Surplus Could Embarrass Lawmakers
Idaho’s most critical tax-collecting month is past. And revenues are running well ahead of projections, creating a good chance there will be more cash in the state treasury than expected when the books are closed in six weeks.
That’s always good news for state officials. But it could have a bitter taste for Gov. Phil Batt and the Idaho Legislature.
After scrimping during budget deliberations last winter, they won’t look too good if the state winds up with a healthy surplus on June 30.
It also would make state employees even more unhappy.
The Legislature, with Batt’s approval, voted against financing a 2 percent state worker pay increase that the governor had recommended for the spending year that begins July 1. Budget writers cited prospects for lower tax collections as Idaho’s economy slows from the boom times of recent years.
They also worried that the state could face millions of dollars in repairs from a third flood in 16 months if the record snowpack melts away too rapidly.
Denying funding for the 2 percent raise saved $8 million in the new budget, and pinching pennies elsewhere preserved another $3.5 million - small potatoes in a general fund budget that approaches $1.44 billion.
Not surprisingly, many of the state’s 22,000 employees feel they were singled out to balance the budget and to calm the financial fears of edgy lawmakers.
A cash surplus at the end of the current budget year doesn’t mean that the revenue estimates for the next fiscal year are overly conservative and more cash will be generated than legislators had thought.
But it will make an already unhappy state work force unhappier, especially in the face of increases in workers’ health-care costs in July. That means some will wind up with less disposable income than they have now.
Legislative leaders counter that the way the state pays its workers, more than half probably will get more money through merit increases or job upgrades. Senate Majority Leader James Risch predicted even more would receive increases, even though the Legislature didn’t make a specific appropriation for extra hikes.
Through the end of April, state revenue was $19 million ahead of the estimate used to set the current budget. That is expected to drop some due to a late surge in claims for income tax refunds.
And if there is a surplus, the first $6.5 million goes to public schools to offset a spending holdback ordered by the governor last fall.
But there still should be a surplus of several million dollars.
Two Republican representatives, Paul Kjellander and Max Black from northwest Boise, want to at least reimburse state workers for the medical cost increases. They’re drawing up legislation to make a lump-sum reimbursement at the beginning of next year’s session.
They already have the endorsement of House Speaker Michael Simpson.
If that happens, it should ease some of the criticism the governor and Legislature can expect to hear in coming months for stiffing state workers when the state turned out to have extra cash.