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School cuts inevitable, Otter says

Thu., March 12, 2009

Governor calls stimulus funds a short-term fix

BOISE – Gov. Butch Otter is endorsing cuts in public school funding in Idaho, saying the $1.2 billion in federal economic stimulus funds he’s decided to accept won’t stave them off.

Otter also called Wednesday for sticking to plans lawmakers endorsed earlier – before the federal stimulus bill passed – to cut 5 percent across the board from personnel costs statewide.

Asked on Tuesday about the prospect of school budget cuts when the state stands to receive stimulus money, Otter said: “Yeah, sure it bothers me, but I understand why. Because these are all ongoing needs and they can’t all be satisfied by this one-time plug of money.”

Otter said he still liked the idea of keeping reserve funds intact.

“It’s still good to have that rainy-day fund – it’s still good to have that equalizer between what-if and what-if-not,” he said. “And I’m still convinced that this thing isn’t going to be over within just one or two years.”

Under Otter’s recommendations, the biggest chunk of the stimulus money would be about $409 million for health and welfare programs; $260 million for public schools; $36 million for higher education.

Otter also recommends spending about $160 million in stimulus funds for unemployment benefits and work force development; about $62 million for environmental quality projects; $200 million for transportation; $15 million for public housing, low-income housing and homelessness prevention; and $97 million for other state government programs.

His announcement followed the Legislature’s first formal action to spend the federal money, channeling some into this year’s public schools budget. The Joint Finance-Appropriations Committee voted unanimously to cut this year’s budget for public schools by $85.1 million but immediately fill the hole with an equal amount of stimulus money. The cut was required to qualify for the replacement money.

Lawmakers had planned to fill that hole with money from the state’s $114 million public education stabilization fund to prevent any midyear cuts. Now that reserve fund will stay intact for use later.

The move was one of a series legislative budget writers approved Wednesday, which also included a boost to this year’s Medicaid budget thanks to the increase in federal Medicaid funding included in the stimulus bill.

That change will prevent the Health and Welfare Department from having to carry over $16 million in expenses from this year into next and will cover $4 million in other anticipated cost increases. But it won’t head off the 6 percent cuts in Medicaid that lawmakers have decided to make this year.

Overall, the change means Idaho will spend $52 million less in state funds on Medicaid this year, between the increased federal matching funds and the cutbacks, which include reduced hours of service for some patients.

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

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