February 23, 2009 in Idaho

Idaho headed for budget cuts despite stimulus

By The Spokesman-Review
 

BOISE - Idaho still will have to make substantial cuts in state agency budgets, despite the help it’ll receive from federal economic stimulus funds, state lawmakers said today.

“There’s somehow this feeling that this bill will solve all the problems, and it just won’t,” said Senate Finance Chairman Dean Cameron, R-Rupert. Idaho still could face “reductions in every area,” he said.

His comments came after the Legislature’s joint budget committee held its first of four days of hearings today on what’s in the stimulus bill for Idaho. The good news: Idaho is eligible for more than $1 billion, including $201.7 million for education budget stabilization, $44.9 million for general-purpose budget stabilization, $181.9 million for highways and bridges, $2.6 million for Head Start, $3.2 million for educational technology, $5 million for homelessness prevention, and $2.1 million for dislocated workers, among a long list of specific purposes for which the state could receive funds.

The down side: “What I’ve found so far is there are some real limitations on the use of this funding,” legislative budget director Cathy Holland-Smith told the joint committee. “It is pretty restrictive.”

The panel will delve into details Tuesday on education and economic development funds, including the key question of whether the federal help will allow Idaho to avoid its first-ever cut in public schools funding. Before the stimulus bill passed, the state was looking at up to $130 million in cuts in public schools next year.

Later this week, the joint committee will study details on funds for human services, including changes in the federal Medicaid funding formula, along with natural resources, energy and more. On Friday, the focus will be the impacts of the stimulus on transportation, an area where lawmakers have been mulling a proposal from Gov. Butch Otter to raise taxes and fees to fund more road maintenance.

Sen. Shawn Keough, R-Sandpoint, said, “While there’ll be some help for some things, there’ll still be a need for us to cut our state budget because our people aren’t working and we don’t have tax revenue coming in.”

Idaho’s bad budget news continued Monday, as Micron Technology, the state’s largest private employer, announced another 2,000 layoffs at its Boise manufacturing plant. When they’re all done next summer, Micron CEO Steve Appleton said in a statement, Micron will employ about 5,000 people in the Boise area - half the level of just a few years ago.

Keough, who is vice-chair of the joint committee, said of the stimulus, “It’ll help in some ways, but not to the degree that people are hoping or thinking that it would.”

The education aid that’s headed for Idaho is for higher education as well as public schools, but some strings are attached and the governor will have to apply for the funds, Holland-Smith told legislative budget writers.

“You may be limited in your ability to start new programs with this money,” she said.

While lawmakers are studying the bill, Otter has convened his own panel to advise him on it, including three former governors and five former state budget directors. In the coming weeks, Otter essentially will present a revised budget proposal to the Legislature that addresses how to make use of stimulus funds, lawmakers will debate it and pass a state budget, and then that will go to Otter for his signature.

Legislative budget analysts have been studying the federal legislation in detail. Holland-Smith said the bill is 407 pages long, but there’s also a conference report - twice as long - that’s key to understanding the bill, plus explanatory statements. All now are available online, she said, at www.recovery.gov and several other Web sites.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email