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Agency budget hearings begin; budget staff same level as 25 years ago

The Joint Finance-Appropriations Committee is diving right into its agency budget hearings this morning, with six relatively small agencies on the docket. First up is the Legislative Services Office. LSO Director Jeff Youtz told JFAC that Idaho’s legislative staffing is far below the national average. “It’s 0.8, less than one person per legislator support in Idaho,” he said. The national mean is close to 3.

The legislative budget office has the same staffing level it had 25 years ago, Youtz said. That’s been possible partly because of technology, he said, but added, “The people keep getting better and better, and they’ve been rising to the occasion.” The largest division, the audit staff, has 28 people; 25 years ago it had 30. “We’re making things fit and addressing responsibilities without growing staff,” Youtz said. In some cases, he said, he’s cut positions in order to maintain pay levels for staffers. Statewide, Idaho state employee pay lags 18.9 percent below market rates, but Youtz said as a result of his efforts, that’s not the case at LSO.

The budget request for LSO for next year is for a maintenance-level budget; due to benefit cost increases, it shows a slight increase of just over 1 percent. The budget totals $4.4 million in state general funds, $5.9 million total, which includes dedicated funds in the form of audit billings from other agencies. LSO has 64 full-time positions, plus seven seasonal positions for the legislative session.

Also up for hearings today: The governor’s Division of Financial Management; the Executive Office of the Governor; PERSI; the Endowment Fund Investment Board; and the Commission on the Arts.

Kane: ‘Always err on the side of disclosure’

Last year, Idaho Senate members disclosed conflicts of interest 36 times, Deputy Attorney General Brian Kane said during the legislative ethics training session this afternoon; House members made 50 such disclosures plus five requests to be excused from voting. Kane said while that might sound like a lot, 342 bills were enacted last session. That means there were 11,970 opportunities for disclosure in the Senate, and nearly 24,000 opportunities in the House. Kane said the numbers show it’s not a big burden. “Always err on the side of disclosure,” he said. “We’re here to try to promote confidence in government.”

Kane defined conflict of interest as “any private interest affecting your ability to act in the public interest.” He said, “If you have an influence that you naturally are going to lean toward,” disclose it.

Kane said too much disclosure has never led to the convening of an ethics committee in the Idaho Legislature. Click below for  full report from AP reporter John Miller on today's unprecedented ethics training session for state lawmakers.

Monsanto opts out of push for personal property tax cut, concerned for county services

Here’s a news item from the Associated Press: BOISE, Idaho (AP) — One of Idaho's biggest companies, Monsanto, isn't pushing to eliminate the personal property tax, on grounds such a move could undermine services in its home county. Monsanto government affairs director Trent Clark said Tuesday the St. Louis-based maker of Round-up herbicide believes there are problems with the tax, whose repeal Gov. C.L. "Butch" Otter named as a 2013 session priority. However, local governments and schools in Caribou County, where Monsanto has phosphate mining and refining operations, depend on the business-equipment tax for more than 40 percent of their revenue, to fix roads, educate kids and provide law enforcement protection. Clark said the potential that repeal could send local officials scrambling to preserve those services — or shift costs to others — convinced Monsanto to refrain from joining the legislative fight.

Ethics expert: ‘Why would we not hear good ideas just because of who brought it to the table?’

Ethics expert Scott Raecker shared a story at the legislative ethics training session this afternoon about proposing a bill as a new lawmaker, and being told bills with sponsorship only from minority-party lawmakers don’t get public hearings. He had brought together various stakeholders behind the bill, and pressed his point – and the bill both was heard and passed. “Why would we not hear good ideas just because of who brought it to the table?” Raecker asked. Sometimes, he said, the Legislature’s culture needs to change, in order to create a values-based ethical culture. He said, “We shape the culture, and the culture shapes the character.”

Said Raecker, "It's not a matter of circumstance but of choice, and I would urge you to continue to choose wisely in Idaho."

Lots of attentive lawmakers at this afternoon’s ethics training session…

Ethics expert Scott Raecker, a longtime Iowa state lawmaker and executive director of Character Counts in Iowa at Drake University, has a big crowd of lawmakers from both houses at the ethics training session this afternoon in the Capitol Auditorium. Raecker shared his favorite quote from Thomas Jefferson: “Sir, I am going to treat you as a gentleman not because you are one, but because I am one.” Said Raecker, “I challenge all of us to raise the bar higher – raise the bar higher and do what Jefferson said.”

He outlined the “six pillars of character:” Trustworthiness, respect, responsibility, fairness, caring and citizenship.  “We care deeply about what we’re doing in public service,” Raecker said. “Our passions run very, very high. We need self discipline. … Our language is important and our actions are important.”

Raecker is a certified corporate ethics trainer with the Josephson Institute of Ethics, and served 14 years in the Iowa Legislature, including chairing the House Appropriations Committee and the Ethics Committee.

This afternoon’s legislative ethics training also includes sessions on conflicts of interest, the public trust and the law, led by Deputy Idaho Attorney General Brian Kane; on money and campaigns; led by Kane and Idaho Secretary of State Ben Ysursa; and on communications, led by Kane, from the public records law and use of official letterhead to distinctions between official, personal and campaign business. At the close of today’s program, from 4:30 to 5, the group will break into House and Senate groups for a Q-&-A session.

City Club forum: ‘It was a slap, but it was a love slap’

Today was the City Club of Boise’s annual Pundits Forum, in which I joined Dan Popkey of the Idaho Statesman and John Miller of the Associated Press, along with moderator Jim Weatherby, to discuss the upcoming legislative session. There was a huge, record crowd of nearly 700 people, including lots of lawmakers. I think my favorite moment was when I realized why a large group of legislators in the audience, including legislative leaders, rose and left the forum about 5 minutes after 1, though it wasn’t over yet. The reason: Legislative ethics training started at 1:15, and attendance was mandatory.

In fact, this morning House Speaker Scott Bedke announced that plainly on the floor of the House, telling members, “The attendance in the ethics training is not optional.”

There were some laughs and some good questions at the City Club forum, which will be replayed on Boise State Public Radio Saturday at 8 p.m. and Tuesday at 7 p.m. At one point, a questioner from the audience asked what we made of the fact that Idaho voters rejected Propositions 1, 2 and 3 at the same time that they re-elected the same lawmakers who’d passed those laws. Popkey said it was because they like their local teachers, but they also like their local lawmakers. “It was a slap, but it was a love slap,” he said.

Moving ‘Students Come First’ money out of school budget would require 2/3 vote of JFAC

As the Joint Finance-Appropriations Committee went over its complicated rules this morning, Legislative Budget Director Cathy Holland-Smith highlighted JFAC Rule 13 – To reopen a budget, either to put more money in – a supplemental appropriation – or to take money out – a negative supplemental – requires a two-thirds vote of the joint committee.

That matters for the next issue the joint committee is now reviewing: The fiscal impact of the failure of Propositions 1, 2 and 3 on this year’s public school budget. Here’s why: The various changes in law caused by voter rejection of the three propositions leave $30.6 million unallocated in this year’s public school budget. Lawmakers have a number of options, including no action, which would cause the money to flow at the end of the year into the Public Education Stabilization Fund; redirecting those funds within the public school budget, which would take a simple majority vote of JFAC; or redirecting those funds to some other purposes outside the public school budget. Because of Rule 13, that would require a 2/3 vote of the 20-member joint committee.

The reason redistributions within the budget wouldn't require reopening the budget and a two-thirds vote is because the public school budget has what’s called “lump-sum authority” written into it, permitting movement of funds within the total. The large budget always has that authority, explains JFAC budget analyst Paul Headlee, “because it’s built on so many estimates.”

The question of what happens to the now-unallocated money is a major one. “It’s the No. 1 question I had all year – what happens to the money,” Headlee said.“The answer is really in the hands of the Legislature.”

Committees start meeting, ethics training today for all lawmakers

Committees are meeting around the Statehouse this morning, though few have substantive business as yet. The House Health & Welfare Committee meeting is packed this morning, between Health & Welfare staffers, lobbyists, reporters and citizens, as it hears an overview of the programs at the Department of Health & Welfare. In the House Education Committee, new Chairman Reed DeMordaunt, leading an organizational meeting, encouraged his members to use their computers to look at bills and so forth, drawing, amid laughter, concerns from Rep. Pete Nielsen, who said he generally asks his grandkids to help when he has to do something on a computer.

JFAC is mostly going over rules and how the committee works this morning, but later this morning, it’s scheduled to hear a presentation on the impact of the failure of Propositions 1, 2 and 3 on the current year’s public school budget.

In the House Revenue & Taxation Committee, a full slate of state Tax Commission rules is up for review this morning New Rep. Mark Patterson, R-Boise, asked repeated, sharp questions of the presenter, McClean Russell. Rev & Tax Chairman Gary Collins, R-Nampa, cautioned him, “Please go through the chair,” but Patterson just kept on questioning Russell. Collins just smiled. No Senate committees other than JFAC have scheduled meetings today.

This afternoon from 1:15 to 5, all legislators will go through a full session of ethics training in the Capitol Auditorium; the session will be streamed live for all those who want to watch. You can see the agenda here.

Idaho teacher workforce OPE report: ‘Strong undercurrent of despair’

The Joint Legislative Oversight Committee is meeting this afternoon, and has just released a new performance evaluation report entitled “Workforce Issues Affecting Public School Teachers.” Rakesh Mohan, director of the Office of Performance Evaluations, said, “In light of current interest in public education reform, I think you’ll find this report to be a good resource for all policy makers and educational stakeholders to inform their policy discussions.” He noted, “Not only we analyzed the data that was available to us … but we also surveyed all teachers, all superintendents and all public school principals. As a result, we had more than 2,800 responses that we analyzed in this report.” The State Department of Education and State Board of Education also participated.

The report found that Idaho’s average class size is 24 students to one teacher; though there are wide variations, the average didn’t vary by level, with an average of 23 in elementary school, 25 in junior high and 23 in high school. The average teacher salary in Idaho was found to be $43,000, but the report found that teachers in all sizes of school districts typically don’t top $40,000 a year until they’ve been teaching for at least 11 years; you can read the full report here.

Survey respondents reported concerns about increasing class sizes; 64.3 percent of superintendents surveyed said class size is a concern, as did 79.9 percent of principals. The report also identified “a strong undercurrent of despair” among teachers, who said they perceive a climate that “disparages their effort and belittles their contribution,” said OPE analyst Lance McCleve.

School officials reported trouble recruiting teachers, particularly for hard-to-fill positions including science, math and special education. Salary was cited overwhelmingly as the top barrier to recruitment; 76.2 percent of superintendents and 66.7 percent of principals pointed to salary. In addition, 81 percent of superintendents and 59.9 percent of principals said they’re concerned about their ability to retain their current teachers; even larger numbers said their teachers are taking on additional duties due to a loss of support staff.

The report suggested there may have been a reporting error in the figures collected by the State Department of Education about teacher departures over the last three years. “We conclude that a mass teacher exodus has not occurred, but that fears about such an exodus occurring in the future may not be totally unfounded,” the report said. Click below for a full report from AP reporter Todd Dvorak.

Dems respond to State of the State

Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho Democrats are open to a $141 million personal property tax cut proposed by Gov. C.L. "Butch" Otter, provided there's something in it for local governments. The minority party Tuesday offered its annual response to Otter's State of the State speech, when the Republican governor announced he favored local option taxes to help replace money cities, counties and schools stand to lose from elimination of the tax on business equipment. Senate Minority Leader Michelle Stennett said local governments must be shielded from cuts to critical services.House Minority Leader John Rusche said it's too early to declare a caucus position, adding his members want to be players in the debate. In addition, Democrats say they'll push again for an independent ethics panel, election reforms and help disabled veterans find jobs.

Click below for the House and Senate Democrats' full statement.

Digging into gov’s budget…

As members of the Joint Finance-Appropriations Committee began digging through Gov. Butch Otter’s budget proposal this morning, Rep. Shirley Ringo, D-Moscow, questioned how Otter can say the budget is structurally balanced when it doesn’t address state employee pay that lags behind market rates and a backlog of deferred maintenance and infrastructure needs, including aging highway bridges.

Jani Revier, the governor’s new budget chief, told JFAC that the governor’s budget targets one-time funds to “critical replacement and capital needs,” including computers and cars. You can see her PowerPoint presentation here.

DFM staffer David Fulkerson said, “The governor is still committed to state employees, but we just didn’t get there this year on that item.” The governor’s chief economist, Derek Santos, said, “Our forecast … is based on the economy recovering gradually.”

Duncan back in Idaho court, Legislature off and running for session…

Condemned multiple murderer Joseph Duncan will be back in an Idaho federal courtroom today, for a retrospective competency hearing, to determine if he was mentally competent in November of 2008 when he waived his appeals. If he’s ruled competent, Duncan will go back to federal Death Row in Terre Haute, Ind., to await execution. If not, more court proceedings would ensue – possibly including a replay of his whole death penalty sentencing trial. You can read my full story here from today’s Spokesman-Review.

Meanwhile, the Idaho Legislature is off and running for its session. JFAC is meeting this morning and will begin sorting through the governor’s proposed budget for next year. House and Senate Democrats will give their response to yesterday’s State of the State message at 10 a.m., and this afternoon at 4, the Joint Legislative Oversight Committee will meet in the Capitol Auditorium and release a report on workforce issues affecting public school teachers in Idaho.

Otter offers upbeat message after years struggling through downturn

Idaho Gov. Butch Otter took an upbeat tone in his sixth State of the State message to lawmakers today, urging them to start where they all agree and get things done for the state – including his proposal for Idaho to run its own health insurance exchange. You can read my full story here at spokesman.com.

While proposing no base pay increases for state employees or teachers, and proposing a 3.1 percent spending increase next year though his economists expect 5.3 percent growth, Otter expressed optimism about the state’s economic outlook. “People have been hearing for four years about what we can’t do,” he said after his speech. “Let’s talk about what we can do.”

“At least he’s keeping his conservative perspective on increases for the state budget,” said an approving Rep. Vito Barbieri, R-Dalton Gardens – though Barbieri remains adamantly opposed to a state-based insurance exchange. Said Rep. Eric Anderson, R-Priest Lake, “We’ve got our job cut out for us.”

House Speaker Scott Bedke, R-Oakley, praised Otter for making a structurally balanced budget a top priority, after years of filling in budget holes with one-time funds as Idaho struggled through the recession. “Idaho has done what the United States has yet to do, i.e. live within the taxpayers’ means,” he said.

Otter: Start where all agree

As he closed his “State of the State” message, Gov. Butch Otter noted Idaho’s recent ranking of second in the nation for volunteering. That’s “in our DNA,” he said. “It’s who we are. It’s who you are, and I’m proud to join you in pressing ahead toward an ever brighter and more hopeful future for us all.”

He then departed again from his prepared remarks, urging lawmakers to start from where all agree, as they move forward to do what’s best for Idaho. House Speaker Scott Bedke responded, “Governor, on behalf of the joint session, we thank you for your remarks and we will try to put those into action.”

Otter recalls lost firefighter, calls for more fire protection associations

Gov. Butch Otter recalled Anne Veseth, the 20-year-old college student and seasonal firefighter who was killed in August while fighting a fire in Clearwater County. “We owe her and thousans like her a fighting chance while protecting our forests and rangelands,” Otter said. “That’s why my budget includes a $400,000 request to help create four more volunteer fire protection associations,” like one formed last summer by ranchers in the Mountain Home area. Otter said such groups could help fight and prevent catastrophic wildfires.

Idaho roadless rule upheld in court

Gov. Butch Otter departed from his prepared remarks, just as he was highlighting “the damage that federal court rulings can do to our traditional industries and our Idaho lifestyle.” The governor told lawmakers, “In fact we learned just this morning that Idaho won its case on our roadless rule … because we stayed at the table, because we continued to force the merits of our arguments. The 9thCircuit Court ruled this morning 3-0 that we were right.” Loud applause greeted the announcement. Click below for an announcement from Sen. Jim Risch.

Gov proposes new secure mental facility at state prison complex

Idaho would build a new 579-bed secure mental health facility at the prison complex south of Boise, under a $70 million bond plan that Gov. Butch Otter is proposing to lawmakers. “More than a quarter of the inmates in our state prison system have some level of mental illness,” the governor said. “Many can be housed safely within appropriate settings in our existing facilities. But others need higher levels of care, more treatment and more intensive intervention for their own safety and that of others.” He said, “No one likes spending money on prisons or inmates. But public safety is increasingly compromised by our inability to provide secure housing and appropriate treatment for mentally ill offenders.”

Though they didn't perhaps look happy about it, lawmakers applauded the proposal.

Five more med school seats, more residencies to fight doc shortage

Gov. Butch Otter has called for adding five more seats to the WWAMI collaborative medical school program that allows Idaho students to attend med school at the University of Washington, with the seats targeted to a program aimed at rural areas. He also is calling for more residency programs at the Boise VA Medical center; both moves are aimed at addressing the state’s physician shortage, and the aging of its physician workforce. "Like the rest of my budget, both these requests deserve your strong support," Otter told lawmakers, grinning as they responded with a round of applause.

He’s also touting his administration’s Medical Home Collaborative, which is aimed at moving Medicaid to a “patient-centered model of care” in which patients and their primary physicians work more closely together.

Gov: No Medicaid expansion, at least for now - study for next year

A perhaps surprising announcement from Gov. Butch Otter: At least for now, he’s opposing expansion of Idaho’s Medicaid program largely at federal expense, though a working group he convened to study the issue called for the expansion. “There’s a lot more work to do, and we face no immediate federal deadline,” the governor said. “We have time to do it and to do it right, and there's a broad agreement that the existing Medicaid program is broken. So I’m seeking no expansion of those benefits. Instead, I’m asking Director (Dick) Armstrong (of Health & Welfare) to lead an effort to flesh out a plan for changing Idaho’s system with an eye toward the potential costs, savings and economic impact. I hope to return in 2014 with specific proposals based on that work, and I encourage all Idahoans to get involved with this process.”

Idaho’s current Catastrophic Health Care fund pays for indigents’ catastrophic medical expenses 100 percent with state tax funds and local property tax funds, to the tune of $60 million a year.

Otter pitches state insurance exchange, says it’s a ‘matter of states rights’

Gov. Butch Otter defended his support for a state-based health insurance exchange. “Rejecting the opportunity to assert ourselves will result in an unresponsive, one-size-fits-all federal exchange wreaking havoc on some of America’s most reasonable costs of coverage,” Otter declared. “At its core, this is a matter of states’ rights.”

He told lawmakers, “I soon will be introducing legislation affirming my decision.”

He said, “You all know how I feel about Obamacare. … But the fact remains that for now and for the foreseeable future, it is the law. And as responsible elected officials, we’re sworn to uphold the rule of law, not just those laws that we support.” That final statement drew a round of applause from the crowded legislative chamber, in which both senators and representatives are assembled.

Local-option tax to offset personal property tax cut?

The personal property tax on business equipment, which Idaho’s largest businesses are pushing hard to repeal this year, is something “nearly everyone agrees is an unfair drag on our economy,” Gov. Butch Otter told lawmakers in his State of the State message. He said, “Whether the tax is eliminated all at once or phased out over a few years is less important to me than an exit strategy that considers our counties’ financial stability.”

He said, “That isn’t necessarily about using state revenues to make counties ‘whole.’ In fact, my preference is granting local-option taxing authority that enables county voters to decide for themselves how to address their most pressing needs.”

Otter added, “However, I also have set aside $20 million in my budget for easing counties’ transition. I look forward to hearing your debate and considering your alternatives.”

Otter pitches ‘Hire One Hero’ program

A legislative initiative Gov. Butch Otter is outlining is an expansion of the “Hire One Act” that he successfully pushed for in 2011. The new legislation would clarify the existing tax credit for new employees, plus add $1,000 to the employer’s credit if the new worker is a veteran. The governor is calling it the “Hire One Hero” program. “My new legislation is intended to provide one more reason for employers to consider veterans, besides their skills, training and work ethic,” the governor said. It’s unclear at this point what the cost of the changes will be, but it could be as much as $11 million per year.

Otter touts business collaborations with colleges, CdA teacher of year…

Gov. Butch Otter is highlighting university-business collaborations in the state and  efforts at Idaho’s community colleges to address workforce development issues. He’s also paying tribute to Katie Pemberton of Canfield Middle School in Coeur d’Alene, Idaho’s 2013 teacher of the year.  “She’s earned that recognition in part by making technology a cornerstone of her math classes at Canfield,” Otter said. He also got a quick but loud round of applause when he acknowledged the Albertson Foundation for its support of education in Idaho, including a $5 million grant for innovative teacher training at the U of I and Northwest Nazarene University.

Governor: No school reform legislation this year…

Education policy in the wake of the voter-rejected “Students Come First” laws is a hot-button issue as this year’s legislative session convenes, and Gov. Butch Otter had some strong things to say about it in his State of the State message. “I do NOT seek to simply revisit issues related to school improvement that were raised in the recent election,” he declared. “Instead, I’ve asked the State Board of Education to assemble a broad cross-section of stakeholders to study the message voters sent us and identify elements of school improvement on which there is broad agreement.”

He said, “I’m convinced that acting too quickly or without due deliberation will generate needless distraction from our goals of improving efficiency, effectiveness, transparency and accountability in our education system.”

Said the governor, “There was no electoral mandate for the changes we proposed on Nov. 6. But I also heard no clarion call for the status quo. What I heard was dissatisfaction with the process and a plea for more collaborative leadership. We must respond with appropriate sensitivity and care.”

Interestingly, the governor’s budget contains an expenditure directly related to this: $33.9 million in ongoing money in the public school budget to enact recommendations that that stakeholder group and lawmakers agree on in budget for the coming year, which starts July 1.

“Let me say it again, I am neither calling for nor expecting major school improvement measures this year,” Otter told lawmakers. “But I believe there are areas in which we can make progress, and I encourage you and all citizens to engage in that public discussion.”

Otter’s budget: A 3.1% increase

Otter’s first hint about the state budget he’s proposing for next year: He doesn’t want state government to grow as fast as “our economy and the people’s ability to pay for it.” Therefore, he said, his budget will call for a 3.1 percent increase in state general fund spending, though state economists are predicting a 5.3 percent increase in general fund tax revenue next year. Otter said that move reflects “our continuing need for caution and prudence in the collection and expenditure of the people’s hard-earned dollars.”

Details in the budget itself show that Otter is proposing a $2.786 billion general fund budget for fiscal year 2014, up $84 million from the original appropriation for the current year, 2013, of $2.702 billion. He’s proposing to add another $35 million to the state’s main rainy-day fund, the budget stabilization fund; set aside $20 million toward a phaseout or repeal of the personal property tax on business equipment; and a 2 percent, $25.6 million increase in the general fund budget for public schools.

The budget includes no base pay increase for state employees or teachers, other than for a small number of military division workers. 

Otter welcomes weather, Batt, crowd, begins address

Gov. Butch Otter has begun his “State of the State” message to a joint session of the Idaho Legislature, and as he began, he noted the snowy weather outside. “I consider it an omen, that if God’ll help us with this and our watershed, He certainly ought to help us here with the rest of our endeavors for the year,” Otter said to applause.

He also paused to “welcome back to the chamber” former Gov. Phil Batt, who’s in the gallery. After a sustained standing ovation for Batt – which he acknowledged by rising once, then, grudgingly, again – Otter said to laughter, “Gov. Batt always used to complain about standing ovations until one time we didn’t stand to give him an ovation, and then he complained about our disrespect.”

Otter started out his speech paying tribute to retiring Idaho State Police Director Col. Jerry Russell and to former state Controller Donna Jones, who stepped down from her elected post this year to focus on recovering from serious injuries in a car accident. “They have my sincere thanks and deep regard for their years of dedicated service to the people of Idaho,” the governor said.

Legislature convenes, State of State on tap

The House and Senate have now convened, in advance of Gov. Butch Otter's annual "State of the State" and budget message to a joint session of the Legislature, which will occur in the House chambers. The governor's speech, laying out his agenda for the legislative session that starts today, is scheduled for 1 p.m. Mountain time (noon Pacific). Here, senators file into the House chamber for the joint session.

I will be attempting to llive-blog the speech, but there are serious problems with the public WiFi system in the Statehouse today that may make that effort more difficult; I'll play it by ear. A note on the time stamps on these blog posts: They are in Pacific time, where my newspaper's servers are located. So, despite what the time stamps show, these items will not be posted an hour before they happen; the time just shows an hour earlier than the local Mountain time in Boise. You can watch the speech live here.

A test of leadership for Gov. Otter…

Idaho Gov. Butch Otter faces a major leadership test when Idaho lawmakers convene their legislative session on Monday: convincing many from his own party that it’s in the state’s best interest to run its own health insurance exchange, when many want no part of “Obamacare.” Otter’s tried before to convince recalcitrant fellow Republicans to do something they didn’t want to do, notably failing in 2009 to get them to raise state taxes to fund major road improvements. He tried vetoes. He tried arm-twisting. But his own party didn’t budge.

Otter said Friday that he’s committed to creating the exchange, which would provide Idahoans an online place to shop for health insurance plans and access government subsidies, only with legislative support. “I think it is a states’ rights issue, that we should be at the table,” the governor declared. “I thought that with the wolves or the grizzly bears, I thought that with the caribou, I thought that with the sage hen and almost every other issue that has come up. If we stay at the table, I think we can make a difference. We did make a difference in most of those negotiations.” You can read my full story here at spokesman.com.

Implications of personal property tax repeal…

Click below for a report from AP reporter John Miller on the potential repeal of the personal property tax on business property. Gov. Butch Otter said Friday that he'll promote a repeal plan in his State of the State address to lawmakers on Monday, provided it can be accomplished without harming local government in Idaho. But there are wide-ranging implications, including tax shifts.

Repealing personal property tax: ‘A reason to come to Idaho’ or ‘misguided public policy’

Only eight states have no personal property tax on business property, attorney and CPA Rick Smith of Hawley Troxel said at today’s AP Legislative Preview. Still, he urged its repeal in Idaho. “It gives Idaho an opportunity to get out in front on this issue,” Smith said. “Here is a reason to come to Idaho.”

Dan Chadwick, executive director of the Idaho Association of Counties, said, “I don’t think there’s any question that the personal property tax is a lousy tax, it’s hard to administer.” But, he said, “It’s the cards we’ve been dealt.” The tax is a significant source of the funding that provides public services in many Idaho counties, he said. “Caribou County stands to lose $2.1 million out of their budget,” if the tax is repealed, he said. “That’s a small county and that’s a large chunk of their operating budget,” about 40 percent. “We’d have to find a way to replace those dollars. It is not going to work, simply to say ‘figure this out.’”

Former longtime chief state economist Mike Ferguson offered a different view: He noted that the personal property tax is in the Idaho Constitution, it’s been part of the taxing structure in which Idaho’s economy has thrived for many decades, and he said repealing it would be “a misguided public policy decision and wrong for Idaho.” Ferguson noted that Idaho’s school districts would lose $38.6 million in funding – nearly as much as the $38.9 million counties would lose. School districts would see their property tax bases shrink by between 20 and 50 percent, making it that much harder for them to persuade local voters to pass property tax overrides – because it would take higher tax rates to raise the same amount of money.

Ferguson also noted that a few large companies would be the main beneficiaries; Idaho Power, for example, accounts for a third of all the operating property subject to the personal property tax in the state; operating property, such as utility lines and pipelines, is a significant chunk of the value on which personal property tax now is collected.