BOISE – Gov. Butch Otter says it’s time to slash Idaho’s government back to what it was five years ago – because the state’s tax revenue has declined to the level of 2003-’04.
As state lawmakers prepare for difficult budget decisions in January, Otter warned them Wednesday that he wants Idaho’s tax system kept stable, that he opposes a temporary tax on wealthier residents, and that he wants to protect education as much as possible.
Otter noted that the Idaho Constitution requires the state to provide public schools. “It’s pretty simple – that’s a principle that our founders decided to put in the constitution, and you know, it’s not a principle that I can argue with, because a well-educated citizenry in all cases is our first line of defense in retaining this republic,” he said.
The governor spoke to several hundred legislators, lobbyists, business people and local officials at the annual Associated Taxpayers of Idaho conference Wednesday, a traditional run-up to the legislative session often attended by dozens of lawmakers.
He said he was the only one of nine siblings to graduate from college. “My parents … they wanted a better life for us, and they knew that getting a good education was a threshold over which they had to go in order to get there,” Otter said.
But House Speaker Lawerence Denney, R-Midvale, told the Associated Press that he expects cuts in education again after this year’s unprecedented 7.7 percent reduction in general fund support for public schools. “The only way to balance the budget without raising taxes is to cut public education,” Denney said. “That’s always very difficult.”
Senate Majority Caucus Chairman Russ Fulcher, R-Meridian, said lawmakers this year will be looking at difficult budget cuts in the very areas where people least want them – education and health services – because they make up most the state budget. “Everything is on the table,” Fulcher said. “The one thing I will guarantee you is we will make someone mad.”
House Majority Leader Mike Moyle, R-Star, asked, “Do you think this is the time to hammer Idaho families with an additional tax? They’re losing their jobs. … It’s tough out there.”
Rep. Shirley Ringo, D-Moscow, last week called for a temporary income tax surcharge of 5 percent on Idahoans who make more than $50,000 a year to avoid cuts she contends will hurt the economy even more. Her proposal, which would cost a family earning $76,000 a year just over $160, would raise $44 million a year.
Otter dismissed the idea, saying, “Those who are successful ought to be celebrated and rewarded. … I would resist the effort to start class warfare.”
He also derided the idea of temporary tax increases, like the 1-cent temporary sales tax hike enacted under former Gov. Dirk Kempthorne in 2003. A year and a half after the increase expired, lawmakers decided to raise the tax permanently to fund property tax relief.
“Let’s be honest about the history,” Otter said. “Putting a new tax on is like getting a tattoo, folks: You don’t get rid of that very easy without some serious trauma.”
Otter’s budget director, Wayne Hammon, told the group not to expect big new initiatives from Otter this year, and instead to expect budget cuts, possible restructuring of state agencies, and even possible sales of state real estate.
Otter said any expansions of state government since 2003-’04 will be examined to see if they’re required by law or the constitution; if not, they’ll be considered for elimination.