Legislators reject economic projects
Legislative budget writers eying the possibility of an insurmountable budget gap just two years away have rejected Gov. Dirk Kempthorne’s plan to beef up spending on rural development and to coordinate high-tech development in the state.
The Joint Finance-Appropriations Committee voted 18-1 Friday in favor a $7.5 million taxpayer-supported budget for the Department of Commerce and Labor next year, leaving out the $950,000 Kempthorne wanted for his rural programs and $300,000 to boost technology development.
Kempthorne was dismayed by the vote.
“The governor would like to know how you can cut economic development funding for the sake of waiting for the economy to recover enough to begin economic development funding,” said his press secretary, Mike Journee.
But Sandpoint Republican Sen. Shawn Keough said the state cannot afford to draw money from taxpayers when a sizable budget gap could loom for legislators when they return to Boise in 2006.
“It’s a bare budget,” Keough said. “However, it’s reflective of the times we’re in.”
Keough noted that Kempthorne’s rural program already has about $2.9 million available to continue help with economic expansion in struggling communities. The money is used to boost infrastructure that could lead to new jobs.
No legislator came to the rescue of Kempthorne’s rural development proposal, but Boise Democratic Sen. Elliot Werk tried to boost the bottom line with a plan to inject $75,000 into the governor’s technology development plan known as Tech Connect. The $300,000 Kempthorne wanted would have been used to help high-tech businesses get into the marketplace.
“Idaho is in real danger of being left behind,” Werk said, pointing to multimillion-dollar investments in high-tech development in North Dakota, Oregon and Texas.
His proposal failed when only five lawmakers joined him.
Friday marked the first actions the committee has taken to set agency budgets for the next fiscal year, which starts July 1. The legislators are hoping to shave Kempthorne’s $2.2 billion spending proposal by $54 million, thinking that will save them from a financial crisis two years from now.
But even trimming that amount of money wouldn’t necessarily avoid a major future shortfall, depending on how quickly Idaho’s economy, and state tax revenues, recover.
In the Senate on Friday, Moscow GOP Sen. Gary Schroeder said he doubts the state’s plan to retire the 2003 penny sales tax increase this summer will work, and he said lawmakers should be prepared to continue the sales tax at 6 percent rather than dropping it back down to 5 percent as scheduled. The additional penny brings in about $180 million a year.
“The time is now that we need to make tough decisions, not next year,” Schroeder told the Senate. “If we do nothing and let the sales tax sunset, I believe that we face the possibility next year of both having to slash budgets to the level that the electorate will find unacceptable, and raise sales taxes.”