Buildings budget comes up short

BOISE – Legislative budget writers set a budget for state buildings for next year that’s $20 million less than Gov. Dirk Kempthorne recommended – because the governor hasn’t introduced his bill to extend a cigarette tax increase that otherwise will expire next summer.

“It does not include any cigarette tax at all,” House Appropriations Chairwoman Maxine Bell, R-Jerome, said as she proposed the budget plan Monday morning.

Left out of the $21 million budget were funds to renovate the state Capitol, to build or renovate an office annex across the street, to invest in a major upgrade of Ponderosa State Park at McCall and to step up maintenance and repairs on existing state buildings.

Bell said with no action on the cigarette tax, it was time to set the budget anyway. “I don’t know if it’ll ever show up,” she said.

The Joint Finance-Appropriations Committee endorsed Bell’s plan in a unanimous vote.

Brian Whitlock, the governor’s chief of staff, said, “We have a bill on our desk and ready to go, as soon as we get a green light to introduce it.”

He acknowledged that others have targeted that same cigarette tax money for other uses, including budget-balancing, new programs and a water-rights settlement in southern Idaho.

“Those are all things that have circulated over there” in the Legislature, Whitlock said. “At the end of the day, we still think it’s best to make that permanent and to direct it to the permanent building fund.”

However, Rep. Dolores Crow, R-Nampa, chairwoman of the House Revenue and Taxation Committee, said, “I will not hear that bill in my committee.”

Crow noted that a temporary 1 percent sales tax increase that was imposed at the same time as the cigarette tax increase two years ago is being allowed to expire on schedule. She said the cigarette tax increase should be treated no differently.

“I don’t think it’s right,” Crow said. “A promise is a promise.”

However, she added, “I’ve not seen a bill. Nobody’s brought me a thing.”

Crow’s committee typically considers all tax legislation. “They could go around me,” she said. “It’s been done before.”

House Speaker Bruce Newcomb, R-Burley, said, “We’re just waiting right now. We’ve got a lot of irons in the fire.”

One unknown, he said, is whether Kempthorne will veto any of the budget bills JFAC has written. Nearly all are below the governor’s recommended spending level. If the governor vetoed budgets, and lawmakers couldn’t override the vetoes, new, larger budget bills would have to be written – and they’d have to be funded.

“We do have to balance the budget,” Newcomb said. Cigarette tax money might be needed for that, he said.

Newcomb noted that there could be start-up costs for a water settlement, in the form of bridge loans, even if water users ultimately bear the full cost. That settlement, involving a huge water-rights dispute in southern Idaho, still is being negotiated.

The longtime speaker said there are many pressing budget needs, and if the cigarette tax increase were made permanent now, many interests would try to tap into it. “If you get it out there now, people will view it as a slush fund, a fund they could access to fund their programs,” Newcomb said. “I learned a long time ago, you don’t cross the bridge ‘til it’s time to cross it.”

JFAC has set nearly all the major pieces of the state’s $2 billion-plus budget for next year, but still has to decide several costly questions, including whether state employees and teachers will get raises next year.

Newcomb said, “Basically, I don’t think many people in this body like to raise taxes, but the path of least resistance is cigarettes, because the cost of smoking is tremendous.”

Two years ago, Idaho raised its cigarette tax from 28 cents a pack to 57 cents. Lawmakers set the increase to expire this summer, though the governor wanted it to be permanent. Since the increase was approved, surrounding states have raised their cigarette taxes to the point that Idaho’s 57 cents is now the lowest in the region.

Asked if he personally favored keeping Idaho’s current, higher cigarette tax in place, Newcomb said, “It wouldn’t hurt my feelings, as an ex-smoker.”