Otter’s plan vs. Ybarra’s for discretionary funds draws questions from JFAC

Legislative budget writers had sharp questions for the governor’s school budget analyst, David Hahn, this morning on Gov. Butch Otter’s recommendation to set aside $15 million for health benefits increases in the public school budget. “Would this be added to that budget – would this be adding to the discretionary funds, this would be separate going to insurance?” asked Rep. Steve Miller, R-Fairfield.

Hahn said, “This is separate, in anticipation of the funding committee’s recommendation to pull out, eventually, from discretionary funding, a specific dollar amount to put in as a line item outside of discretionary funding.”

Miller said, “It sounds to me like these are the offset funds. Would the total number of discretionary funds schools have available still be available?”

Hahn gave a yes-and-no answer. For this year: Yes. “The $15 million is additional money,” he said. “That is not part of the discretionary funding. Now having said that, I think this is where we’re getting right to your question, once we decide to pull out a portion for health insurance, because one of the big things that makes up that discretionary funding is health insurance, you ask any district, and a huge percentage of that discretionary funding is for health insurance. Now once a decision is made to pull that out … yes, then there would be an adjustment downward in discretionary funding.”

That prompted a question from JFAC Co-Chair Sen. Shawn Keough, R-Sandpoint.

“My understanding of the interim committee is it’s a two-year committee, and I haven’t seen any legislation come forward on the health benefits issue yet,” she said. “Is that something that is anticipated, in your knowledge, in this session?”

Hahn said, “The governor hopes it will be. And so he’s creating an incentive here for there to be some kind of legislation to address this. The governor wants to see this happen, and so we set aside that $15 million as an encouragement and incentive for there to be some legislation.”

The two-year interim committee that’s studying a possible revamp of the public school funding formula is just entering its second year. The governor’s budget proposal for public schools for next year recommends the extra $15 million for insurance, but no increase in discretionary funds to school districts. State school Superintendent Sherri Ybarra’s proposal calls for an $11.6 million increase in discretionary funds to school districts, which are the funds districts can address to their local needs without specific strings attached to them by the state.