Otter will accept $1 billion stimulus

Citing all-or-none conditions, he’ll ‘hold my nose’

BOISE – Despite national reports that Idaho Gov. Butch Otter was among a few governors who would reject federal stimulus money, Otter said Friday that he’ll take most – if not all – of the cash.

“I’m gonna hold my nose, and I’m gonna take it,” he told the Idaho Press Club.

The transportation money, in particular, carries strings that require the state to accept all or none of it, Otter said. “If you reject one dollar of that, they take it all – so you’ve got to reject all of it or none of it.”

The remainder of Idaho’s roughly $1 billion in stimulus funds is mostly for either education or health and human services, and Otter said he’ll rely on guidance from state schools Superintendent Tom Luna and state Health and Welfare Director Dick Armstrong on those funds. Luna is calling for accepting “every penny” of the education funds, and Armstrong built his Medicaid budget around the anticipated federal help.

“I’ve never said that I wouldn’t take any of the stimulus package,” Otter said. “It’d been my druthers that they didn’t do it in the first place, and didn’t do it the way they did it. You know, if you’d put it all into jobs creation or jobs retention, to me that would have been much more acceptable.”

But with the money on its way, Otter said he’s ready to take it, providing it doesn’t obligate the state to replace the federal funds when they end by raising state taxes. The education and health and welfare funds Idaho stands to receive add up to $625 million, Otter said. Replacing that would require a 50 percent increase in Idaho’s sales tax – from 6 cents a dollar to 9 – or a boost in the state income tax rate from the current 7.8 percent to 11.5 percent.

On Monday, Otter will meet for the first time with a committee he’s appointed to help him analyze the stimulus, including three former governors and three former state budget directors.

“I’m a long way from believing that the government should always be in a position to spend a lot of money in order to stimulate the economy,” said Otter, a first-term Republican governor whose political philosophy has long had a libertarian bent. As Idaho’s 1st District congressman, he was one of only three House Republicans to vote against the Patriot Act on civil liberties grounds.

Otter said that well before the stimulus bill passed, he co-signed a letter with two other governors “to say, ‘This is not a good idea.’ ”

Then, he said, he and several other governors asked, “If we don’t take the money, can you then absolve our states from having to be in a position to pay it back? … For instance in Idaho, I think we pay about $4.5 billion in federal income tax, our citizens do. So if I don’t take a billion dollars, why wouldn’t you give the citizens of Idaho a billion-dollar holiday for one year off their income tax?”

Amid laughter, Otter said, “Well, they didn’t buy that.”

He said he also looked into whether he could “barter these funds” with other states, say, trading highway landscaping money to another state that wants it in exchange for bridge-replacement or concrete and asphalt money for Idaho.

“They said, ‘No, you can’t barter it either,’ ” he said.

So he’s taking it.

Asked by reporters if he agreed with conservative radio host Rush Limbaugh’s recent statements that he hopes President Barack Obama will fail, Otter said no.

Otter, who said he hadn’t heard Limbaugh’s speech, said, “I don’t share that. Spending billions of dollars and getting nothing from it … I think it’d deepen and lengthen and maybe even go into a depression if we failed.

“So for my part, I’m gonna do all I can to get as many people working and get as many people confident that they can participate actively in this economy by getting ’em jobs on building bridges and roads and water systems for rural Idaho. … I think we can create a lot of jobs. A person gets a job, that whole family suddenly gains confidence in tomorrow. … I believe that’s the kind of hope everybody had for the idea of the stimulus package when it was first mentioned.”

Betsy Z. Russell can be reached toll-free at (866) 336-2854 or For more news from Boise go to

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