with the first budget the new governor proposes - of $3 million more from the general treasury.
Pressure is building for an increased state commitment to support services for the poor to keep them off welfare and working even if it is at low-paying jobs.
And by the end of his first year in office, Kempthorne will be looking for about $18 million to make the first payment on the new 1,250-bed prison.
“I think Kempthorne is probably going to be surprised at how much different state government works than where he’s at now,” Senate Finance Chairman Atwell Parry said. “As any new governor, he’s going to have a lot of problems he didn’t contemplate.”
Parry may not have helped things when he indicated a few days ago that serious consideration is going to have to be given next year to finding millions of dollars to boost the pay of critical jobs so the state can retain qualified professionals.
And Kempthorne’s own wife, Pat, may have compounded financial problems on Friday when she endorsed a state-financed expansion of the Head Start program that offers preschool and other parenting assistance to low-income working parents.
Pat Kempthorne said her support for the $1.5 million expansion was no signal that her husband will embrace it, but she emphasized his commitment to children.
The governor and legislative budget writers have been resorting to nearly every trick in the book to avoid a tax increase since adopting in 1995 Batt’s local property tax cut. More than $130 million has already been siphoned from the general treasury to pay for the cut that has not seemed to quell property tax complaints, and another $55 million is being diverted during the 1998-1999 budget year.
“We’re not going to be able to divert money and continue funding what we have now,” said Sen. Marguerite McLaughlin, the senior Democrat on the budget panel. “And there are all these new, progressive ideas out there that cost money, and you can’t keep cutting the programs we have.”
Conservatives like Parry and Geddes believe the state’s spending policy can head off the tax man for another few years, but even Parry does not believe Kempthorne will make it through the four-year term without facing a decision between more taxes or major program cuts.
“As long as the public out there demands services, you’re eventually going to have to find another source of revenue,” Parry said.
And that decision could be accelerated by further cutbacks in federal support that leave policy-makers facing the diversion of more state money or elimination of the program.
“Either way we’re going to run into a brick wall, Parry said. “I don’t know how much longer we can hold them off.”
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