Tax Breaks, Schools Among Options For Spending Surplus

FOR THE RECORD: December 10, 2000, Idaho edition: Figures wrong: The state of Idaho’s budget surplus is expected to exceed $280 million. The Department of Education’s budget exceeds $870 million. Both numbers were inaccurately reported in a story that ran on Thursday’s Handle cover.

Corporate and individual income tax breaks were among ideas discussed Wednesday for spending Idaho’s mammoth budget surplus.

The surplus is projected to exceed $2 billion. But legislators at Wednesday’s Associated Taxpayers of Idaho conference urged caution in light of recent fluctuations in the national economy.

“Whenever money is available without raising taxes, even the most conservative person is tempted to spend it,” said Senate pro tem Bob Geddes, R-Soda Springs. “The surplus should be dedicated to one-time expenditures.”

Jeff Youtz, supervisor of the Idaho legislative budget office, gave suggestions for several such expenditures. Among the proposals were $10 million for a rural economic development initiative and a one-time school facilities “catch-up” appropriation of $49 million.

The possibility of corporate and personal income tax cuts of up to 1 percent was also brought up by several lawmakers.

Senate Minority Leader Clint Stennett, D-Ketchum, suggested fully funding Idaho Public Television’s transition to digital television.

Overall, the mood was one of cautious optimism as legislators brought forward possible uses for the surplus while waiting for the money to materialize. The state has only about one-third of the expected windfall in hand - the rest is projected.

“We don’t really know what the surplus will be yet,” said Rep. Hilde Kellogg, R-Post Falls. “We’ll just have to wait and see.”

The state has several commitments it has already made for some of the surplus money, including legal settlements. Among them is the pending lawsuit over inadequate school facilities.

Also addressed at the conference were ideas for spreading economic wealth into rural areas.

Peter O’Neill, chairman of the governor’s Rural Task Force, suggested a “rural champion” be added to the governor’s cabinet to head a rural development team and create a coordinated effort throughout the state.

“The state needs to step up and be prepared to spend some money,” O’Neill said.

The task force’s wish list also includes a broad-band Internet connection across the state, continued funding for retraining of residents who have lost their jobs in natural resource industries, and a block grant fund to help rural areas develop infrastructure to attract businesses.

Bob Potter, president of Jobs Plus in Coeur d’Alene, said Idaho is going to have to provide incentives such as tax breaks and land if it is going to be able to compete with neighboring states to attract businesses.

“There is a need for more compelling and significant incentives to attract new high-tech companies and create a livable wage,” Potter said.

Marilyn Howard, superintendent of public education, stressed that if the state wants to attract business, it better have well-funded schools. She said she will ask for $8 million for the public schools budget for 2002.