Eye on Boise: Numbers show Idaho is a big spender? Experts say no

Claims by the Idaho Freedom Foundation that Idaho has become an extravagant spender, outstripping other states, are clearly off the mark. The former chief economist for the state, who served under five governors, labeled them “ludicrous.”

Idaho Freedom Foundation Vice President Fred Birnbaum recently touted that conclusion, based on comparing percentage increases in state general-fund spending in Idaho from 2011 to 2016 to percentage increases for other states.

One problem: that starting point.

Idaho made deep cuts in state spending between 2009 and 2011, with 2011 the dramatically lowest point. The line graph of Idaho’s general-fund spending looks kind of like an upside-down triangle; 2011 is the bottom tip.

Just two years earlier, in 2009, spending was nearly at the 2016 level, creating the two higher points of the triangle.

Birnbaum said he calculated that Idaho’s state general-fund spending increased 28.9 percent from 2011 to 2016, while the average for all other states was a 22.5 percent increase.

“ ‘Conservative’ Idaho is growing spending faster than the average state,” he wrote. He concluded that Idaho could have spent $150 million less over that time period and not had to raise the gas tax to repair its deteriorating roads and bridges.

But what happens if, instead of measuring from that low point in 2011, you make the same kind of comparison from two years earlier, in 2009?

After Birnbaum told me he got his figures from the National Association of State Budget Officers, I contacted NASBO, and its director of state fiscal studies, Brian Sigritz, sent me total state general-fund spending figures for every year from 1991 to 2016.

Comparing those total figures for all states to Idaho’s general-fund expenditure figures, which are readily available from the records of the Joint Finance-Appropriations Committee, I came up with slightly different figures than the Idaho Freedom Foundation for the 2011-16 period. My calculations were the same for Idaho’s general-fund spending increase – 28.9 percent – but slightly higher for the national average, at a 24.5 percent increase.

But from fiscal 2009 to 2016, the national increase in general-fund spending was 21 percent. The increase in Idaho for the same time period? A measly 3.8 percent. By the IFF’s logic, that must show that Idaho state spending has been growing far slower than other states ever since the recession year of 2009, right? And Idaho should have been spending far more?

Nope. Mike Ferguson, the retired longtime Idaho state chief economist, calls Birnbaum’s conclusion – that Idaho has become unnecessarily extravagant – “ludicrous.” Ferguson said, “You can pretty much work numbers, especially by picking start dates and end dates – you can show vastly different things.”

Ferguson, who’s done extensive research that documented a steep decline in Idaho’s investment in public schools as a percentage of the state’s total personal income since 2000, said, “What I can tell you is this: We saw some severe declines in the general fund, and a lot of that was dramatic cuts to education funding. Well, what have they been doing? They’ve been restoring education funding. But we’re still far, far below historical levels, which weren’t extravagant in the first place.”

Economist Don Holley, who teaches economics at Boise State University and is the former chairman of BSU’s Economics Department, said in Birnbaum’s analysis, “He decides he’s going to pick the bottom of the recession, and the recession probably hit Idaho worse than it hit most any other state. Consequently, we probably came out of the recession faster than most any other state. So it doesn’t surprise me that we could’ve grown faster as we came out of the recession, but he’s not looking at how fast we declined.”

When the Idaho Legislature’s Tax Working Group spent months studying the state’s tax system last year, one of its members, Rep. Robert Anderst, R-Nampa, asked legislative budget staffers to look into an interesting question: How does Idaho’s spending compare to other states?

The result was eye-opening. Using U.S. Census Bureau data, analysts presented the panel with two graphs, one showing state and local per-capita expenditures for 2012, the most recent year available; and the other showing just state per-capita expenditures. On the state-only expenditures, Idaho ranked 43rd. And on state and local government expenditures per capita, Idaho was dead last – by a lot.

Holley said Idaho’s state spending is low, largely because its per-capita income is low. “We’re down there with Mississippi on per-capita incomes,” he said. “So how are you going to decide what we should or should not be spending?” Trying to match Idaho’s state spending to a national average rate of increase “doesn’t make sense,” he said. “That’s a question for the Legislature. … That’s a much deeper question than just comparing growth rates of one state to another.”

He added, “We were hit very hard in the recession, and we’ve recovered faster. But as far as general fund revenues are concerned, we’re barely back to where we were before.”

Little’s treasurer is a Risch

An interesting tidbit: In Lt. Gov. Brad Little’s filing with the Idaho secretary of state’s office to form a campaign committee for a run for governor in 2018, he had to name a campaign committee treasurer. His choice? Vicki Risch. She’s the former Idaho first lady and wife of current U.S. Sen. Jim Risch who’s long been known as a force behind Risch’s many successful political campaigns, though she’s never been a paid staffer. The couple have been married more than 45 years.

Idaho political reporter Betsy Z. Russell can be reached at betsyr@spokesman.com or (208) 336-2854.