Idaho requires every bill in the Legislature to have a Statement of Purpose and fiscal note, stating the financial impact of the legislation on the state’s general fund over the coming year. Aside from appropriation bills, for which fiscal notes are developed by legislative budget staffers, and agency bills, which state agencies write with the state Division of Financial Management, sponsors of bills are responsible for their own fiscal notes.

But a review of 15 comparable state legislatures by Idaho legislative staffers shows that two-thirds of those states “require a third-party agency to draft the fiscal notes, so it’s not left to the sponsor to do so,” Legislative Services Director Eric Milstead told the Legislative Council today. “Of those 10 states, seven use non-partisan legislative staff, two employ a shared function between the legislative and executive branch, and one, Kansas, has an executive branch agency that drafts all fiscal notes.” For those agencies, staff size varied from five to 23. Eleven of the states require fiscal impact on local governments to be included; half require long-term impacts.

Milstead said about 550 bills are introduced in the Idaho Legislature each year. About 120 of those are appropriation bills; and about 100 are state agency bills. So more than 300 each year leave the development of the fiscal note to the lawmaker sponsoring the bill.

The “comparable” states were defined as those with part-time citizen legislatures who receive low compensation and have small staffs. Thirteen of the 15 have their fiscal note requirements codified in state law; most also have legislative rules addressing them. The states reviewed were Georgia, Kansas, Maine, Mississippi, Montana, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Utah, Vermont, West Virginia and Wyoming. Utah has 17 legislative staffers who prepare 1,200 fiscal notes a year; Wyoming has five who prepare 314 a year.

While expressing concern that fiscal notes should be accurate, lawmakers on the council weren’t excited about the idea of hiring a lot of new staffers to write fiscal notes. Pointing to Utah’s process, Senate Majority Leader Bart Davis said, “They have a separate group of professional financial scorers. Our system doesn’t do that.”

Sen. Brent Hill, R-Rexburg, said perhaps Idaho should examine its rule that allows other lawmakers to challenge a bill’s fiscal note, and beef that up. Sen. Grant Burgoyne, D-Boise, said, “Sometimes we find out the sponsor didn’t really have a good grasp of the cost – they’re not trying to put one over on us, they just really didn’t.” He said he’d like to see review of how accurate Idaho’s fiscal notes have been. “I’m looking for a sense of whether there is or isn’t a problem.”

“I think it’s inherently political – it cuts both ways,” said Sen. Cliff Bayer, R-Boise. “And there are 105 eyes looking at this.” Amid laughter, House Speaker Scott Bedke corrected him: “210.” There are 105 state lawmakers; each has two eyes.

Hill said, “We’ve got to keep this in perspective.” Perhaps only a dozen or so bills each year, outside of appropriation bills or agency bills, really have a major impact on the general fund, he said, proposing things like tax cuts or new programs that require state spending. JFAC staffers track those through each legislative session, and if they pass, the joint budget committee considers appropriations to cover their costs.

Davis proposed a couple of possible rule changes, including allowing committees to hold up bills if a certain number of members are concerned about the accuracy of the fiscal note, and appoint subcommittees to review them. Sen. Steve Bair, R-Blackfoot, said committee chairmen already can do that. House Minority Leader John Rusche, D-Lewiston, said, “I have had situations where you know the fiscal note is just not real, and the only choice you have is to move to defeat the bill, and that’s a little extreme.” He said beefing up legislative rules about contesting fiscal notes could help, as could gathering data on whether fiscal notes turn out to be accurate.

Senate Minority Leader Michelle Stennett, D-Ketchum, said Idaho’s fiscal note rules are vague, requiring identifying “a significant expenditure of funds by the state or a unit of local government,” but not defining significant; she noted that other states set a dollar threshold. Davis said he’d support adding a specific amount.  

Hill suggested having the minority and majority leaders from both houses work with Milstead on possible rule changes, for consideration at the next meeting the Legislative Council in the spring, and the council agreed.

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