January 20, 2014 in Idaho

Alternative Idaho budget would boost schools

By The Spokesman-Review
 
Different priorities

The alternative state budget unveiled Monday, based on calculations by the state’s former longtime chief economist, calls for:

- Cutting $144.1 million from Gov. Butch Otter’s proposed budget, by dropping $71.7 million in proposed additional deposits to state savings accounts and $30 million for unspecified tax cuts, and estimating $42.4 million in state savings from accepting federal Medicaid expansion funds.

- Adding back in $127.8 million: $34.5 million to boost the public school budget; $58.3 million for raises averaging 4 percent for state workers and teachers; and $35 million to restore cuts to Medicaid services for the disabled imposed in 2012.

- Though the state’s rainy-day funds wouldn’t be boosted as much, they’d still come to about 10 percent of next year’s budget under the plan.

The full proposal is online here.

BOISE – Idaho could spend tens of millions more on its public schools, grant raises to teachers and state workers restore cuts to services to poor disabled residents and still balance its budget next year with 10 percent to spare, the state’s former longtime chief economist said Monday.

Mike Ferguson joined with two former state school superintendents – Jerry Evans, a Republican, and Marilyn Howard, a Democrat – to release an alternative state budget that would boost school spending next year by 8.3 percent, instead of Gov. Butch Otter’s proposed 2.9 percent. The three were joined by two members of Otter’s school reform task force, urging lawmakers to consider the plan.

Evans, who is tied for the longest-serving Idaho schools chief ever at 16 years, said he listened to Otter’s State of the State message, and, “I was astounded at the higher priority for rainy-day funds and for tax relief, while all along proclaiming that education is our highest priority.”

The proposed alternative budget would leave out an additional $71.7 million Otter wants to deposit into state savings accounts, along with $30 million the governor designated for possible tax relief, such as income tax cuts for corporations and top earners or an increase in the property tax exemption for business equipment.

Rep. Maxine Bell, R-Jerome, said skipping those items “does free up a fairly good-sized amount of money.” But, she said, “When the governor gave his budget, those were priorities.”

Bell noted that lawmakers who served during the recession know how far the state had to reach into savings, “having been down so far and taken so much money to hold on.” She said, “I don’t think not having the tax relief is a very big issue. It’s the right thing to do when you can. I think the difficult part will be backing off on the amount of savings, because of where we’ve been.”

Idaho lawmakers approved $20 million in tax cuts last year by removing much of the property tax from business equipment; a year earlier, they granted $35 million a year in permanent tax cuts by lowering the top income tax rate for the highest earners and for corporations.

But school budgets have been crimped since the recession. This year, 94 of the state’s 115 school districts have turned to voters for local property tax increases to help fund operations, and 39 districts have gone to a four-day school week to save money.

Howard, who was Idaho’s elected state schools superintendent for eight years, said everywhere she goes in the state, “People come up to me to tell me how unhappy they are with the way that state government is treating our schools.” She said, “Harm has been done.”

Even with the boosts outlined under Ferguson’s plan, Howard noted, Idaho’s public schools still would get less money from the state next year than they got in 2009.

Ferguson said he analyzed the governor’s budget and prepared an alternative “that reflects a different set of priorities.”

Senate Education Chairman John Goedde, R-Coeur d’Alene, was intrigued by the proposal. “It sounds like something I’d like to see the numbers on,” Goedde said. “It’s an interesting coalition, if Jerry Evans and Marilyn Howard are both on board.”

Goedde said he’d like to see an “impartial” review of the proposal from legislative budget analysts, but warned that he worries about federal funding to the state dropping in the future. “When that money dries up, we’ll find ourselves in a terrible mess,” he said. “Now, that doesn’t mean that we need to pour all the money into the rainy-day funds that the governor has suggested, but I just remember what it would’ve been like if we had not had a rainy-day fund in the last economic downturn, and it would’ve been disastrous.”

Both Bell and Sen. Dean Cameron, R-Rupert, the Senate co-chair of the Legislature’s joint budget committee, said they’d be glad to have their committee’s non-partisan analysts review the plan.

“That’s a reasonable idea,” Cameron said.

Evans said the percentage of Idaho’s per-capita income that goes to education has been dropping for years. “That is in a state where per-capita income is also going down, which doubles the impact,” he said. “It is time for the public to notice. … It seems to me that as we approach this year, our economy is beginning to improve. … It is time to begin to reverse what has been going on for so long.”

Sen. Shawn Keough, R-Sandpoint, vice-chair of the budget committee, said she’s heard concerns from people in her district. “There certainly is support for funding more of the cost of the K-12 education system from the state level, and less on the property owners,” she said. “That’s a consistent message.”

Ferguson, who retired from the state in 2010 after 25 years as its chief economist, now heads the Idaho Center for Fiscal Policy, a non-profit funded by the Northwest Area Foundation whose mission is to provide information and analysis regarding the state’s finances.

“In the 1990s, when we collected more of the revenue we needed, our economy grew faster than almost all other states,” Ferguson said. “Today, after more than a decade of reduced investments, that trend has reversed. Idaho is now the second poorest state in the nation with the highest percentage of minimum wage jobs, and we invest substantially less in education than all but one other state.”


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