January 7, 2010 in Idaho

Otter backs mid-year cuts for Idaho schools

By The Spokesman-Review
 
Betsy Russell photo

Gov. Butch Otter, joined by GOP legislative leaders and state budget officials, holds a news conference Thursday morning.
(Full-size photo)

Eye on Boise
Follow Betsy Russell’s Idaho statehouse coverage on her Eye on Boise blog.

BOISE - Idaho Gov. Butch Otter on Thursday declared his support for additional mid-year budget cuts that would hit schools along with all other state operations.

Otter said he’ll include further holdbacks, beyond the 4 percent he trimmed from the current year’s state budget in September, in the budget he proposes to a joint session of the Legislature on Monday. But he stopped short of imposing the cuts immediately — something GOP legislative leaders have urged him to do for the past month.

“It’s a necessary joint effort by myself and the Legislature,” Otter said. “We’ve worked on a few things. We don’t have total agreement. … I thought it was best to put that in the executive budget.”

When Otter made a mid-year cut in the state budget in September, he called for exempting public schools by tapping into the state’s budget reserves for $49.3 million. Neither the governor nor legislative leaders envision any such protection this time.

Instead, Otter endorsed a proposal made by House Speaker Lawerence Denney and Senate President Pro-Tem Robert Geddes: To hit school districts with any additional cutbacks that are imposed, but allow them to borrow from their state appropriations for next year if they need it.

“They can borrow against future income,” Otter said. Some districts have reserves that they can tap in the event of a budget cut, “but a school district that doesn’t have reserves, that’s when the mechanism that Bob and Lawerence” designed would kick in, he said.

Minority Democrats oppose the proposal, saying they weren’t consulted. Senate Minority Leader Kate Kelly, D-Boise, called it a plan to “mortgage your child’s future, borrowing from a reserve fund that doesn’t have that much money in it to begin with.”

The state’s Public Education Stabilization Fund, a reserve account for schools, now contains about $23 million. Otter said that’s the money districts could borrow, though the state also will have to be prepared to cover costs if Idaho’s student population grows. School districts then would repay the fund from their state appropriations for next year.

House Minority Leader John Rusche, D-Lewiston, noted that more than 20 Idaho school districts already have declared financial emergencies after this year’s budget cuts, and more could follow.

State Schools Supt. Tom Luna, a Republican like Otter, has warned against further cuts in school funding. The governor’s comments came during a news conference with GOP legislative leaders just days before he’ll unveil his budget during his State of the State address on Monday.

“On Monday we will be announcing for 2011 a no-growth budget,” Otter declared, saying the idea is that any mid-year holdbacks would be permanent. He noted that even though he’s not imposed additional holdbacks on the current year’s budget since September, state agencies have been put on notice to be ready for additional cuts of around 2 percent. Otter declined to specify the amount of additional cuts until his speech on Monday. His September cuts left an estimated $51 million shortfall remaining in the state budget, though the state also has more than $200 million in budget reserves, including the school fund.

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