Otter’s budget plan takes committee hit

BOISE – Legislative budget writers set the stage Monday for big cuts in Gov. Butch Otter’s proposed budget, with his shift of Idaho State Police funding to get more money for road improvements likely the first casualty.

Otter wanted to shift the funding for Idaho State Police that now comes from gas tax revenues to state general funds, in a two-year phase-in. The idea was to free up more gas tax funds for road work – $9.07 million in the coming year, and $18 million the following year.

“That’s a shift that the budget couldn’t afford at this time,” said Senate Finance Chairman Dean Cameron, R-Rupert.

Said Senate Transportation Chairman John McGee, R-Caldwell, “I’m hopeful we can make that shift … when our economic numbers look better.”

The ISP funding shift is the only piece of the governor’s plan to increase transportation funding that’s emerged so far in this year’s legislative session. But McGee said a full package of proposed tax and fee hikes, from car registration fee increases to local-option taxes, is likely to be introduced within a week to target transportation needs.

At Cameron’s urging, the Joint Finance-Appropriations Committee on Monday approved a sharp change in the division between ongoing and one-time tax revenues that economists expect the state to receive in the next budget year, shifting a $21 million-plus chunk from ongoing to one-time. That means the money can’t go to fund any permanent state program.

The move sharply limits legislators’ options for the budget they’ll begin to set today for next year. Allowing for average 3 percent raises for state employees and school teachers, the total has room for the governor’s proposed $23.8 million grocery tax credit increase for the needy, but not much else.

However, the shift also means there’s more one-time money available for projects like Otter’s proposed $50 million trust fund for college scholarships for needy students.

Cameron’s proposal, which was adopted unanimously, was to accept the governor’s revised revenue forecast for overall state funds — up 1.76 percent in fiscal 2008, and up 2.79 percent for fiscal 2009. But where Otter had projected a 5.38 percent increase in the portion of those funds devoted to ongoing expenses next year, Cameron held that increase to 2.79 percent.

Sen. Elliot Werk, D-Boise, questioned the economic basis for Cameron’s changes to the governor’s figures. “It puts us in a box,” he said.

Cameron responded, “The governor’s ongoing number is significantly higher, and it may be more accurate, I don’t know. We could be erring on the side of caution.”

The new revenue target leaves just $7.5 million available for new ongoing budget items next year, after statutory requirements and other base expenses are taken into account. The governor’s figure would’ve left $28.3 million. It also forestalls the possibility of raising state employee pay an average of 5 percent, as Otter originally proposed.

The joint budget committee will begin setting state agency budgets this morning, with ISP among the first budgets to be set.

The new, lower revenue target and the 3 percent funding for state employee raises will be built into every agency’s budget as it is set.