$1 billion in federal stimulus aid may not prevent Idaho budget cuts

BOISE – Idaho still will have to make substantial cuts in state agency budgets, despite the help it will receive from federal economic stimulus funds, state lawmakers said Monday.

“There’s somehow this feeling that this bill will solve all the problems, and it just won’t,” said Senate Finance Chairman Dean Cameron, R-Rupert. Idaho still could face “reductions in every area,” he said.

His comments came after the Legislature’s joint budget committee held its first of four days of hearings Monday on what’s in the stimulus bill for Idaho. The good news: Idaho is eligible for more than $1 billion, including $201.7 million for education budget stabilization, $44.9 million for general-purpose budget stabilization, $181.9 million for highways and bridges, $2.6 million for Head Start, $3.2 million for educational technology, $5 million for homelessness prevention, and $2.1 million for dislocated workers, among a long list of specific purposes for which the state could receive funds.

The downside: “What I’ve found so far is there are some real limitations on the use of this funding,” legislative budget director Cathy Holland-Smith told the joint committee. “It is pretty restrictive.”

The panel will delve into details today on education and economic development funds, including the key question of whether the federal help will allow Idaho to avoid its first-ever cut in public schools funding. Before the stimulus bill passed, the state was looking at up to $130 million in cuts in public schools next year.

Later this week, the joint committee will study details on funds for human services, including changes in the federal Medicaid funding formula, along with natural resources, energy and more. On Friday, the focus will be the impacts of the stimulus on transportation, an area where lawmakers have been mulling a proposal from Gov. Butch Otter to raise taxes and fees to fund more road maintenance.

Sen. Shawn Keough, R-Sandpoint, said, “While there’ll be some help for some things, there’ll still be a need for us to cut our state budget because our people aren’t working and we don’t have tax revenue coming in.”

Legislative budget analysts have been studying the federal legislation in detail. Holland-Smith said the bill is 407 pages, but there’s also a conference report – twice as long – that’s key to understanding the bill, plus explanatory statements. All are available online, she said, at www.recovery.gov and several other Web sites.