February 13, 2010 in Idaho

More cuts approved for Idaho’s budget

Panel accepts lowered state revenue forecast
By The Spokesman-Review
 

Revenue slip

The Joint Finance- Appropriations Committee voted to accept the recommendation of the Joint Economic Outlook and Revenue Assessment Committee, which set expected state tax revenues for this year at $2.28 billion, and for next year at $2.29 billion. That’s $69 million below the governor’s proposed budget for this year, and $59 million below the budget he submitted to lawmakers for fiscal year 2011.

BOISE – Idaho lawmakers continue to prepare for the worst.

The Legislature’s joint budget committee on Friday voted to make an additional $69 million in cuts this year, on the assumption state revenues will continue to lag well below projections.

“It’s only realistic and it’s only prudent,” said Rep. George Eskridge, R-Dover. “The word I get from my constituents is, ‘George, do the right thing, and that means no tax increase. … We can’t afford it.’ ”

Gov. Butch Otter supports the move, said his budget chief, Wayne Hammon. “The number that we based our budget on is now 3 months old, and unfortunately tax receipts have not kept in line with his forecast,” he said.

Asked how this year’s budget could be cut another $69 million, Hammon said, “There are places to do it. The big fear is that we’re way past cutting fat.” These cuts, he said, citizens will feel. “They are serious decisions at this point. … The governor’s already notified agencies to be prepared for that.”

The Joint Finance-Appropriations Committee voted to accept the recommendation of the Joint Economic Outlook and Revenue Assessment Committee, which set expected state tax revenues for this year at $2.28 billion, and for next year at $2.29 billion. That’s $69 million below the governor’s proposed budget for this year, and $59 million below the budget he submitted to lawmakers for fiscal year 2011.

Sen. Shawn Keough, R-Sandpoint, urged those who can to donate to their local food banks, homeless shelters and other entities that help the needy. She noted that her North Idaho district is seeing high unemployment and few new job prospects.

“Our government is funded by the Idaho taxpayers, and we can’t extract from them what they do not have,” she said.

Minority Democrats on the committee argued for higher numbers to avoid such drastic budget cuts and stick with state economists’ forecasts, but were outvoted along party lines.

“We all know what’s needed to move Idaho’s economy ahead – jobs and consumer confidence – and our actions today will set the tone,” declared Rep. Shirley Ringo, D-Moscow. She and other Democrats argued that steeper budget cuts will mean more lost jobs for the state and more harm to the economy; she submitted a “contingency plan” to the committee that would raise additional revenue by hiring more tax auditors to collect uncollected taxes, tapping reserves, and adding taxes on cigarettes and soda pop, should tax revenues fall short.

But Sen. Dean Mortimer, R-Idaho Falls, said, “We are in tough times. … I think it’s going to take every bit of our savings as well as maybe more to get us out of fiscal year 2010.” The decision came despite news this week that the governor’s chief economist, Mike Ferguson, has determined there’s no reason to revise his latest revenue forecast. Otter’s proposed budget for next year already was set $83 million below Ferguson’s forecast, just to be on the safe side.

It’s now up to JFAC to make the cuts. Keough said she and other JFAC members are working to protect public schools from any cuts this year, although they’d then be hit with cuts next year, and it would mean even deeper cuts in other areas this year.

“It’s going to be a very, very difficult budget,” said Senate Finance Chairman Dean Cameron, R-Rupert.


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