BOISE - Idaho lawmakers are moving toward much deeper budget cuts next year than Gov. Butch Otter already recommended, despite official state economic forecasts suggesting the cuts may not be needed.
The Legislature’s joint budget committee voted 15-4 Friday, along party lines with the panel’s four Democrats objecting, to approve a budget target that calls for an additional $56.73 million in budget cuts next year. Otter already had called for targeted cuts across most state agencies totaling $35.04 million.
Sen. Dean Cameron, R-Rupert, co-chairman of the Joint Finance-Appropriations Committee, said even though the state economic forecast is for 6.9 percent revenue growth in 2012, “The co-chair and I felt like it was more prudent to budget at a 3 percent level. We felt more comfortable that we could actually hit that number.”
That’s the same assumption Otter made when he crafted his budget. The difference between 6.9 percent revenue growth and 3 percent: $91.5 million.
The total budget cuts lawmakers are now anticipating, between Otter’s $35.04 million and the Legislature’s additional $56.73 million: $91.77 million.
That means if the 6.9 percent forecast proves correct, virtually none of the cuts are actually needed.
“Do I like what some of those cuts are going to look like? No,” said Sen. Shawn Keough, R-Sandpoint, JFAC vice-chair. “But I think it’s far more prudent to be realistic about what the budget’s going to be.”
Cameron said Idaho’s spent all its budget reserves - it no longer has any margin for error.
Sen. Nicole LeFavour, D-Boise, objected that the budget target means lawmakers are assuming the state will have only 3 percent growth next year, when revenue growth so far this year is already at 4.8 percent. LeFavour said the economy is recovering, not souring. “I guess I find that pretty pessimistic and pretty low,” she said. “I wouldn’t mind so much if there weren’t so many lives in the balance. … I don’t think that ‘caution’ that puts lives at risk is really maybe the most prudent thing.”
Rep. Shirley Ringo, D-Moscow, said, “I think that it’s artificially low, and it forces us into making cuts to programs which are substantial. There are certain agencies that absolutely can’t sustain those cuts.”
Keough, however, said, “I was here … when we had to do (mid-year) holdbacks.” She said she’s heard consistently from state agencies, including schools, over the years that they want lawmakers to “set the number, even if it’s low - don’t turn us upside down in the middle of the year.”
Here’s what’s changed in the state revenue’s assumptions since Otter released his proposed budget in January: Lawmakers have rejected Otter’s plan to count in $33 million in excess revenues collected early this year as a cushion for next year’s budget; that figure subsequently fell and is now at $10.2 million, but it’s zeroed out in the budget target. The cost of partially conforming Idaho’s state income tax code with IRS changes, about $10.5 million this year and $9.6 million next year, wasn’t reflected in Otter’s budget. And legislative figures for transfers from various funds are a bit lower than anticipated in the governor’s budget, plus there’s a $1 million expense for disaster recovery in the military division that hadn’t been anticipated.
The bottom line is that, compared to the governor’s budget recommendation, legislative estimates show a $56.73 million shortfall. That assumes the governor’s recommended line items will be funded and his $35 million in varying budget cuts to state agencies are made.
The additional cuts are roughly 2.2 percent of the state budget. If spread evenly among all state agencies - Otter’s cuts weren’t - the result would be an additional cut for public schools of $27.3 million below Otter’s recommendation. Because enrollment growth and other factors were built into the governor’s budget, that’d be $5.7 million less for schools than this year’s budget.
For colleges and universities, the additional budget cut beyond the governor’s budget would come to $4.7 million. The dollar difference from the 2011 appropriation for colleges and universities would be $7.6 million.
Cameron said he’s not predicting Idaho will see less growth next year than this year. “What we’re saying is … this is the number we’re confident in,” he said. “We hope it’s 6.9. We’d love to be wrong. But … the consequence of us picking too high a number and then having to make holdbacks to public schools or Medicaid is much more severe than to make those difficult choices up front.”