January 8, 2009 in Idaho

Otter says budget cuts difficult but needed

Associated Press The Spokesman-Review
 

BOISE — Gov. C.L. “Butch” Otter was at a meeting last month when a woman confronted him over cutbacks in her autistic son’s services through the Department of Health and Welfare, from 30 hours per week to just 22 hours.

“She told me, ‘I wanted to put a face those cuts,’” Otter said at Thursday’s legislative forum in Boise.

He said such encounters underscore the difficulties Idaho government faces as its economy sours: finding places to save as tax revenue shrivels, while simultaneously maintaining necessary services that residents rely on.

“I told her I was going to work real hard to try to get her back the eight hours, but I couldn’t promise her,” Otter said. “When you put that kind of a face on it, I say again, cutting a budget is almost as difficult as raising taxes.”

Otter already has ordered $130 million in across-the-board budget cuts for the current fiscal year and is recommending another $120 million be cut from fiscal year 2010 starting next July.

Otter’s figures tentatively put his proposed 2010 budget at about $2.69 billion, about 8 percent less than the current year’s original appropriation. He’ll present his formal plan Monday in his State of the State speech when the Legislature opens its session.

Legislative leaders who participated in the annual forum agreed that nearly every decision made in the 2009 Legislature will be colored by dismal economic numbers.

Micron Technology Inc., the state’s biggest private employer, has cut thousands of jobs, helping double the unemployment rate to 5.8 percent. In fact, the Department of Labor predicts thousands of newly jobless will sap Idaho’s unemployment insurance fund, possibly forcing the state to seek federal loans like other states by early 2010.

“This is not the year to have a wish list,” said House Majority Leader Mike Moyle, R-Star.

Otter said he’s not ruling out the chance that agencies will have to make significant layoffs.

His budget chief, Wayne Hammon, has said there could be 100 jobs cut; Otter says it will likely be more.

“When you’ve got 26,790 employees, and you see a company with 12,000 employees have to shave off 1,500 … it just stands to reason, it would not surprise me if it’s more than 100, just because of the sheer size,” Otter said. “I’m not going to guess. We’re talking about people’s lives, in many cases careers. To put that kind of scare into them when I truly don’t know, I’m not going to go there.”

Since Wednesday, Senate President Pro Tem Bob Geddes, R-Soda Springs, has been sitting in on the Legislature’s Economic Outlook and Revenue Assessment Committee.

Revenues and employment in the forest products industry are plummeting as northern Idaho mills close; single family home sales have fallen 50 percent in the last three years; even the state’s dairy industry, now the nation’s third biggest behind California and Wisconsin, is expecting turbulence.

Geddes predicted lawmakers will be forced to cut from three major areas: public education, the Department of Health and Welfare and the Idaho Department of Correction. Together, those areas account for some $2 billion in the budget.

“It’s much more depressing than I thought it would be,” Geddes said. “I don’t anticipate we’re going to be able to balance our budget this year and not have to impact the level of funding those three significant parts of our government have received in the past.”

Minority Democrats said budget cuts may be unavoidable, but they say the state shouldn’t cut haphazardly, in a way that will slow an economic rebound, once it comes.

Rep. John Rusche, D-Lewiston and the new House minority leader, wants to shield education from deep cuts, preserve collection staff at the Idaho Tax Commission to maintain revenue, expand drug treatment and provide funding for job retraining. Democratic lawmakers also plan to again push prekindergarten programs Rusche says help Idaho working families.

That’s long been controversial in a conservative state that forbids state money from being used to educate kids younger than 5 years old, on grounds that’s the role of parents, not government.

“I’ve heard it said the only job the Legislature has is to set the budget, which always bothered me, because it points to a short-term way of thinking,” Rusche said. “We don’t look at what happens long term. We look at what happens this year.”

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