Idaho governor to make budget announcement

BOISE – Idaho Gov. Butch Otter has scheduled an announcement for this morning on the state budget, just days before he’ll unveil his proposed budget Monday to a joint session of the state Legislature.

His move comes after weeks of speculation among state lawmakers about how to fill a $51 million budget hole that was left over after Otter cut $99 million from the state budget in September. Many legislators are calling for further cuts even before the session starts.

“We know that we’re going to be short of funds this year, and the sooner we get the agencies started up to make the savings, the better it will be,” said state Rep. George Eskridge, R-Dover, a member of the Legislature’s joint budget committee.

The state also has more than $200 million in various budget reserve funds, but many lawmakers are concerned they’ll need that money to balance next year’s Idaho state budget, after this year’s budget was balanced with the help of millions in one-time federal stimulus funds.

House Speaker Lawerence Denney and Senate President Pro-Tem Robert Geddes sent a letter to Otter on Dec. 7 saying an additional across-the-board holdback was needed on all state agencies including public schools. In September, Otter called for sparing schools from the midyear budget cut by tapping $49.3 million state reserves.

The two legislative leaders proposed making loans to school districts that can’t handle the additional cuts – but the districts would have to pay the money back out of their budgets for next year. Geddes told The Spokesman-Review that Otter chose not to impose additional budget cuts then because of the timing, with the holidays looming and the Legislature set to convene in just weeks. Now, he said, “At this point it doesn’t matter.”

Whether the governor imposes new cuts or lawmakers consider them when they convene next week, Geddes said, the result is the same.

Wayne Hammon, Otter’s budget director, said Wednesday that Otter and legislative leaders “have been in unprecedented consultation for months, and tomorrow we’re going to talk about some of the things we agree on – we don’t agree on everything.”

House Minority Leader John Rusche, D-Lewiston, said minority Democrats haven’t been consulted. Some of the shortfall may warrant further cuts, he said.

But, he said, “In places where it really impacts the economy, I don’t think it’s reasonable – that’s what reserves are for.”

Idaho’s budget year runs from July 1 to June 30, so making cuts when half the year’s already gone by has bigger impact.

Rather than holding off on planned projects, for example, agencies might have to resort to furloughs and layoffs, measures that already have hit at many agencies since the September cuts.

Ironically, a joint legislative committee Wednesday heard hopeful news from Otter’s chief economist.

Although Idaho was hit early and hard by the current recession, it appears to have hit bottom, economist Mike Ferguson told the committee, which is taking testimony on the economy and state revenues.

“Things do look as though they’ve turned a corner,” Ferguson said.

Said Hammon: “For the first time in a long while, we are beginning to see positive signs.”