November 15, 2010 in Idaho

Idaho’s state budget outlook grim

By The Spokesman-Review
 
Betsy Russell photo

Members of the Idaho Legislature’s joint budget committee hear budget news on Monday
(Full-size photo)

BOISE – Idaho state lawmakers got a grim glimpse of the decision-making that awaits them when they convene in January, as the Legislature’s joint budget committee gathered Monday to go over figures suggesting it could face a shortfall in the hundreds of millions.

It’s not that state tax revenues are falling farther behind – in fact, they’re running ahead of projections. The Joint Finance-Appropriations Committee learned Monday that October’s state tax revenues came in $8.8 million ahead of projections, for a year-to-date surplus of $22.8 million.

But this year’s state budget was propped up with $340.2 million in federal economic stimulus money, one-time shifts and state reserve funds, all of which will be gone when lawmakers set the budget for next year, fiscal year 2012.

State tax revenues are projected to grow 4.7 percent this year, but some lawmakers are leery of the figure and think it’ll be less. And even if the forecast is correct, the lack of reserves and stimulus funds plus millions in urgent new funding needs point to a big likely shortfall, unless the economy starts to boom or Idaho makes some changes – either sharply slashing state services again, or raising taxes.

“We can’t spend money we don’t have,” said Sen. Joyce Broadsword, R-Sagle, who said the state may have to eliminate some programs that are “not as effective as others.”

“We have to see where we may be able to do less,” said Sen. Shawn Keough, R-Sandpoint, JFAC co-chair.

Rep. Shirley Ringo, D-Moscow, disagreed. “We’re in a culture of timidity with respect to taking the responsibility to match revenue to meet our needs,” she said. “I think in part the role of this committee should be to identify those things that we think we responsibly have to provide, and supporting that we have to find the means to do that.”

All three serve on JFAC, which reviewed an initial funding request Monday for the single largest slice of the state budget – public schools – that called for making permanent the entire $128 million in historic budget cuts schools saw this year.

State Superintendent of Schools Tom Luna said he hopes the economy will improve and some of those cuts can be restored, but he said the request showed lawmakers that even if per-pupil spending is kept where it is this year, they’ll still have to spend tens of millions more just to stay even next year. That’s because Idaho expects to have 5,000 more students next year, and also has to plug holes in the school budget that this year were filled by federal stimulus money and other one-time funding sources.

Wayne Hammon, Gov. Butch Otter’s budget chief, said even that bare-bones budget outline was “realistic,” and called Luna’s proposal to replace all one-time funds in this year’s school budget with state general funds next year “a very ambitious goal” in light of the overall budget outlook.

Sen. Jim Hammond, R-Post Falls, who also serves on JFAC, groaned, “Why would anybody want to be on JFAC this year? It’s going to be hard.”

Hammond, a former school principal, noted that the state constitution requires the Legislature to fund education. He said, “I guess I’m still hoping that we’ll find something out there that’ll help us avoid cutting deeper.”

Tuesday, the joint committee will hear presentations on likely shortfalls in funding for Medicaid, state prisons, colleges and universities.


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