Budget crunch may force more cutbacks
BOISE – The co-chair of the Idaho Legislature’s joint budget committee on Friday called on all state agencies to stop spending money except for operating costs “until further notice.”
The move came as lawmakers are considering cutting another $101 million from next year’s state budget, on top of the steep cuts already called for by Gov. Butch Otter.
State agencies already have had to trim 4 percent out of their budgets this year at the governor’s order. Legislative budget writers on Thursday endorsed those cuts and voted to make them permanent. If further cutbacks are required in the current budget while the Legislature is in session, lawmakers, rather than the governor, would have to order them.
State Sen. Dean Cameron, R-Rupert, said the budget crunch may force more midyear cutbacks.
“Obviously any adjustments that are made … will have to be carefully considered and certainly will be voted on by this body,” he said, while warning against any unnecessary spending, including previously approved expenditures that haven’t yet been made. “I want all those within earshot to understand.”
The governor’s budget director, Wayne Hammon, immediately advised all state agencies of the spending halt. It’s not yet clear what will be affected, but possible targets include millions for replacement Idaho State Police patrol cars, major deferred maintenance projects at the University of Idaho that could get deferred again, and $100,000 for the Tax Commission to replace cars auditors are driving that have more than 100,000 miles on them apiece.
The Legislature’s revenue-assessment committee recently proposed a revenue estimate for the coming year that’s $101 million less than the governor’s already-bleak prediction. That would force lawmakers to cut that much more from Otter’s proposed budget, dip deep into rainy-day funds to make up the difference, or raise taxes.
State Sen. John Goedde, R-Coeur d’Alene, co-chair of the revenue committee, said economists and representatives of industries and agencies who testified relayed a bleak message. “Certainly if this committee is going to err, the error should be on the side of caution.”
State Rep. Shirley Ringo, D-Moscow, responded, “I don’t consider taking too big a slice out of our potential revenue to be erring on the side of caution, particularly when you look at programs that we need to move our state toward recovery.”
But others on the budget-writing panel spoke out for caution. State Rep. George Eskridge, R-Dover, said he’s “inclined to believe that the (revenue) committee’s report may even be too optimistic. … I’ve talked to too many people in my district that are unemployed, out of a job, looking for a place to work.”
Sen. Nicole LeFavour, D-Boise, is calling for re-examining the scheduled $15 million bump-up of Idaho’s grocery tax credit, which is scheduled to rise to $40 from $30 next year for most Idaho taxpayers, and to $60 from $50 for the low-income. Otter wants to continue the increase as scheduled. If it continues to increase each year, it’ll reach $100 per person by 2015, which would roughly offset what Idahoans now pay in sales taxes on groceries.
Goedde said the economic news his committee received was filled with uncertainty. So even though the governor, Idaho universities and the state Tax Commission projected higher revenues, the committee picked a lower number.
State Rep. Frank Henderson, R-Post Falls, said, “I’m optimistic that we’ll find a way to get through this. On the other hand, I am an experienced budgeter and I know it is much more prudent to accept a conservative view and work with that number, than it is to let some blue-sky factor into our decision.”
January’s tax revenue numbers will provide more information, Cameron said, before the budget committee has to pick a firm target for next year’s budget. The joint committee is scheduled to finish budget hearings and start setting budgets Feb. 23.
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