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Otter proposes 5% education cut

Mon., Jan. 12, 2009, 6 a.m.

BOISE – Idaho Gov. Butch Otter dropped a bombshell on state legislators Monday – a proposal for the state’s first-ever cut in public school funding.

“The fact is that my proposed public schools budget is reduced far less than I’m recommending for other state agencies,” the Republican governor said, as he unveiled a plan to cut school funding by 5.34 percent next year. Overall, his proposed budget would be 7.33 percent less than the original state budget for this year, before an economic downturn forced mid-year cuts.

The shock of the school budget cut was compounded by Otter’s plan to raise $174 million a year in taxes and fees for transportation – a 2-cent per gallon increase in the gas tax each year for the next five years, plus hikes in vehicle registration fees, a 6 percent excise tax on rental cars and more. “Simply put, our transportation revenue system isn’t designed to meet our needs today,” Otter said. Idaho hasn’t raised its 25-cent per gallon fuel tax since 1996.

Sen. Nicole LeFavour, D-Boise, said, “It’s an odd set of priorities, in my mind, to be willing to raise taxes for roads but not for school kids.” After his speech, Otter was questioned about criticisms that he put “potholes ahead of people” in his budget.

The governor then got into an impromptu debate with House Democratic leaders as he left the Boise State University Special Events Center, where he delivered his State of the State message since the state Capitol is closed for renovation.

“Are you suggesting we take money out of transportation and put it into social services?” the governor demanded. “So where are you going to find the money?” He accused the Democrats of “mixing apples and oranges.”

Idaho puts no general tax dollars into transportation funding, relying instead on fuel taxes, vehicle registration fees and federal funds for road construction and maintenance. Otter didn’t propose changing that – yet – but called for a study of how much sales tax is generated by auto, tire and car parts sales. “While I’m not advocating a shift in those revenues today, it is important for us to compile the data so that we can make informed decisions down the road,” he said.

Senate Education Chairman John Goedde, R-Coeur d’Alene, said, “This is dismal – there’s no question about it.” He said the budget crunch may mean some teachers lose their jobs, “and that means larger classes.”

He added, “We may have to look at a moratorium on some of the statutorily required rollups” in the state schools budget, which require automatic increases for such costs as employee benefits and transportation.

The proposed cut, if lawmakers go along, would be roughly $75 million.

State Superintendent of Schools Tom Luna said, “There’s no doubt that education is going to receive less money than they got this year. No one is happy about that, but it’s the situation that we’re in.” Asked if he accepts the governor’s proposal for a 5.34 percent cut in school funding, Luna said, “We’re still in the process of reviewing it.”

Luna said he’ll present a revised budget request to lawmakers. It may or may not match Otter’s figure, but, he said, “It will be a decrease.”

Other state agencies would see much bigger cuts under Otter’s proposed budget: 7.5 percent from the state Department of Health and Welfare, 10 percent from colleges and universities and nearly 12 percent from the departments of Water Resources and Corrections.

“It is my intent to continue an unrelenting scrutiny of state government programs that use Idahoans’ hard-earned dollars,” Otter declared, earning one of the few rounds of applause lawmakers gave him during his 45-minute address to a joint session of the Legislature.

The address outlined few new initiatives, beyond budget cuts and the transportation proposal. Otter did propose continuing the scheduled increase in Idaho’s grocery tax credit, which partly offsets the sales taxes Idahoans pay on groceries; scaling back the duties of the State Board of Education to limit it to policy-setting, rather than day-to-day school operations; and adding staffers to the state forensics lab and the state appellate public defender’s office. Overall, however, his budget would force the layoff of roughly 100 state employees next year.

He called for spending only about 35 percent of Idaho’s $390 million in rainy-day funds, from four state savings accounts. No one knows when the recession will end, he said. “I want that buffer.”

Senate Finance Committee Chairman Dean Cameron, R-Rupert, said, “The governor laid out a pretty strong foundation and blueprint for us to start from.” Of the school budget cut, he said, “It is unprecedented, and I’m not real excited about that part of his proposal. But at the same time, I’ve got to give him the benefit of the doubt and look at the realities of the situation.”

“I know I and my committee will work very hard to do the best we can for public schools,” Cameron said.

The governor’s speech kicks off Idaho’s legislative session, setting what many lawmakers described as a “somber” tone. After the speech, Senate Republicans gathered in a closed caucus to elect a new majority caucus chairman to replace Brad Little, who was appointed lieutenant governor. Sen. Russ Fulcher, R-Meridian, defeated Sen. Jim Hammond, R-Post Falls. His new leadership post means Fulcher must give up his seat on the joint budget committee; a scramble is expected this morning for the key post.

Sen. Shawn Keough, R-Sandpoint, missed the session’s opening because her husband, Mike, had a heart attack on Friday night. Keough said, “The good news is he’s doing very well, and we were able to get to the hospital in time. He’s progressing and improving rapidly.”

She said she’ll monitor this week’s legislative hearings on the Internet and on Idaho Public Television, and is staying in close touch with other lawmakers.

Luna said as he looks at school budget cuts, “My priority is to preserve the teacher-student contact time, because that’s where education happens in schools.”

He said, “It’s going to be uncharted waters for public education, but I think much of what we’re experiencing in Idaho and in the nation with the economy is uncharted waters.”

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