BOISE – When Gov. Butch Otter divided state agencies into three groups for varying levels of budget cuts, some wondered why elected officials made the top “critical and constitutionally required services” group, while higher education was in the middle “essential services” group and water resources and environmental quality were in “other services.”
The top group saw new mid-year budget cuts of 2.5 to 5 percent; the “essential” middle group, mostly 6 percent; and the “other” group, mostly 7.5 percent.
Wayne Hammon, Otter’s budget director, said, “Everybody started at the bottom of the list, at 7.5 percent.” Then, each agency’s proposals for cutbacks were examined, causing some to move up to the groups with smaller cuts.
Public health districts, for example, were in the biggest-cut group during last year’s holdbacks, Hammon said, but this year they’re in the middle group. “With H1N1, health districts are going to have a lot of work to do this fall,” he said.
The governor can’t actually impose mid-year budget cuts on other elected officials, including the Legislature and the judicial branch, but he asked the other officials to voluntarily participate in the cutbacks, trimming at least 2.5 percent. All agreed, with the governor’s office, the state treasurer and the lieutenant governor volunteering to go further and take 5 percent cuts.
Early versions of the cutback plans tried to hold higher education, and others in the middle group, to a 5 percent holdback, but Hammon said that would have meant pushing the bottom group up to 9 or 10 percent cuts.
“This was the one that seemed to be the best balance,” he said.
A tiny bit of good news
It’s not huge, but state officials are pointing to a germ of good news in the latest economic data: Economic activity in four Idaho metro areas, Coeur d’Alene, Lewiston, Pocatello and Idaho Falls, rose in 2008 for the second straight year, according to the latest estimates from the U.S. Bureau of Economic Analysis.
Overall, Idaho’s gross state product was up 1.2 percent to $52.7 billion in 2008, from 2007; it had risen 7.3 percent from 2006 to 2007. Idaho Department of Labor Director Roger Madsen called the figures “good news for the stability of much of our economy.”
The state’s largest metro area, the Boise-Nampa area, however, saw a decline in 2008 of nearly 1 percent. That was driven by a slowdown in construction and layoffs in manufacturing, especially in high-tech.
A costly seat belt law
Idaho is losing out on $4.5 million in one-time funds available for highway safety because lawmakers have refused to stiffen the state’s seat belt law, state lawmakers learned last week.
The state also is missing out on another $5 million to $6 million because the state hasn’t attained 85 percent seat belt use; another $1 million for not having a primary-offense seat belt law; and $250,000 for not eliminating the nursing-baby exemption from the state’s child safety seat law. That money all would have come in this year and would have been for highway safety improvement.
The joint legislative committee that received the briefing, however, declined to make any recommendations on that score; their main task was to debate whether gas tax money should be shifted from the state parks department and state police to road work. They opted for a one-year delay on that.
ITD making cutbacks
The Idaho Transportation Department has announced an $8.6 million holdback on its own department budget – a 3.4 percent cut – even though it wasn’t required to participate in Gov. Butch Otter’s mid-year budget cuts because the agency receives no state general funds. ITD Acting Director Scott Stokes said the move came because ITD’s revenues are falling short, mainly in fuel taxes.
“We recognize that our revenue is failing to meet expectations and believe that reducing our budget by $8.6 million is a prudent business decision,” Stokes said. “We will continue to monitor department revenue to determine if additional changes might be necessary.”
The cut will come from the contract construction program, but the funds being cut hadn’t yet been tagged for any specific projects, the department said. Spokesman Mel Coulter said fuel tax revenues to the department have continued to decline at a time when they normally kick up from the summer travel season.
“I think what we’re seeing is the public is doing the same thing we’re doing, and that is they’re having to continually monitor their expenditures and be very frugal with the money they have,” Coulter said. “We’re in that same position.”
Gas prices fall – elsewhere
The American Automobile Association of Idaho says gas prices in Idaho are the ninth highest in the nation and they’re “refusing to budge,” even as prices are falling in other states.
“The peak driving season is over and prices in the rest of the country have dropped from their seasonal highs in most regions of the country, but not here,” said AAA Idaho Public Affairs Director Dave Carlson.
Idaho’s average price for regular gas is $2.71, AAA reported last week, within a penny of its level for the past month. National average gas prices have dropped 14 cents in the past month, to $2.53. Things are even worse up north, AAA noted, with gas in Sandpoint and Lewiston at $2.83 and Coeur d’Alene at $2.75.
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