Otter rejects funds request for slate of commerce plans

BOISE – Gov. Butch Otter has recommended zero funding for a slate of economic development proposals from state commerce officials, from expanding Idaho’s international trade efforts to subsidizing extension of broadband service to rural communities across the state.

Otter wants to separate the state Department of Commerce and Labor back into separate state agencies. As part of that push, he recommended against any of the expanded commerce activities the department requested for next year. As a result, Otter is recommending an overall 30 percent decrease in funding from this year’s level, rather than the department’s requested 10 percent increase.

Roger Madsen, current department head, said the department “can live with” the bare-bones budget.

“I didn’t anticipate the budget crunch to the extent that none of my requests would be funded,” he told the Joint Finance-Appropriations Committee on Monday.

Members of the budget-writing committee were leery about the plan, which cuts off funding for specific initiatives they started last year. Among them: Lawmakers last year approved $5 million in dollar-for-dollar matching grants to extend broadband service to rural communities. The program has extended the service to 79 communities and nearly 50,000 customers, and the department asked for $10 million next year. Otter recommended zero.

A $1 million “deal-closing fund” that Madsen said helped the state land several major employers in the past year was proposed for another $1 million infusion. Otter recommended zero.

Otter also recommended against a new international trade office in India and expanding the current Korea trade office from part-time to full-time; adding a staff position to allow both the Coeur d’Alene and Idaho Falls “governor’s liaison offices” to be staffed full time; $300,000 in funding for the “Tech Connect” program; and continuing a $100,000 small business assistance grant program that helped six Idaho businesses this year.

In all, the governor rejected 17 Commerce and Labor budget requests totaling $18.7 million.

Randy Tilley, the governor’s budget analyst, told the joint committee, “The governor’s looking at separating the departments of Commerce and Labor, and wanting to get a new director in so we can have Roger (Madsen) focus on … labor.”

Lawmakers on the committee questioned how they could budget for such a change when the governor’s office hasn’t yet proposed legislation to split the two agencies.

House Appropriations Chairwoman Maxine Bell, R-Jerome, said, “Mr. Tilley, we need the legislation in place before we can do the budgets.” Deadlines are looming, she noted – lawmakers are scheduled to start setting agency budgets next week. Tilley responded, “We’ve got the legislation in the governor’s office. … We expect to get that out probably in the next day or so.”

Commented Bell, “We wouldn’t mind if it stayed the way it was.”

At the end of his budget presentation, Madsen mused to the lawmakers, “Two years ago, I asked for a lot and got nothing. Last year, I asked for nothing and got a lot. This year, I asked for a lot and got nothing.” Madsen said with a smile that he seems to be one year off each time.

Madsen, who said he supports the governor’s decisions, called the rural broadband matching grant program “a worthwhile pilot program.” He said officials will study it and try to come up with a better plan for the future.

Madsen headed the state Labor Department, which has 640 employees, before it was merged with Commerce, which has 55 employees. He said the state has had great economic success in recent years, and the use of the 24 labor offices across the state for commerce programs has helped in that. He said he expects that cooperation to continue between the two agencies even after they’re separated.

Sen. Shawn Keough, R-Sandpoint, said she thought that was one of the most valuable parts of the merged department. “The department had a … storefront in every community that had a labor office across the state,” Keough said. Prior to that, she said, “We had to pry the economic development folks out of the Boise office with a pry bar to get them into rural Idaho.”