The Joint Finance-Appropriations Committee voted 19-1 this morning to pay Education Networks of America to offset a portion of the missing federal e-rate funds for the Idaho Education Network in the coming fiscal year, but only eight months’ worth, not a full year. That knocks the additional appropriation down from the requested $7.3 million in state general funds to $4.8 million.

The idea, said Sen. Dean Cameron, R-Rupert, JFAC co-chair, is to “go a step at a time, ease into it, and see where we’re at at the next legislative session.” The funds will be appropriated month by month – not up-front. Strict reporting requirements on the state Department of Administration are tied to the money, and if federal e-rate funds are released, the state funding would stop, and the state would be paid back.

The federal e-rate funds, which come from a telephone tax, are supposed to be paying for three-quarters of the cost of the IEN, a broadband network that connects every Idaho high school and also provides video-conferencing capabilities. Idaho signed a multi-year, multimillion-dollar contract with ENA and CenturyLink, then Qwest, in 2009 to provide the network, but the contract award is being challenged in court by another bidder, Syringa Networks. After the Idaho Supreme Court issued a ruling last March that raised serious questions about whether the contract award was legal, the feds cut off the e-rate funds. Budget analyst Robyn Lockett said the feds are conducting their own “independent verification of the validity” of the contract award, before determining whether or not to release the funds. If they find the contract is invalid, Idaho may also be ordered to repay the $13.3 million in e-rate funds already paid to ENA under the contract.

In January, the state Department of Administration asked JFAC to pay $14.45 million in state taxpayer funds to ENA to cover the missing e-rate funds. Initially, the lawmakers approved just $6.6 million for the current fiscal year; they put off until today the question of $7.3 million for the coming fiscal year, which starts July 1.

Today’s JFAC action would cover the portion of those funds for the first eight months of the fiscal year, from July to February. Cameron said the hope is that by then, the issue would be resolved and the federal funds released. If not, the Legislature could decide in next year’s session how to proceed. School districts could apply for the e-rate funds on their own, but the annual deadline is March 23 and there’s a 28-day request for proposals period required – so it’s too late for them to apply this year. They could, however, apply next year.

The JFAC bill also includes a requirement for a service audit of the Idaho Education Network. “To me, the success of the IEN network will be based on whether it’s providing additional educational services to more kids,” Cameron said. “The IEN is not a success if we’re just providing internet service, or providing IDLA classes – those were being provided for before. The success, I think, is going to be based on what additional educational services are provided.” At this point, he said, lawmakers don’t have answers to that question. IDLA, the Idaho Distance Learning Academy, is the state-run distance learning operation that provides high school classes online.

The only “no” vote came from Sen. Dan Johnson, R-Lewiston, but he didn’t object to the legislative intent language tied to the appropriation, which was approved unanimously. It also includes a statement that the move "shall not be construed as an endorsement or a commitment to the continuation" of the contract beyond this appropriation; the Department of Administration last year extended the contract with ENA through 2019, without informing lawmakers. The $4.8 million budget bill still needs approval from the full House and Senate and the governor’s signature to become law, but budget bills rarely change after they’re set by the joint committee.