January 24, 2010 in Idaho

Budget cuts can be costly

Idaho risks losing federal funds by trimming certain programs
By The Spokesman-Review
 

2010

Legislature

BOISE – Idaho is discovering the hidden costs of budget cuts.

One example: The $1.6 million the state would save by cutting off funding for Idaho Public Television may be less than the amount IPTV has to repay the federal government for portions of $4 million in grants. The grants paid for equipment to convert the statewide TV network to digital signals, and if the equipment isn’t used for its intended purpose for 10 years, repayments are due.

Another: Gov. Butch Otter’s initial proposal to eliminate the state Department of Parks and Recreation and sell its headquarters building sought to save $10 million, but it could have cost the state the landmark Harriman State Park, likely worth $50 million. That’s because the Harriman family’s gift of the park to the state was contingent on Idaho setting up a professional parks department.

On Friday, Otter dropped the plan in favor of a more modest proposal to cut costs at state parks and lay off 25 employees of the agency.

And at the state Department of Health and Welfare, every $1 cut in state funds means losing $3.75 in federal money, too. Budget cuts there over the past two years have cost the state $120 million in federal funding.

“I don’t know if it matters to a lot of people that there are these hidden costs, but I kind of hope it does,” said Steve Shaw, a political scientist at Northwest Nazarene University. “It looks like somebody didn’t do their homework.”

Another possible explanation, Shaw said, is that the cuts may be more about ideology than fiscal realities. “What do we think government should be doing?” he asked. “It seems like an increasing amount of people on the Republican side in the state Legislature, especially in the Idaho House, think, well, not much.”

Jon Hanian, spokesman for Otter, said the state has never had to make such deep cuts in its budget. “We can no longer continue to fund the same level of government that we have for many, many years,” he said. “That’s where we are.”

Two former state budget directors say it’s very difficult to make big cuts in Idaho’s budget. “Once you get to a certain point, it’s darn hard to make cuts without hurting yourself in the long run,” said Mike Brassey, who served as budget director for Republican Gov. Phil Batt.

Marty Peterson, who was budget director for Democratic Govs. Cecil Andrus and John Evans, said, “I think the lesson is thoroughness in analyzing decision options. … These are complex programs, especially any time you have the federal government involved and they’re getting large amounts of federal money.”

That’s the case with the state Department of Health and Welfare, where Otter’s recommending a small increase in state funding next year, from $462 million this year to $483 million in fiscal year 2011. But that’s still well below the state’s budget for Health and Welfare two years ago of $504 million – at a time when caseloads for public assistance programs are soaring.

Brassey said that when he served under Batt, he successfully eliminated the state Department of Labor and Industrial Services without incurring any hidden costs. But the move was aimed more at reorganization than budget-cutting; it cleared the way for establishment of the state Department of Environmental Quality. (Idaho limits the number of state departments to 20.)

Some functions were transferred to other agencies; some were eliminated. “In fairness, I had been over at the department for a month or two filling in” while the director was ill, Brassey said, so he was intimately familiar with the agency. “Maybe that helped.”

Otter proposed to eliminate the state’s Soil Conservation Commission next year to save $1.3 million, but an interim legislative committee that’s been working on the plan hasn’t found any good way to do that.

“You just can’t go out and eliminate the commission,” said House GOP Caucus Chairman Ken Roberts, R-Donnelly, who’s co-chairing the interim committee. The commission helps local soil conservation districts around the state with technical support to get federal grant money, he said, bringing millions in grants to help farmers protect water quality and preserve natural resources.

Roberts said the committee is now focusing on developing a better administrative structure for soil conservation, which he said may or may not save money.

“What you’ve got is a program that’s been in place for 70 years,” said Roberts, one of the Legislature’s most fervent budget-cutting advocates. “Probably one of the most efficient uses of government money we have is soil conservation programs.”


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