BOISE – Gov. Butch Otter appealed to Idahoans on Friday to send him their ideas on how the state can save money, as one Idaho lawmaker called for a tax increase to avoid drastic cuts in education, Medicaid and other state services.
State Rep. Shirley Ringo, D-Moscow, and Moscow economist Judy Brown sent a letter to newspaper editors calling for a temporary tax increase to head off a “train wreck” of cuts in state services. They proposed a 5 percent income tax surcharge, which would cost a family of four with a $76,000 household income $162.
“I just think we should have a full-blown debate about all the pros and cons, and not just have the knee-jerk anti-tax reaction,” said Ringo, who noted that when Idaho last faced a serious state budget shortfall, then-Gov. Dirk Kempthorne persuaded lawmakers to enact a temporary, two-year sales tax increase to avoid cuts to education.
Otter has been staunchly opposed to a general tax increase, though he’s championed various fee increases and last year called unsuccessfully for a gas tax increase to fix the state’s roads.
“The governor’s been very clear – we’ve said that we have to live within the people’s means,” said Otter’s press secretary, Jon Hanian.
Otter on Friday unveiled an “efficiency” Internet site – at http://efficiency.idaho.gov – laying out details of the state’s budget and calling on Idahoans to submit their money-saving ideas.
“We need your help,” Otter wrote in the Web site’s introduction. “Some changes made at the agency level already are making a difference – travel restrictions, more use of video-teleconferencing and other available technologies, more consolidating of responsibilities, leaving job vacancies unfilled, and even such things as reducing the use of paper and other office supplies. But more needs to be done.”
Hanian said all ideas will be reviewed and considered. “We’ve got a pretty big hole to fill, and we’re casting our net pretty broadly,” he said.
In September, Otter ordered nearly $100 million in midyear budget cuts after state tax revenue fell $151 million short in the current year’s budget. That still leaves a gap of more than $50 million, though the state has more than $200 million in budget reserves. Lawmakers are anticipating a difficult time setting a balanced budget for next year with declining tax revenues and no boost from federal economic stimulus money, which helped balance Idaho’s state budget this year.
Ringo said she’s concerned that cuts to higher education, Medicaid, parks and other programs could do “more damage to the economy than not.”
Senate President Pro Tem Bob Geddes, R-Soda Springs, said he can’t see the Legislature supporting a tax hike. “I can’t imagine that would sell well right now,” he said.
House Minority Leader John Rusche, D-Lewiston, said his caucus hasn’t taken a position. “Nobody is rushing forward to say we need to increase taxes,” he said. “What people are starting to say, though, is, ‘Gee, what happens when we don’t have the revenue and we have these services, many of which people think are vital? What do we do?’ I think that’s the kind of question that people are starting to have.”
When the Legislature approved the temporary sales tax increase at Kempthorne’s behest – after the longest-ever legislative session in state history in 2003 – it boosted Idaho’s sales tax from 5 percent to 6 percent for two years. Three years later, lawmakers permanently increased it to 6 percent to provide property tax relief.
Rusche said that means another temporary sales tax hike “probably isn’t viable.”
Ringo said people in her district, in which the University of Idaho is a major employer, already have felt the impact of state budget cuts. “I have gotten messages even from people that I consider rather conservative indicating … that the cuts have gone far enough,” she said.
She and economist Brown estimated that a 5 percent income tax surcharge would raise $44 million a year.
Hanian said Otter has been meeting with legislative leaders to figure out the state’s budget direction and has another meeting next week.
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