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House Speaker Lawerence Denney said today that he supports an investigation into the actions of state Tax Commission Chairman Royce Chigbrow, amid allegations that he used his official position to help clients of his son's accounting firm and to help a friend in a business dispute. "Those are some very serious allegations against the chairman, and if he's found guilty I think the best he can hope for is to resign," Denney told Eye on Boise. "But again, they are allegations." Click below for a full report from AP reporter John Miller.
The first question for Idaho Department of Labor official Bob Fick after he presented data about jobs to the Legislature's economic outlook committee came from Rep. Janice McGeachin, R-Idaho Falls, who didn't ask about the economy - she related the case of an employee her business had fired in which she was dissatisfied with the department's ruling on unemployment eligibility. Fick responded that if she'll get him some specifics, "We'll have somebody, the benefits bureau chief will look into the case and explain exactly why what happened happened."
Other lawmakers, including Rep. Frank Henderson, R-Post Falls, and Rep. Nicole LeFavour, D-Boise, asked about various issues impacting job growth in the state.
Bob Fick of the Idaho Department of Labor told the Economic Outlook & Revenue Assessment Committee, "Idaho's job loss since the recession began was among the worst nationally and regionally." Idaho ranked sixth nationally for job loss, second only to Nevada in the region. From October of 2007 to October of 2010, Idaho lost 8.1 percent of its jobs. Washington, by comparison, lost 4.6 percent.
With record numbers of Idahoans drawing unemployment, unemployment payments have helped keep the workers in Idaho, Fick said, and "have done a little bit to help ease the economic drag of this recession." Current forecasts show that Idaho's employment won't return to pre-recession levels until 2014, Fick said. "The outlook is for growth, but very limited growth."
The first presentation to the Economic Outlook & Revenue Assessment Committee is from state Division of Financial Management economist Derek Santos, who told the panel, "The good news is the recession is over." The bad new, however, he said, is "the recovery has been slow. … The growth in the economy is going to be modest."
Personal income declined in Idaho in 2009, and then was flat in fiscal year 2010, Santos said. "We think that'll pick up," he said. "We think it'll grow by about 3.4 percent in the next two years, fiscal years '11 and '12. By historical standards, pretty modest." Other measures also are showing signs of only modest growth, he said.
The Legislature's Economic Outlook & Revenue Projection Committee has convened, with Co-Chair Rep. Cliff Bayer, R-Boise, saying the group has a "formidable challenge before us." Co-Chair Sen. John Goedde, R-Coeur d'Alene, told Eye on Boise, "I would hope that the tone of the presentations is guardedly positive, because I think we're seeing the first signs of a real recovery - except for jobs. But what we're going to have to do, is we're going to have to temper what we're hearing with the fact that the state's revenue stream drags behind recovery. So I think this is going to be a lean budget year, but I think from here forward we will see steady increases in revenue - not large increases, but we'll see steady increases in revenue for the next few years."
He added, "I guess I feel better about it this year than last, again because I think we can see light. I think the worst is behind us. Everybody can miss lunch if they realize that they're going to have dinner." You can see the presentations to the committee and listen online here.
When an as-yet unnamed person bought a winning Mega Millions lottery ticket in Post Falls, that winner not only hit a $190 million jackpot - he or she triggered a jackpot for the state, too, House Tax Chairman Dennis Lake noted. That's because lottery winnings are taxable under Idaho's state income tax. "That's going to be about $15 million that we'll see in a windfall for the state," Lake said, turning to Senate Finance Chairman Dean Cameron, "Dean, spend it wisely," he said.
The $15 million is the taxes due on $190 million. If the winner opted for the lump-sum payout of $120 million, Idaho state income taxes would be a little over $9 million.
House Tax Chairman Dennis Lake, R-Blackfoot, will sponsor legislation this year backed by an array of health groups to raise Idaho's cigarette tax by $1.25 a pack. If approved, the increase is expected to bring about a big drop in smoking, particularly among young people - plus a boost to the state Medicaid budget. "We're fortunate enough that a lot of other states have done this so we know what the experiences are," said Heidi Low of the American Cancer Society of Idaho. "Those estimates are conservative." Asked whether a big cigarette tax increase will just push Idahoans to buy their smokes on tribal reservations within the state, Lake said, "The tribes indicated that they will raise it the same rate that we raise it."
The final panel at today's AP Legislative Preview is addressing revenue and budgeting. House Rev & Tax Chairman Dennis Lake said the question of taxation of online sales will come up again. "This is not a new tax - this tax is owed," he said, "and a lot of us are not paying it." Senate Finance Chairman Dean Cameron, R-Rupert, said, "This'll be my 20th year. I don't recall ever feeling more challenged than I feel coming into this session." Rep. Wendy Jaquet, D-Ketchum, said, "My priority is investing in education," which she called the "real driver" of economic growth.
Asked about the state's contribution to unemployment through the 2,800 state jobs eliminated since 2006, legislative leaders had a variety of responses. House Speaker Lawerence Denney said, "I just have to just add one thing. It takes 11 private-sector jobs to provide the funds for one public sector job, so I think that's a distinction that we need to make. Yes we are contributing to the unemployment by downsizing government, but on the other hand we're actually increasing the amount of revenue we have available."
House Minority Leader John Rusche, a physician, said, "A lot of what the state does is not hire employees, it's purchase services in the private sector, particularly in the health care world. It's not just the 2800 state employees. It's the health care providers, it's the educational providers, it's people who own gravel pits, it's all of those things that end up having less jobs, and we do what we have to do, but I just think that we have to be conscious." Rusche noted that if the state's Medicaid program is cut by $150 million, the impact is tripled by the lost federal matching funds when state funding is eliminated. "So that's $450 million, $500 million less a year into the health care industry," he said. "Any idea how many jobs that is? It's a lot. It's about 4,000 or 5,000."
Mentioning issues that will come up in this year's Legislature, Senate President Pro-Tem Brent Hill said, "You might see some changes in the state Tax Commission and how it's organized." Hill said he didn't think that would come as a surprise to anyone.
Other issues mentioned by legislative leaders: Changes in the state's tobacco tax; changes in the violent sex offender registry to meet new requirements; urban renewal; wolves; states' rights; Medicaid; and jobs. There's also been discussion about possible immigration legislation.
Legislative leaders, who are now addressing reporters at the AP Legislative Preview, say a tough legislative session lies ahead. "If you've got a price tag, we've told our legislators, please leave it in your drawer until a better time," new Senate President Pro-Tem Brent Hill said. Money will be the main topic of the session, he said. "We're going to be pretty grouchy, particularly by the time this session is over. We're probably facing the worst year coming up that I've ever seen." House Speaker Lawerence Denney said, "There could be a considerable hole to fill this year and we'll have to fill that hole either by making additional budget cuts or finding additional revenue. And either one of those options is going to be very difficult. I suspect that we will find someplace in the middle that we meet."
Senate Minority Leader Edgar Malepeai said, "If we're going to solve the problems … it's going to require a collaborative effort." The governor will play a key role, he said. House Minority Leader John Rusche said, "Make no mistake, what we do now sets us on the road to the future."
In his remarks to reporters today at the AP's legislative preview, Gov. Butch Otter answered "no comment" when asked if he's asked his current state Tax Commission chairman, Royce Chigbrow, to resign. Otter also said, in response to a reporter's question, that the state is reviewing its contract with Corrections Corp. of America over the troubled prison operation at the Idaho Correctional Center south of Boise, but gave no details. "We are reviewing it to see where we can improve it, but I'm not prepared to tell you … that we have some changes that we're going to make and what those changes are."
Asked about expected budget shortfalls, Otter said, "I think there are some things we're going to be offering up that I've already spoken to the legislative leadership about, the Joint Finance-Appropriations Committee about, some changes that we can make that … could lessen that shortfall having made those changes," he said. "But I've also heard the shortfall is as little as $120 million and as much as $500 million. So I guess that's still anybody's guess."
Gov. Butch Otter, speaking to reporters at the Associated Press Legislative Preview today, suggested he'll take a tight-fisted approach to the coming year's state budget when he unveils his plans to lawmakers on Monday. "What Idaho has done over the last couple of years has really become very fashionable, and that is cutting budgets," Otter declared. "I think we can expect that to continue."
However, he did not flatly rule out some form of tax increase to cope with anticipated shortfalls next year. "The Legislature, of course, in the Rev and Tax committees are free to look at anything that they want to look at, but it's going to have to be based upon some pretty strong merit," Otter said.
The joint legislative committee that sets the revenue estimate for Idaho's next state budget convenes on Thursday at 1 p.m., and its task is a weighty one: Figure out what's going on in Idaho's economy, and agree on a tax revenue forecast for fiscal year 2012 that's realistic. "For the most part, we're amateurs at economic forecasting, but we're good listeners," said Sen. John Goedde, R-Coeur d'Alene, co-chairman of the Economic Outlook & Revenue Assessment Committee. "We listen to presenters who are supposed to be a fair reflection of Idaho's revenue streams, the businesses that contribute to our revenue stream. … I think if you look at past performance, that the Economic Outlook Committee has done as well or better than economists that have done their own predictions on our revenue stream."
Since 1999, the joint revenue committee's estimate has matched the governor's Division of Financial Management revenue forecast every year but the last two. In both of the last two years, the committee has set its projection lower than the governor's, and, as a sharp economic downturn hit, actual collections slipped even lower. So far this year, since the start of the 2011 fiscal year on July 1, Idaho's tax revenues have been coming in ahead of projections, and were $30.9 million ahead by the end of November. But lawmakers have been skeptical of the administration's estimate of 4.7 percent revenue growth this year.
On Thursday, the committee will hear from DFM, the Idaho Department of Labor, and representatives of paper manufacturers, Realtors, contractors and more. On Friday, the panel will meet from 8 a.m. to 4 p.m. with an array of public and private sector representatives and financial experts making presentations (with a break to attend the noon inauguration on the Capitol steps). The panel is set to make its decision on Jan. 13; you can see its agenda, read background information or listen live to the meeting online here.
Rep. Marge Chadderdon, R-Coeur d'Alene, will miss the first three weeks of the legislative session for cancer surgery, and her daughter, Julie, will fill in for her. "The first three weeks are the rules, which I can follow somewhat on the computer," Chadderdon said today. She'll go in for surgery at Kootenai Medical Center on Friday, and hopes to come to Boise and pick back up her legislative duties a few weeks later even if she has to undergo chemotherapy; she's already discussed possible arrangements with her doctor. "We'll kind of play it by ear," she said. "It could be four to five months of chemo. It might not bother me. Some people, they don't get sick or anything."
The fourth-term lawmaker, who won re-election in November, said her daughter, who served six years as the Region 1 chair for the Idaho Republican Party has served on the party's state central committee, was a natural choice for a substitute. "She's been around a lot of the legislators from here, so I'm sure she'll do fine," she said. "She knows a lot of people."
Chadderdon, 74, said her cancer was detected just a few weeks ago in a routine screening test. "The doctor was pretty upbeat," she said.
She is the second lawmaker this year to name a substitute for the start of the session due to cancer treatment; Rep. Pat Takasugi, R-Wilder, has named Gayle Batt as his sub while he undergoes treatment. Idaho's legislative rules allow a substitute to be appointed when a lawmaker is ill or unable to attend, to avoid leaving that lawmaker's district without a vote; it's a system few states share. "I think our system works well," said House Speaker Lawerence Denney. "You can see the possibility for abuse, that everybody wants to set in for a week, but that really hasn't happened."
The House, at long last, has announced its committee assignments and adjourned. They include a shakeup in chairmanships. Click below for the complete list.
There’s still been no announcement in the House on committee assignments or even on chairmanships, but word is starting to dribble out. Rep. Bob Nonini confirms that he’ll continue to chair the House Education Committee. “I’m glad,” Nonini said. He said he had lunch with Senate Finance Chairman Dean Cameron, R-Rupert, today, and discussed how JFAC wants to hold joint meetings with the House and Senate education committees this session in the Capitol Auditorium, to involve the germane committees more in policy decisions that go along with budget-setting.
Rep. Cliff Bayer, R-Boise, said he’ll no longer be on JFAC, but will be moving to the House Revenue & Taxation Committee. “It is by choice,” said Bayer, who made an unsuccessful run for leadership, challenging House Majority Leader Mike Moyle R-Star.
The open committee chairmanship created by the retirement of House Judiciary Chairman Jim Clark of Hayden Lake this year reportedly will go to Rep. Rich Wills, R-Glenns Ferry. He was the Ways & Means Committee chair; that’s reportedly going to go to Rep. JoAn Wood, R-Rigby, the House’s longest-serving member. She was the House transportation chair; that spot reportedly will go to Rep. Leon Smith, R-Twin Falls. But nothing’s for sure until it’s read across the desk when the House convenes, which should happen shortly. Word is that the holdup now is that the minority party still is finalizing its committee assignments, and majority leaders are holding off on announcing theirs in case the Democrats’ decisions require them to make adjustments.
It’s still hurry-up-and-wait time in the House, where the majority leadership was huddled behind closed doors much of the day trying to figure out committee chairmanships and assignments. Now, chairmanships reportedly have been worked out, but there’s been no announcement, and representatives are lining up in the hallway outside leadership offices to put in their choices for office space and committees. Assistant Majority Leader Scott Bedke, R-Oakley, estimates the House is about half an hour away from settling it all.
The Senate is back on the floor, and is reading over the desk its committee assignments and chairmanships for the 2011 legislative session. Click below for the full list. Here, the committees appointed to inform the House and the governor that the Senate is organized and ready for the session report back, a final step before adjournment of the organizational session, at least on the Senate side.
The Idaho Senate has named all its committee chairs, and three are new: Sen. Monty Pearce, R-New Plymouth, will chair the Resources & Environment Committee; Sen. Joe Stegner, R-Lewiston, will chair the Local Government & Taxation Committee; and Sen. Jim Hammond, R-Coeur d’Alene, will chair the Transportation Committee. All other standing committee chairmanships remain the same as last year. The Senate is now working on committee assignments, and appears to be making substantial progress. In the House, the majority leadership is ensconced behind closed doors and there’ve been no announcements at all.
Sen. Jim Hammond, R-Coeur d’Alene, is the new chairman of the Senate Transportation Committee. He said he’ll be the first transportation chair from North Idaho in some time. “It’s exciting to have that position and be able to advocate for our roads issues up there,” Hammond said. “We’re the third-largest county in the state. We need to continue to advocate for our needs up there, so it’ll be great to have a platform to do that.”
Hammond will give up his seat on the Joint Finance-Appropriations Committee to take on the transportation chairmanship. He’ll also continue serve on the Local Government & Taxation Committee and the agriculture committee.
Hammond said he was glad the governor’s transportation task force didn’t call for tax or fee increases in the coming year to improve transportation. “I think it would just be butting up heads right now to try to do anything,” he said. “Because I’m on Health & Welfare, I get a lot of folks that are really hurting - the last thing we need to do is create a tax that’ll take any more money out of their pockets when they’re struggling to even put food on the table.”
The Senate gallery had eager onlookers this morning, watching as senators picked their new seats in the Senate chamber - many were family members of the senators, including spouses, kids and grandkids. After seat selection and other formalities were done, the Senate recessed until 3 p.m. to allow time for committee assignments. Senators were asked to stay close so they could be found and called into leadership offices as that progresses. Meanwhile, the House has gone at ease at the call of the chair, which means it could go back into session at any time to announce committee assignments and chairmanships, though that’s not likely to happen before late afternoon. House Speaker Lawerence Denney said he expects the process to be completed today, rather than stretching into tomorrow.
The Senate has now convened, sworn in its members, and formally elected Sen. Brent Hill, R-Rexburg, as the new president pro-tem of the Senate. Next up is seat selection, in order of seniority.
Rep. Bob Nonini, R-Coeur d’Alene, didn’t win his race last night for leadership, challenging House Majority Caucus Chairman Ken Roberts, R-Donnelly, but Nonini said this morning, “I was glad I put my hat in the ring. I think our caucus deserved choices.” He said he was proud of Rep. Cliff Bayer, R-Boise, for running as well; Bayer unsuccessfully challenged House Majority Leader Mike Moyle. Nonini said he thought having choices was “good for the system.”
He said, “If they keep me as chairman of the education committee, its going to be another tough year.” That’s because of the likelihood that rather than just adding intent language to budget bills in the Joint Finance-Appropriations Committee, JFAC will more heavily involve germane committees in policy decisions that accompany budget cuts. “I feel I have the experience in the four years I chaired that committee,” Nonini said.
AP reporter John Miller has this overview of GOP leadership battles in the House and Senate, which will be decided in party caucuses on Wednesday night:
“Secret balloting on Wednesday evening is set to determine if Idaho Senate Republicans will turn to conservative newcomers for guidance — or stick with more-established leaders. All four Senate leadership posts are in play, as President Pro Tempore Bob Geddes’ decision to step down from the Senate’s top post last week helped spur lawmakers in his chamber to seize the moment. Meanwhile, change appears less likely in the House, but GOP Majority Leader Mike Moyle and Caucus Chair Ken Roberts each face a challenge from an established GOP lawmaker with sights on bigger things. With Republicans controlling more than four-fifths of the Legislature after picking up five House seats Nov. 2, these leadership races are significant, because just who is in charge helps determine which issues become priorities.”
Click below for his full report; leadership votes also are scheduled Wednesday night in the House and Senate minority caucuses; Senate Minority Leader Kate Kelly, D-Boise, didn’t seek re-election, leaving her post open; nor did House Assistant Minority Leader James Ruchti, D-Pocatello.