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After years of relentless growth, Idaho lawmakers received a budget request for the state’s Medicaid program Tuesday that’s nearly flat in state funds, and just a 7.6 percent increase overall - even though the program is expected to add roughly 70,000 new recipients next year due to changes in federal laws. You can read my full story here at spokesman.com. The slower growth is mainly because Idaho’s caseload numbers in the health care program for the poor and disabled have stopped climbing so quickly as the state’s come out of the recession; it’s also because federal funds are up, meaning the state can spend less. Idaho’s federal matching rate for next year is going up, to the tune of $11.8 million.
It also in part reflects an overfunding of the program last year, when more growth was anticipated than actually came through. That prompted the program to turn back $46 million to the state general fund unused; officials say a new claims system is now allowing more accurate forecasts.
Sen. Shawn Keough, R-Sandpoint, vice-chair of the Joint Finance-Appropriations Committee, welcomed the slowing in the program’s growth, but cautioned, “The devil’s always in the details.” She said, “My focus tends to be less on the numbers, and more on the delivery of services to those who need it.”
What if Idaho’s Legislature only met for a short, maximum 60-day session in even-numbered years, to set a budget, and then held longer sessions of up to 150 days every other year? That’s the proposal from new Sen. Branden Durst, D-Boise, who introduced a resolution today calling for the change. “I wanted to basically mimic what they’ve done in Washington state,” Durst said. “The reason is because we’re dealing with some pretty complicated issues, and we’re all citizen legislators.” In the alternate years when there were longer sessions, he said, lawmakers would have more chance to learn about and fully debate the issues, and they wouldn’t be doing so during an election year. “We could come to a more informed decision, which is better for the state,” Durst said.
Durst, who turned 33 today, said it’d also be better for those lawmakers who are employed, to know for certain how long they’d be gone from work for lawmaking duties. “It’s very frustrating for an employer not to have the certainty,” he said. Durst said he was employed the year he served in the House during the near-record 117-day session in 2009, but “I wasn’t employed the next session.” His firm let him go in December of that year. “They didn’t want to go through that again,” he said.
Durst also gave the opening prayer in the Senate chamber today. “Our chaplain’s gone for the week,” he explained. “Two members of the majority have offered the last two. They said, ‘Does anybody want to?’ and I was glad to volunteer.”
Durst also introduced another personal bill today, a measure that would require legislative authorization before the State Board of Education could pass rules requiring online classes for high school graduation. The reason: When the State Board repealed the last online course graduation rule, after voters rejected the “Students Come First” school reform laws, several board members said they still thought online classes should be required, and that they should revisit the issue in a few months. “My opinion is they’re tone-deaf,” Durst said. He said voters were clear on that issue when they rejected Proposition 3 on Nov. 6 by a two-thirds margin.
The first-year experience for the Department of Health & Welfare’s “Money Follows the Person” program to move patients from institutional care to home and community care, where appropriate, has resulted in 64 patients making such moves, Paul Leary, Medicaid administrator, told JFAC this morning. Sixteen moved from intermediate care facilities to the state’s developmentally disabled waiver program; 47 moved out of nursing homes and went on the aged and disabled waiver program in the community; and one moved out of a facility and now just gets the state’s enhanced Medicaid benefit. These are all patients who are aged, blind or disabled; it’s a grant-funded demonstration project. Next year will be the third year of the five-year demonstration grant, which provides transitional services and supports as patients make the moves. Next year's grant funds total $555,300.
“I think so far we’re very encouraged,” Leary said. For a patient in an intermediate care facility, Medicaid spends $94,063 a year; in a nursing home, $72,350 a year; on the DD waiver in the community, $55,382; and on the aged and disabled waiver in the community, $22,814.
The first bill to come out of committee and hit the House floor this session has stalled. HB 1, the annual IRS tax code conformity bill, was voted out of the House Revenue & Taxation Committee last Thursday and sent directly to the 2ndReading Calendar of the House without the usual step of holding a public hearing on the measure in committee. Idaho passes a bill each year to adjust its tax provisions to match IRS codes to avoid making taxpayers recalculate things between their state and federal returns, but sometimes the measures are controversial, and sometimes the state chooses not to match all the IRS provisions. This year’s bill has a fiscal impact of $6 million on the state general fund, meaning the state will collect that much less after conforming its tax provisions.
The bill is being “held at the desk” in the House, which means that the speaker has halted it. Asked about the move, House Speaker Scott Bedke, R-Oakley, said, “It came straight to the 2nd reading, and it expends money. … If we’re going to spend money, we probably oughta have a public hearing.” Bedke said he’s probably going to send the bill back to the committee for a hearing.
Later in the day, when the House convened, Bedke did just that. He said afterward that other House members had questions about the bill. “The new people were paying attention, and they had some questions,” he said. “I think it's best we get in the habit of, we have a hearing. We've got time.”
Overall, Gov. Butch Otter is recommending $476.7 million in state general funds for Medical Assistance Services, or Medicaid, next year, which is nearly flat - just a 0.5 percent increase from this year. Total funds, at $2.0667 billion, reflect a 7.6 percent increase, largely because of increased federal funds. The total number of positions requested for the program actually falls by three from the current year, from 208 to 205; they’re down from 269 last year. In total, the governor’s recommendation for the entire Department of Health & Welfare, including Medicaid, is for 2,886 positions next year, up from 2,863 this year; that’s an overall increase of just 23 positions, or a 0.8 percent staffing increase.
The Medicaid program returned $46.3 million from its budget to the general fund this year, mainly because caseload growth, which was over 10 percent at times during the recession years, has been dropping, and is now predicted at less than 2 percent for next year.
Idaho’s Federal Medical Assistance Percentage, or FMAP – the rate at which the feds match state expenditures in the Medicaid program – will rise by part of a percentage in federal fiscal year 2014, which starts Oct. 1. Because the numbers are so big, that’s very significant. Idaho’s matching rate will go from 71.00 percent to 71.64 percent on Oct. 1. For next year, that means Idaho will get $11,786,200 more in federal funds for Medicaid, and will spend $11,786,200 less in state funds on the program. States with lower incomes get higher FMAP rates.
Idaho’s Medicaid program adds up to a total of $2.06 billion, between state and federal funds, Medicaid division administrator Paul Leary told the Joint Finance-Appropriations Committee this morning. It takes up 81.4 percent of the Department of Health & Welfare budget. But 96.4 percent of the total Medicaid budget goes to trustee and benefit payments. “These are services provided to our participants by community providers,” Leary said. Only 0.7 percent of the total goes to personnel, and 2.9 percent to operating expenses.
Among those on the Medicaid program, 63 percent are children, but they account for only 19.15 percent of the costs. “A small percentage of the Medicaid population encompasses the largest percentages of our costs,” Leary said.
Again this morning, the half of JFAC members who are first-timers on the joint budget panel have lots of questions about the budgets they’re being presented. Sen. Sheryl Nuxoll, R-Cottonwood, asked, “What is the child support program? What is its purpose?” H&W officials explained that the program enforces collection of child support orders from the non-custodial parent to the custodial one, to lessen the need for public assistance.
Sen. Steve Vick, R-Dalton Gardens, said, “On food stamps you mentioned they must be a citizen or a legal immigrant. It’ my understanding from my work on the Health & Welfare Committee that that’s not true for a child.” Welfare Division Administrator Russ Barron responded, “That’s not correct. Everyone eligible for food stamps must be a citizen or a legal immigrant. … Only the ones who are citizens or are here legally will receive a benefit.”
Rep. Marc Gibbs, R-Grace, had a different kind of question: Why did Barron tell JFAC this morning that Medicaid is likely to grow by about 60,000 people in Idaho, when yesterday, the joint committee heard that the figure was likely to be 70,320? “Are we talking about two different numbers and we don’t really know what the real number is - 60,000 today, 70,340 yesterday?” Gibbs asked.
Barron smiled. “Now you have some sense of what we have been going through,” he said. The larger, 70,320 figure is correct, he said. “The number is 70 as far as individuals who are eligible because of these changes. The reason I’m using 60, is there are 60,000 absolutely totally new people that today are not in the system,” as far as the eligibility system overseen by Barron’s division. “In the 70,000 number, it represents about 10,000 individuals in the CHIP programs that we already have. Now, there’s some work to convert them, but it’s not quite the same as those who have never been on before. The total number that we’re looking at is the 70.”
Idaho Division of Welfare Administrator Russ Barron explained the MAGI, or Modified Adjusted Gross Income calculations, that Idaho must comply with under changes in the national health care reform law. Those change the way eligibility is calculated for the existing Medicaid program, and likely will result in about 25,000 more Idahoans qualifying for Medicaid, Barron said. JFAC Co-Chair Maxine Bell, R-Jerome, commented, “I’m a little troubled by the acronym MAGI, I don’t exactly see the gold in there or the gifting of it.”
Between those mandatory changes and the “woodwork effect” that Idaho anticipates when more people become aware that they’re already qualified for Medicaid, another 35,000 or so additional Medicaid recipients could come in. To handle those increased eligibility determinations for 60,000 potential new enrollees, Barron said the division first estimated it’d need 88 more full-time positions. Then it revised that downward, and downward again, and again. Now, it’s at 22 positions. “I assure you that 22 positions is the absolute minimum amount needed to determine Medicaid eligibility” for the expanded program, he said. Without those positions, “Performance across all programs will diminish.”
Gov. Butch Otter has recommended funding the 22 positions. Overall, the Division of Welfare’s budget request for next year reflects a 6.4 percent increase in state general funds, to $2.4 million; in total funds, it’s a 4.4 percent increase to $6.08 million.
Idaho is one of just five states that requires all food stamp recipients to comply with its child support program, which enforces child support orders against non-custodial parents, to reduce the need for public support. But budget holdbacks in 2010 that cut 12 positions have ended that push, and Health & Welfare wants to bring it back. “Idaho’s child support program is the 9th most cost-effective in the nation,” Division of Welfare Administrator Russ Barron told JFAC this morning. “We would like to start doing this again for children receiving food assistance.” Barron said the division now believes it can bring that function back with just five of the 12 lost positions; they’re requesting funding for that next year, at $146,800 in state funds, with an equal amount of matching federal funds.
The Division of Welfare is up for its budget hearing this morning; the division touches one in three Idahoans, including 331,000 on food stamps, 300,000 in the child support program, and 298,000 in Medicaid, and numerous other programs. The division handles eligibility determinations for an array of programs including Medicaid; the Medicaid budget is up for review next this morning.
Conservative North Idaho Sen. Steve Vick has only been on the Legislature’s joint committee for a week, but on Monday, he said he saw a budget request that he views as more justified than others: Slightly raising Idaho’s low-ranking foster care reimbursements. “It seems to be one of those that’s more justified in my mind,” said Vick, R-Dalton Gardens, who once looked into becoming a foster parent himself.
He’s one of 10 first-time members on the Idaho Legislature’s 20-member budget-setting committee this year, a group that includes several who, like Vick, are suspicious of most increases in government spending. The panel on Monday began a week of budget hearings on state Health and Welfare programs, starting with child welfare. You can read my full story here at spokesman.com.
Click below for AP reporter John Miller's full report on how lawmakers in both the House and Senate balked today at voting on proposed new rules for use of the state Capitol grounds and surrounding areas, aimed at restricting public protests. The 39 pages of rules outline numerous restrictions, from hours to locations to types of activities and displays. “They micromanage behavior down to excruciating detail,” Barbara Pinkerton, a Boise resident and Occupy Boise supporter, told a House subcommittee. “It is extremely chilling on our free-speech amendment rights.”
Sen. Bart Davis, R-Idaho Falls, was worried that after-hours protests such as those that surrounded the Capitol in 2011 and targeted an education overhaul would fall victim to such limits. “The human chain around the Capitol, for lack of a better word, was intended to be symbolic,” Davis said. “I'm having a hard time understanding why we think it's appropriate for them to exercise their rights up to midnight on the front of the Capitol but we think it's inappropriate for them to express those speech rights on the east, west and north sides of the Capitol.” State Department of Administration Director Teresa Luna said security concerns had much to do with the time limitations. She also said the 2011 protests were extraordinary.
The rules stemmed from state efforts last year to restrict the Occupy Boise protest across the street from the state Capitol, which resulted in an ongoing lawsuit in federal court.
The House State Affairs subcommittee on rules of the state Department of Administration, chaired by Rep. Vito Barbieri, R-Dalton Gardens, took public testimony this morning on the proposed new rules for use of the Capitol grounds, and then voted to refer the rules to the full House State Affairs Committee for a hearing with public testimony, “with respect to the chilling effect of the First Amendment,” in Barbieri’s words. Monica Hopkins, attorney with the Idaho ACLU, told the lawmakers that the rules “violate the right of everyday Idahoans to peaceably assemble,” and also violate the First Amendment. Several other members of the public also spoke out against the rules, including former Boise City Councilwoman Anne Hausrath.
“Everyone who visits our state Capitol is affected by these rules,” Hausrath said, urging a full public hearing before any enactment. “Certainly we have rights under the U.S. Constitution. We also have extended rights under the Idaho Constitution, basically to consult for the common good and to instruct our representatives.” Others expressed concerns that the rules would be confusing for citizens to know what they can do or say where and when, and that they limit basic rights to do things like turn out at the Capitol for a candlelight vigil to mourn a tragedy.
Rep. Elaine Smith, D-Pocatello, moved to refer the rules to the full committee for a public hearing, and Rep. Ken Andrus, R-Lava Hot Springs, spoke in favor of the motion. “I’m comfortable with these rules, but there is a lot of concern that constitutional rights are being stepped on,” he said. “And I don’t think that, whether these rules are acceptable or not acceptable, we ought to take the approach to fast-forward them and prohibit the public from being engaged and involved. So I think it’s a good idea to have a hearing on these so people can express their concerns.”
Idaho’s Department of Health & Welfare, the state’s largest agency, has faced record caseloads, reduced workforce and cuts in benefits in recent years, Director Dick Armstrong told JFAC this morning as he gave an overview of H&W division budget hearings to come. Two-thirds of department’s funding comes from the federal government, and about a quarter from the state, he said. For next year, Health & Welfare is requesting $617 million in state general funds, a $7.3 million, or 1.2 percent, increase from last year. In total funds, it’s a 6.8 percent increase.
Armstrong noted that while most attention with regard to the national health care reform law has focused on state decisions on a health insurance exchange and expansion of Medicaid, aside from those issues, the law also makes a series of mandatory changes affecting all states that in Idaho will have the effect of increasing the state’s number of people eligible for Medicaid by approximately 70,000. “We are now gearing up, we are all hands on deck, to prepare for this huge increase of medically eligible participants,” Armstrong said. It'll mean a 30 percent caseload increase.
Idaho could lose huge amounts of its funding for its current Medicaid program if it didn’t comply with the changed rules, he noted. “We have to comply with the mandatory requirements that the ACA makes to Medicaid. The stakes are huge if we don’t.”
Another big change coming is that the ACA requires mental health parity for health insurance coverage in 2014, Armstrong said. That means almost everyone will have coverage for mental health treatment. But a gap remains at the community level, he said, because while treatment works, recovery depends on community support. “Our vision is to help communities develop the infrastructure and programs necessary to support the wellness of their residents who have mental illness,” he said.
Said Armstrong: “With almost everyone theoretically having mental health coverage in 2014, we have an unprecedented opportunity for improving the overall mental health system. We have been working on mental health transformation for over a decade, and this provides the best opportunity to make significant improvements if we approach it right.”
Amid many questions, the Senate State Affairs Committee has wrapped up its hearing this morning on proposed new use rules for the Capitol and its grounds without a vote, postponing that until its next meeting on Wednesday. Chairman Curt McKenzie said before voting, he’d like to hear from Monica Hopkins, ACLU executive director, on the lawsuit between Occupy Boise and the state over the rules and other issues. Also, several committee members needed to leave, but still have more questions. A subcommittee of the House State Affairs Committee is scheduled to consider the same rules this morning at 10.
You can read the rules here, which are in three dockets; they are on pages 7 through 46 of the 83-page PDF document. They don't apply to the interior of the state Capitol, but do apply to the exterior Capitol grounds and the interior and exterior of the rest of the Capitol mall.
Sen. Jeff Siddoway, R-Terreton, questioned state Department of Administration Director Teresa Luna as to why the department didn't conduct negotiated rulemaking on its controversial new capitol grounds use rules. “That to me seems like an abdication of the responsibility of the agency,” Siddoway said.
Luna responded, “We worked with Occupy Boise during mediation” involving the court case. She said the department's proposals were met with “much disdain. We did not feel that there was any hope whatsoever of coming to any sort of negotiated rulemaking with this process.” Siddoway said, “Is that legal, for an agency to not take on that responsibility?” Luna responded, “Mr. Chairman, it is, yes.”
Other senators on the Senate State Affairs Committee have had numerous questions this morning about details of the rules, including questions about restrictions on speech rights.
Trends in Idaho’s catastrophic health care fund show a big jump in reported cases in 2012, CAT fund Director Roger Christensen told JFAC this morning. The new case load was 4,363 cases in fiscal year 2010, 4,590 in 2011 and 6,491 in 2012. Mental health cases were a big driver of the 2012 spike, he said.
In fiscal year 2012, the county with the highest number of new cases was Ada with 1,610; Twin Falls was second with 1,366; Canyon was third with 906; and Kootenai was fourth with 817. (Note: Earlier, lower numbers that were posted here reflected only those county cases that crossed the $11,000-per-case threshold for state funding help; those below the threshold are entirely county-paid.)
New members of JFAC have lots of questions about the program, from who defines “medically necessary” services that are covered (it’d defined in law) to why caseloads are expected to go up (temporary programs that have covered some of the cases are expiring).
Idaho’s CAT program, which is 100 percent funded by state general tax funds and county property taxes, would likely go away if Idaho exercised its option to expand its Medicaid program almost entirely with federal funds. A working group appointed by Gov. Butch Otter studied that issue over the summer and unanimously recommended the Medicaid expansion to replace the CAT program, but Otter, in his State of the State address, said there’s no deadline, and he’d like to wait until next year before any expansion to allow time for study on how to reform Idaho’s Medicaid program.
Idaho Senate State Affairs Chairman Curt McKenzie, R-Nampa, says there are several people who have signed up to testify on the capitol grounds use rules this morning, but he doesn't plan to allow any testimony. “Typically when we do rules review, we do not take testimony,” McKenzie said. “It's not the intent to take testimony on these, other than if the committee has questions, for either the presenter or someone else in the audience.”
State Department of Administrator Director Teresa Luna has now begun presenting the rules to the committee. In the rules, the department stated, “Negotiated rulemaking was not conducted because these rules incorporate public comment submitted on the original temporary rules and because further consensus between interested parties on the content of the rules is improbable.”
Sen. Elliot Werk, D-Boise, asked Luna, “Have you looked at the constitutionality of the provisions here?” Luna deferred to the department’s deputy attorney general, Julie Weaver, who said there’s currently ongoing litigation over the constitutionality of the rules. “But I’m confident that we did the best that we could,” she told the committee.
JFAC has opened this morning with its hearing on the Catastrophic Health Care fund, the program that pays for catastrophic medical bills for Idahoans who can't pay. “We're getting affected by the local economic conditions, because we are the safety net, as this is designed,” Director Roger Christensen told lawmakers. For next year, the fund is requesting $38.2 million in state general funds, about a $2 million increase; the remainder of the roughly $60 million-a-year program is funded by local property taxpayers. In 2012, Christensen, a Bonneville County commissioner, said, counties actually spent more than the state on the program. Also this morning, JFAC is scheduled to begin its budget hearings on the mammoth state Department of Health & Welfare.
Meanwhile, both the Senate and House State Affairs Committees are scheduled to hear new rules this morning for use of the state Capitol and surrounding grounds and facilities, proposed by the state Department of Administration. The Senate panel started meeting at 8 a.m. in room WW55, and will take up the rules after hearing a presentation from the Criminal Justice Committee; a subcommittee of the House committee meets at 10 a.m. in room EW 40.
On tonight’s “Idaho Reports” program on Idaho Public Television, I join Jim Weatherby, Emilie Ritter Saunders, Aaron Kunz and host Greg Hahn to discuss the week’s developments in the Legislature. Plus, Greg reports on efforts to head off Idaho’s looming doctor shortage; interviews House and Senate Democratic leaders John Rusche and Michelle Stennett; and begins a series of conversations with legislative newcomers with an interview of freshman Rep. Wendy Horman, R-Idaho Falls. The show airs at 8 p.m. tonight; it re-airs Sunday at 10:30 a.m. Mountain time, 9:30 Pacific; and plays on Boise State Public Radio on Sunday at 7 p.m. After it airs, you can watch it here online.
At the first meeting today of the governor’s 31-member education stakeholders task force, members spent some time hearing about the fiscal impact on the current year’s budget of the failure of Propositions 1, 2, and 3, and the ongoing programs in school districts for which funds are left unallocated because of the measures’ failure; that includes adjustments in the “use it or lose it” funding provisions for school districts and funding for additional math and science teachers. However, some members thought the task force shouldn’t wade into the legislative debate over how to reallocate the fiscal year 2013 school budget.
At one point, task force Chairman Richard Westerberg, a state Board of Education member, said, “I guess I’m just a little puzzled. When everybody around the table agrees that these four or five budget items for 2013 oughta be funded, why the heck can’t we just say so?” The panel finally decided, in the words of facilitator Mike Rush, executive director of the office of the State Board, that “the message this committee is sending is not that they’re opposed to that. … We just don’t feel like it is in our purview.”
Another area determined to be outside the group’s purview: Labor issues, including those addressed in the voter-rejected Proposition 1 regarding rolling back teachers’ collective bargaining rights. “We’re not here to talk labor issues,” said Ken Edmunds, president of the State Board. He said, “The issue is educational improvement and what do we do about it.”
The group threw out ideas and filled up numerous big sheets of paper with suggestions ranging from “not one size fits all” to “teacher preparation.”
“We need consistent, ongoing professional development, not one-day workshops,” said Idaho Teacher of the Year Katie Pemberton, from Canfield Middle School in Coeur d’Alene. “I think we should ask the question of why high school graduates are not pursuing some form of post-secondary education,” said Mike Lanza, a Boise parent and co-chair of the successful campaign to defeat the propositions. Senate Education Chairman John Goedde, R-Coeur d’Alene, said, “There’s no differentiation between a really good teacher and one that’s just hanging on day by day. If we’re going to effectively use the dollars we’ve got, we’ve got to figure out a good way to differentiate between those teachers and how they’re compensated.” Said Laurie Boeckel of the Idaho PTA, “We need to define what equity is.”
Edmunds noted that Gov. Butch Otter included $33.9 million in his 2014 budget proposal for possible improvements agreed upon by the stakeholder group and legislators, though he also said he wasn’t seeking legislation this year, and instead would consider any major changes next year. Edmunds said of the $33.9 million, “This is a recommendation, and that’s where the politics start.” But, he said, “There’s so many ideas, so many things floating out there. … The nice part is somebody’s actually holding a carrot out there and saying you have the potential to affect approximately $33 million of the budget.”
The stakeholder group is scheduled to meet again Jan. 25 and Feb. 8.
As Idaho lawmakers head back to their districts for the weekend, some face perilous driving conditions across the state, bad enough that a few are deciding to spend the weekend in Boise. Meanwhile, enough snow has fallen around the state Capitol to allow construction of this stylish snowman with leafy arms, which is standing proudly on the Statehouse lawn near 8th and Jefferson streets.
Senate Assistant Majority Leader Chuck Winder, R-Boise, has launched his weekly prayer group for senators, which will start meeting Tuesday at 7 a.m. in the majority caucus room. “It’s a time to encourage one another,” said Winder, who’s had the weekly prayer meetings since he first joined the Senate four years ago. “It’s a bipartisan effort, and it crosses the spectrum of different denominations and religions.” This year, Winder said new Sen. Branden Durst, D-Boise, has suggested expanding the group to also include House members.
The group gathers for about 15 to 20 minutes. “Someone will share a devotional kind of thought for the day,” Winder said, followed by a scripture reading. “We share our prayer needs,” he said, including praying for family members who are ill. Winder, who is Presbyterian, said, “We can come from different denominations and different faith backgrounds, yet prayer is important to all the faith groups of the world.” In the past, he said, turnout has ranged from no one to “probably as many as seven or eight.”
Idaho Lt. Gov. Brad Little felt at home at the Joint Finance-Appropriations Committee when he came to present his budget this morning. “I started here in 1976,” he told the committee. “I interned in this committee in college in 1976.” He later went on to serve on the panel. Little said the JFAC structure is a vast improvement over how most state legislatures handle the budget process, because it’s transparent, bipartisan and bicameral. “For a small state, we have a very sophisticated budget process,” he said.
Little’s budget presentation was short: “My request is for $142,800 and lump-sum authority. Any questions?” he said. Sen. Dean Mortimer questioned how Little’s “austere budget” covers his expenses. “You do a significant amount of travel and your operating expenses are extremely modest,” Mortimer said, asking Little how he does it. Little said his travel budget is about $400 a month, and “that’s one ride on the state plane with the governor.” So he combines trips and rides along with other state officials whenever possible. He has one full-time employee and one part-timer, and typically turns back 7 to 10 percent of his budget to the general fund unspent at the end of each year.
State Controller Brandon Woolf is presenting his budget request to JFAC this morning, and he highlighted the “Transparent Idaho” government transparency site that he and Gov. Butch Otter unveiled yesterday. “Historically, the greatest impediment to building a transparency site was the cost,” Woolf said in his presentation. “When we’ve scoped this project before, the estimated cost came in as high as $250,000, due mainly to software licensing.”
Staff in the controller’s office found ways to enable their existing technology to “bring the first phase of the website online without having to license new software, expensive software,” Woolf told JFAC. “It features easy to read charts and graphs and allows users to download raw data so they can do their own analysis. … Right now we’re on the right road toward improving Idaho’s financial transparency. I’m proud of the staff’s work to build Transparent Idaho within our existing IT infrastructure. This is a good step and more will follow.”
Woolf’s budget request for next year requests an 18.5 percent boost in general funds, but 80 percent of the increase is due to a one-time, $896,000 request to retire the mainframe computer and convert the state’s accounting and payroll applications to open systems. “Re-platforming these applications preserves the value of the investments the state has already made, extends their useful lives, and delays the need to spend millions on new systems until the economy improves,” Woolf said. “I won’t sugar-coat this. There will come a day when we will need to invest millions of dollars into new accounting and payroll systems. Like you, I want to extend this day as far out as I can.” Gov. Butch Otter included full funding for the request in his budget recommendation.
The Joint Finance-Appropriations Committee voted unanimously this morning to accept the report of the Economic Outlook & Revenue Assessment Committee, which adopted Gov. Butch Otter’s revenue forecast of $2.7991 billion for fiscal year 2014, a 5.3 percent increase. The committee report says the figure “is a reasonable forecast for revenues.” Co-Chair Shawn Keough, R-Sandpoint, told JFAC the panel concluded the figure “is also reasonable for the purpose of beginning the general fund budgeting process. We recognize that it’s early in the session, we’re in the first week of the session, and this is a snapshot in time. Although the governor’s projection is a little more than the committee median, we felt at this point in time it was a good place to start.”
JFAC Co-Chair Dean Cameron, R-Rupert, said, “It is customary for us to accept the committee report. That does not mean that we are budgeting to any number, it just means that we are accepting it, and then we’ll proceed. You will have another opportunity to select a number by which we will set a budget to, based on the information we have at that time, based on this report, based on other information. So with that in mind, I move that we accept the committee report.”
This year’s Economic Outlook & Revenue Assessment Committee process had a much different dynamic than recent years, in which lawmakers have sharply undercut the governor’s economic forecast, forcing much larger budget cuts. Instead, this year brought an extension by legislative leaders of an olive branch to Gov. Butch Otter, accepting his numbers, opening the way for discussion of his proposals, and signifying perhaps a different, more productive working relationship between lawmakers and Otter as this year’s legislative session begins.
Fourteen of the committee’s 18 members went along with the Hill-Bedke motion to adopt the governor’s numbers, with caveats that things could change later in the session when more actual revenue figures are in. Hill said, “I really think that the number is reasonable.” Sen. Shawn Keough, R-Sandpoint, who chaired the joint committee today, said, “My support for the motion today was in recognition that we’re still way early in the session – we’re in the first week.” She said, “I think it gives us a window of opportunity.”
Bedke said, “The governor’s the leader of our party, and so we are not about picking fights at this point. That’s not to say that we don’t have a deep respect for the balance of powers and all of the principles embodied in that phrase. … But we have the luxury of time here.”
The motion to adopt the governor’s revenue forecast – made by Senate President Pro-Tem Brent Hill and seconded by House Speaker Scott Bedke – has been approved on a 14-4 vote. The only “no” votes came from Sens. John Goedde, R-Coeur d’Alene; Curt McKenzie, R-Nampa; Frank Henderson, R-Post Falls; and Stephen Hartgen, R-Twin Falls.
“What my forecast reflects is a recovering economy,” Gov. Butch Otter’s economist, Derek Santos, told lawmakers on the joint revenue committee. “Gradually speeding up – now nothing extraordinary, but growth nonetheless, and acceleration nonetheless.”
After a series of questions, Rep. Grant Burgoyne, D-Boise, moved to adopt the governor’s revenue figures, and Sen. Dan Schmidt, D-Moscow, seconded the motion. “I feel very comfortable with the explanations we’ve gotten from the governor’s economist, and it seems to me to be a very prudent move,” Schmidt said.
Sen. Curt McKenzie, R-Nampa, then moved a figure very close to the committee’s median forecast, $2.741 billion in fiscal year 2014, 3.1 percent growth, and Sen. John Goedde, R-Coeur d’Alene, seconded that motion. Rep. Stephen Hartgen, R-Twin Falls, called the governor’s figures “very, very aggressive.”
Sen. Branden Durst, D-Boise, disagreed. “The committee median I think is a little too bearish on Idaho’s economy,” he said. “I believe in self-fulfilling prophecies. … If we want to be optimistic and have a positive view, we’re going to have a positive outcome.”
House Speaker Scott Bedke, R-Oakley, then said, “I’m going to think out loud here for a second. … It’s Jan. 10th, and we haven’t got all of the numbers in, and I appreciate the governor’s optimism, and I appreciate the sentiments that have been expressed by the makers of the original motion.” Bedke said low-balling the figure too much could foreclose discussion on a number of fronts. “If we get out in front of this and tighten the number down too much, then I think that will stymie some discussions with regard to personal property tax and its replacement, etc.,” Bedke said. “I think the longer we wait, the more information we have, and that issue and others will be framed better. … So at this time, at this date, I don’t see anything wrong with the governor’s more optimistic number,” as long as the committee recognizes that JFAC could alter it based on information that comes in later.
Rep. Marc Gibbs, R-Grace, then said, “At this point in time maybe there’s nothing wrong with being cautiously optimistic.”
Senate President Pro-Tem Brent Hill, R-Rexburg, said, “I’m not saying that’s where my number came up, but I don’t feel it’s unreasonable.” He suggested adopting the governor’s numbers, with the caveat that “on this date we find the governor’s number is reasonable to begin the fiscal year 2014 budgeting process … something to that nature.” Hill then proposed that as a motion, and Bedke seconded it.
The Legislature’s Joint Economic Outlook and Revenue Assessment Committee has convened to set the revenue estimate it will recommend. If adopted by the Joint Finance-Appropriations Committee, that figure would form the basis for next year’s state budget. After two days of hearings on the state’s economic outlook before the legislative session started, each member of the joint committee has set his or her estimate of state tax revenue for this year, next year, and the year after. The median from the committee members’ estimates came in at 3.1 percent growth next year, to $2.7410 billion, in fiscal year 2014. That compares to the 5.3 percent growth, to $2.7991 billion, Gov. Butch Otter’s economists have forecast.
Otter’s proposed budget sets spending for next year’s budget at a 3.1 percent growth level , but not counted into that are the $20 million he wants to use to offset a move to eliminate the personal property tax on business equipment, or the $35 million he wants to pump into the state’s main rainy-day fund. If lawmakers opted to go with the committee’s median figure, they’d potentially set themselves up for a situation where the governor’s budget could be funded but not those two items. Of course, lawmakers can depart from the governor’s budget plan when they draw up their own, but it’s something of a starting point.
In the committee members' estimates, Rep. Marc Gibbs, R-Grace, was lowest, predicting 2 percent growth next year to $2.6800 billion; Sen. Dan Schmidt, D-Moscow, was highest at 4.7 percent growth in fiscal year 2014, to $2.8124 billion.
Don Drum, director of the Public Employee Retirement System of Idaho, told JFAC this morning that PERSI is among the best-funded state pension systems nationwide; it’s among a dozen states that are 80 percent or better funded. As of Jan. 3, it was 87.7 percent funded. That was after the PERSI board lowered its expected returns out of concern over market conditions and a possible recession due to the fiscal cliff issue; without that change, it would be over 90 percent.
“Forty-two states have made changes to their pension plans,” Drum said. “Most of those systems are coming back to where Idaho has always been and we’ve elected to stay. We’re still on the conservative side of the benefit structure, and I think that’s where we want to stay.”
Nevertheless, PERSI will have a rate increase this year; it was actually first approved back in 2009 during the downturn, but was delayed twice as agencies struggled with budget cuts. No action by the PERSI board is required for the scheduled rate increase; its first phase, a 1.5 percent hike, kicks in July 1, 2013; that includes 0.58 percent for employees and 0.92 percent for employers, which include state and local government agencies and school districts. The state general-fund impact is about $9 million. Another 1.5 percent increase is scheduled to hit in 2014, and the final 2.31 percent in 2015. Other than the 1 percent annual cost-of-living increase required by law, the board has not approved any additional COLA for retirees for the past four years, nor is it proposing one for next year.