Idaho releases lower revenue forecasts

BOISE – New revenue forecasts were issued by Idaho Gov. Butch Otter’s economists Thursday that reduced next year’s expected tax collections by $70.1 million.

Otter expects to cut the budget he already has proposed to lawmakers.

“Our goal is to work together, not to stake out a position and fight over it,” said Wayne Hammon, Otter’s budget chief.

He and legislative budget director Cathy Holland-Smith briefed the Joint Finance-Appropriations Committee on the latest revenue revisions Thursday, and lawmakers were concerned.

“We’re just going to have to budget with a conservative attitude at this point, and we’ll cross our fingers and hope that we can succeed in emphasizing our priorities,” said state Rep. Frank Henderson, R-Post Falls, who serves on the joint committee.

The largest budget item Otter has called for next year is $78 million for average 5 percent merit raises for state employees. That 5 percent can’t be funded under the new revenue forecast, Holland-Smith told the committee.

The governor might push for 4 percent, Hammon said.

The joint budget committee canceled the meeting planned for this morning. Instead, a special legislative committee on state employee raises will convene and decide what to recommend.

Senate Finance Chairman Dean Cameron, R-Rupert, said that panel’s decision will be among the factors legislative budget writers will have to consider when they begin setting state agency budgets next week. The lower revenue figures could endanger teacher merit-pay proposals, drug treatment, school funding and more.

Hammon said the governor is willing to work with lawmakers to make the budget fit the revenues. Some of the governor’s proposals – such as squirreling away $10 million against future firefighting costs and spending $58.5 million to pay off state bonds early – likely will be dropped, he indicated. Otter plans to stick by his top priorities – raises, a $50 million endowment for a state scholarship fund and a $20 million statewide aquifer modeling program, Hammon said. He still plans a car registration fee increase and other proposals to increase funding for transportation, Hammon said, and Otter discussed those proposals with legislative leaders Thursday morning.

Otter’s plan for raises for state employees is paired with proposed cuts in benefits. Hammon said any benefit cuts would be scaled back by the same ratio that raises are reduced.