BOISE - Idaho Gov. Butch Otter closed the books on a tough budget year for the state Tuesday, saying the final numbers - an $8.26 million year-end shortfall, which was easily covered - justify his and lawmakers’ decisions to make deep mid-year cuts in the state budget this year.
“Some people vigorously opposed our cautious, conservative approach to budgeting, and some still do,” Otter said. “They glom on to every inflated projection, urge us to spend millions of dollars in make-believe money, and have nothing but contempt for any other view. Fortunately for Idaho taxpayers, common sense and a steadier hand carried the day.”
Otter’s Democratic challenger, Keith Allred, contended Otter was “missing the point,” and said he backed the cuts for the past year, but not deep cuts to education that Otter and lawmakers approved for next year. “The governor was wrong to build next year’s budget based on the assumption that it will be as bad economically as this year,” Allred said.
GOP lawmakers blasted their Democratic counterparts, who backed higher revenue projections than the gloomy ones Republicans favored at the start of this year’s legislative session. “Today’s budget numbers confirm that the Democrats were wrong,” said House Majority Leader Mike Moyle, R-Star. “If left unchecked, they would have spent us into financial ruin.”
Idaho made up its year-end shortfall by transferring $8.26 million from its permanent building fund, money that otherwise would have gone to building maintenance projects. June state tax revenues fell $6.9 million short of projections, after May revenues came in $4 million above projections, but there were bigger shortfalls earlier in the year. Overall, revenue for the fiscal year that ended June 30 was $86.5 million below the state’s official forecast, at 2.26 billion - lower even than the $2.28 billion figure lawmakers adopted.
Otter acknowledged that the budget was balanced in part through pushing off some Health and Welfare payments into the next fiscal year. He compared that move to a family paying the minimum payment on a credit card balance in tough times. He also noted that state agencies suffered deep cuts and many state workers took unpaid furloughs.
“The budget is balanced,” Otter said. “There were some tough decisions.”
“The Legislature and I did what any family does when facing financial trouble,” Otter said, “we looked for savings, we thought about what we could do without, and we made do with less. We lived within our means, and we didn’t raise taxes.”
He noted that public schools were protected from most cuts in the past year, but in the next fiscal year, Idaho’s public school budget is facing an unprecedented $128 million budget cut.
“We would’ve liked to have given them more,” Otter said. “We’ve made that commitment that as the economy recovers, education in Idaho is going to be our No. 1 priority.”
However, that $128 million budget cut can’t be stopped now without legislative action; lawmakers don’t convene their session until January of 2011, halfway through the next school year.
Sen. Shawn Keough, R-Sandpoint, vice-chair of the Senate Finance Committee, joined the governor at the news conference, and said, “During this last session in particular, the Legislature and the governor took a lot of criticism for what is now seen to be their prudent approach to budgeting.”
Keough said the cuts impacted Idahoans’ lives, but the impact could have been worse if the state had opted for tax hikes “at a very difficult time for many Idaho families.”
After this year’s budget struggles, Idaho’s only remaining budget reserve funds now are $17.5 million in the public education stabilization fund, and $71 million in the tobacco-settlement Millenium Fund, which lawmakers and the governor chose to keep as a reserve in case a federal funding boost for Medicaid doesn’t come through.