December 13, 2008 in Idaho

Idaho economic outlook gets worse

News comes on heels of recently imposed cuts
Betsy Z. Russell Staff writer
 

BOISE – Idaho’s economic forecast calls for pain, the governor’s chief economist says, even as state agencies struggle to meet budget cuts imposed earlier this month.

After years of faring better than the nation, Idaho’s economy is now looking at its worst outlook in a quarter-century, state economist Mike Ferguson said Friday.

“The recent economic information shows that Idaho is among the hardest-hit in terms of the economic downturn,” Ferguson said. “We are now at a point where this forecast, as of October, is the worst experience in Idaho since the early ’80s,” when Idaho suffered an economic downturn that was “brutal.”

The bad economic news – including new figures out Friday showing that Idaho shattered its record for a single week’s unemployment payouts over the past week – comes as state agencies are ordering workers to take time off without pay and the state Department of Health and Welfare is cutting Medicaid payments by $35.2 million. Those cuts are to meet the 4 percent cutbacks in the current year’s budget Gov. Butch Otter ordered this month, due to falling state revenues.

The casualties include everything from 65 temporary workers at the state Tax Commission, who will lose their jobs the day after Christmas, to the annual state ceremony celebrating Martin Luther King Jr./Idaho Human Rights Day, which is falling to the budget knife at the state Human Rights Commission.

If the Obama administration proposes a stimulus package to boost infrastructure in the states, however, Idaho could see such projects as the $40 million Dover Bridge replacement funded next year. It’s on a list Idaho is preparing of “projects that are ready to turn dirt, that are ready to go here in Idaho,” said Otter’s communications director, Mark Warbis.

That list also includes major road projects now slated for funding with bonds. Warbis said if they get in on new federal funding, it would save the state the bond payments.

Idaho has enjoyed two decades of robust growth, with construction and high-tech among the bright spots. But that’s changed.

Ferguson said Idaho’s unemployment rate in January was the third lowest in the nation. In October, it was 19th. Percentage growth in nonfarm employment in the state ranked 21st in the nation in January, but was 47th in October, with only Arizona, Florida and Rhode Island faring worse.

All this doesn’t bode well for the state’s budget outlook. “From the standpoint of the economy, what we’re going to be experiencing is pain,” Ferguson said. “That looks to be the case for the next year or so.”


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