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Eye on Boise: Denney gets a do-over on his budget

Idaho Secretary of State Lawerence Denney, a former longtime lawmaker and former speaker of the House, complained that lawmakers “gutted” his budget this year when they left out funding for an election technology upgrade. Now, they’ve changed course and approved the funding, with conditions. (Betsy Z. Russell / The Spokesman-Review)
Idaho Secretary of State Lawerence Denney, a former longtime lawmaker and former speaker of the House, complained that lawmakers “gutted” his budget this year when they left out funding for an election technology upgrade. Now, they’ve changed course and approved the funding, with conditions. (Betsy Z. Russell / The Spokesman-Review)

Eight days after a stunned Idaho Secretary of State Lawerence Denney said lawmakers had “gutted” his budget, the Joint Finance-Appropriations Committee did a re-do, and relented on providing $1.2 million in one-time funds next year for an elections system technological upgrade.

Denney said the upgrade is needed to launch a new statewide, online, searchable campaign finance system in time for the 2020 presidential election, as recommended by a legislative interim working group on campaign finance reform and ethics.

“It was always the committee’s intent, I believe, to appropriate the $1.2 million,” said Rep. Neil Anderson, R-Blackfoot, who made the successful motion in the joint budget committee on Friday. “The question was whether we could hold off and do that later in the next fiscal year through a supplemental request or not.”

JFAC has been pushing this session to apply more scrutiny to big technology requests, a move that includes bringing on some technical expertise within the JFAC staff starting in the next budget year, which starts July 1. The joint committee also backed legislation, which has now passed both houses, to create a technology stabilization fund, into which general funds are transferred, from which it appropriates major investments into tech upgrades; that separates them out for more scrutiny. That’s where the $1.2 million would come from for the election upgrade next year.

Anderson said he and other JFAC members met with Denney on Thursday.

“We had a very cordial meeting,” said Rep. Rick Youngblood, R-Nampa, “and we talked about this piece of software and where they’d like to go.”

“It appeared the timing was in conflict,” Anderson said, “so we thought we’d go ahead and do that now to remove any questions.”

The new budget approved for Denney’s office includes the $1.2 million for the software upgrade, but not an additional $90,000 in ongoing operating funds that he’d requested for the system, nor an additional cybersecurity position Denney had requested for his office. “It may come up later on during the year, when we’ve had more of a chance to see how things shake out in some of our other changes at the state level,” Anderson said.

The newly re-set budget also includes language requiring Denney to report to JFAC in detail on the “merit, need, cost, compatibility and maintenance of the elections system upgrade,” and also provide period updates and reports when requested by the Legislative Services Office.

Youngblood said, “I think we got there, with the idea that they will work with us and we will work with them.”

Denney said the new system – which would make campaign finance reports from both local and state candidates available in a free, centralized, searchable database, a big step up from the current system – needs to be up and running by Jan. 1, 2020, to be available for the March 2020 presidential primary. The system was recommended by a legislative interim working group this year that backed more frequent and more detailed campaign finance reporting, and also was recommended for funding by Gov. Butch Otter. Denney said it’ll take his office 12 to 15 months to get the system in place.

“I can’t commit money unless I have an appropriation,” he said.

Higher child tax credit?

New legislation to increase the Idaho Child Tax Credit contained in the earlier House- and Senate-passed tax cut bill from $130 per child to $205 per child – at an estimated cost of $25 million a year – was introduced in the House Revenue and Taxation Committee on Friday.

House Majority Leader Mike Moyle, R-Star, told the committee, “That should pick up just about all if not all of the concern on the larger families.”

Under the $200 million-plus income tax cut bill that’s already passed both houses, families with three or more children would actually see an increase in their Idaho state income taxes, due to the interplay between federal tax code changes and Idaho’s tax laws. The $130 per child tax credit sought to partially offset that, but it would take $287 per child to fully offset it.

“It’s a step in the right direction,” Moyle said. “Would I like it to be higher? I think obviously everybody would. … There’s a balancing act.” He called the amount “prudent.”

The new bill is sponsored by Moyle, House Speaker Scott Bedke, and Senate Majority Leader Chuck Winder. Moyle said it was negotiated between House and Senate GOP leaders with involvement from the governor’s staff. Friday’s vote clears the way for a full hearing on the bill.

Idaho tax revenues are up

Idaho’s state tax revenues in February came in a whopping 36.3 percent ahead of forecasts, or $44.3 million ahead – marking the fourth consecutive month that general fund receipts have exceeded forecasts. Receipts have been ahead of forecasts every month so far this fiscal year except one, October 2017.

For the fiscal year to date, state general fund tax revenues are running 5.7 percent ahead of forecasts, and 12 percent ahead of the same time period last year.

February is one of the smallest months for state tax revenue; but both January and December before it, which are the 2nd and 3rd highest, respectively, also showed big gains. April is the month in which Idaho takes in the most in tax receipts, as Idahoans pay their state income taxes.

For the month of February, every category was ahead of forecasts, with individual income tax showing the strongest growth.