July 17, 2007 in Idaho

State has $247 million extra

Betsy Z. Russell Staff writer
 

Surplus cash

Largely due to higher individual income tax collections, the state ended up with $247 million more in taxes for the year than anticipated in the budget.

BOISE – Idaho state Controller Donna Jones announced Monday that the state has a $247 million budget surplus – and she thinks that money should be spent to fix roads, instead of Gov. Butch Otter’s idea of funding road fixes with a $200 million-a-year tax increase.

“As a former legislator, seeing a surplus of this magnitude brings two thoughts to mind,” Jones said in a news release. “First, taxes are too high on Idaho’s families. Second, instead of looking at raising taxes to pay for road and bridge repair, the Legislature could potentially use $200 million of this surplus to tackle Idaho’s backlog of road repairs.”

Otter in recent weeks has acknowledged what his state Transportation Department has long warned of – Idaho’s need for road maintenance and repairs is seriously outstripping revenue, leaving the state with clogged, deteriorating and unsafe highways. State transportation officials have identified a $200 million gap between funding and transportation needs each year in Idaho.

“I feel obligated right now to step up forward and say, ‘Folks, I’m sorry, but we’ve got to have it,’ ” Otter told the Idaho Statesman earlier this month. “… We’ve got to look to the need. We’ve got to look to the economy.”

Otter’s press secretary, Jon Hanian, said Monday, “We appreciate the state controller’s suggestion, because we know she recognizes, as we do, the serious condition many of our roads and highways and bridges are in.”

But Hanian said Idaho needs $200 million a year – not just a one-time $200 million infusion – to fund its road needs. “I think it’s fair to say that he (the governor) is looking at a revenue stream and not a pond.”

Hanian noted that Otter is dealing with many competing needs, including a burgeoning prison population, issues with state mental health services, and an array of education needs from prekindergarten to the public schools to higher education.

Hanian said Otter remains committed to closing the $200 million-a-year funding gap for road maintenance and repairs. “Fiddling while our roads are falling apart is not one of the options – that hasn’t changed.”

Jones said she didn’t mean to undermine Otter’s call for a major tax increase to fund roads – she’s just throwing out another option for the governor and Legislature to consider. “I’m not a policymaker, and that is a decision that ultimately the governor and the Legislature will make,” Jones said. “I know this is a little out of the box, because Idaho’s never before (with rare exceptions) allocated the general fund monies towards the highway maintenance. But maybe it’s a policy option that the Legislature and the governor could explore.”

She added, “Maybe there will be a need to raise taxes. Perhaps, though, by shifting this surplus into that pool, it would delay that. … And if we can avoid raising taxes, that would be great.”

The state transportation department, based on a series of studies, is predicting a $6.1 billion shortfall in highway funding over the next 30 years. The shortfall comes partly because of a decline in federal funding, partly from rising costs, and partly because revenues from Idaho’s 25-cent-per-gallon gas tax – the state’s main source for funding road repairs and improvements – have long been flat, as vehicle fuel efficiency has risen. The gas tax hasn’t been raised since 1996.

The department called this year for major tax increases to fund everything from pothole patching to expanding crowded highways. The $200 million package included 75 percent increases in vehicle registration and permit fees, a 7 percent surcharge on gas, new development impact fees, fees on rental cars and more. The legislation was introduced, and went nowhere – but Otter’s been making it clear that he’s heard the message, and it’s shaping up to be a major issue for next year’s legislative session.

Though Idaho is the third-fastest-growing state, the money it generates for its transportation needs has barely grown in the last decade.

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