State faces tough budget year
BOISE — Processes in the Idaho Legislature’s joint budget committee may seem stuck in an arcane world of finance wonks. They might look hopelessly entangled in an uncertainty mirrored by the gray sandstone facade of the state Capitol building.
But even if that’s the case at times, the main deal in the powerful Joint Finance-Appropriations Committee is about how to distribute your tax dollars.
Important job.
“Extremely important, because money pretty much governs everything,” said Sen. Sheryl Nuxoll, R-Cottonwood. “And, money runs everything, so most of the time that’s what people ask: ‘What’s it gonna cost?’ ”
Along those lines, Nuxoll and other North Idaho JFAC members have begun what Sen. Shawn Keough, R-Sandpoint, predicted will be a “tough” legislative session for budgeting.
Keough, a JFAC vice-chair and ninth-term legislator, noted that historically when state budgeters have extra money (such as the nearly $80 million surplus this year) wish lists from state agencies tend to lengthen.
“There are holes in services and we have a list,” Keough said. “I think it (the state budget) will be difficult to sort through.”
Sen. Steve Vick, R-Dalton Gardens, said he expects “big challenges” for the budget committee with both the public education and health and welfare budgets. “Those always seem to be the two biggest challenges because they’re the biggest parts of the budget,” Vick said.
The state budgeting process that got started with preliminary agency hearings last week has Idaho’s sluggish recession recovery as its subtle subtext.
Keough noted that during recent economic outlook and revenue assessment panel hearings, Idaho businesspeople have said the state’s economy hasn’t fully recovered. Those views led the committee to predict state revenue projections at $50 million less than the projection from Otter’s finance staff.
“As it relates to the budget committee, there’s concern among legislators that we’re not out of the woods,” with the economic downturn in Idaho, Keough said.
While the JFAC doesn’t process tax reductions as part of its budgeting work, Vick said that tax cuts could come into the overall picture given the new budget surplus.
“There’ll be some who want to spend it on more appropriations, some who want to put it all in reserves,” Vick said. “I would prefer to put some in reserves and do some as tax cuts.”
Vick advocated deleting the state sales tax paid on groceries. Idaho Republican Gov. Butch Otter suggested in his Monday State of the State and Budget Address that the Legislature further reduce property taxes paid by Idaho businesses, but prioritized restoring $35 million worth of recession-caused cuts to K-12 public schools operations coffers.
Another JFAC member, Rep. George Eskridge, R-Dover, said the budget committee would look at backfilling various budgets, including education.
“We cut back so significantly the last four or five years that now we’ve got some responsibilities to catch up,” Eskridge said.
On Friday, at the end of the first week of this year’s legislative session, second-year budget committee member Nuxoll had issues.
“My biggest issue is so much money is going into (Idaho Department of) Health and Welfare and Medicaid that it’s taking away from other departments that need it, especially schools and corrections,” said Nuxoll, vice-chair of the Senate Health and Welfare Committee.
Lawmakers agreed that some budget committee work will be focused on how much money should be socked away this year in the state’s budget reserve accounts.
Otter said the $400 million several years back in state reserve accounts buoyed Idaho’s budget during recession cutbacks, cushioning what might have been larger chops without that savings.
The governor promoted looking seriously at adding to state savings accounts.
Keough agreed with Otter on the principle of maintaining budget reserves.
“The savings ($400 million) we had before kept us from having to cut spending for three years, “ Keough said. “So that proves the need for having a cushion so you can maintain your basic services.”