Idaho state budget (2008-2009)
From Sunshine Review
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Idaho is facing a $218 million budget gap for fiscal year 2009. The Center on Budget and Policy Priorities projects a larger deficit for fiscal year 2010, $411 million. [1] "We are better off than many states," said Gov. Butch Otter of the state's current and looming budget gaps. However, Otter emphasized that despite the state's relatively good financial stance, "We are not immune from the global economic downturn." [2] In January the Governor called for an approximately 7 percent cut in the total General Fund as compared to what was initially approved for FY 2009; impacting the public school budget for the first time in state history.[3] In March 2009 officials noted that for the 19th month in a row the state's unemployment rate continued to rise.[4] But despite necessary budget cuts, Gov. Otter noted in his State of the State speech that he recommends the use of no more than 35 percent of the state's total reserves. "The unfortunate reality is we just don’t know how long or how bad this economic downturn is going to be. It is by far the wiser and more prudent course to be cautious and conservative in how we use reserve accounts," said Gov. Butch Otter. [2]
[edit] Impact of budget woes
- Main article: State budget crisis, 2009-2010
- For the first time in state history officials recommended reduce the public education budget by $69 million. Teacher salaries are estimated to be cut by 2.6 percent and administrative salaries by 5 percent. According to state officials layoffs are unlikely. [3]
- In 2009 college graduates said that they are finding it harder and harder to find full-time employment in the state. Approximately 35-40 percent of students that graduated from Brigham Young University - Idaho had a job lined up. According to the career development department more students are staying in school longer to avoid the workforce right now. [5]
- In order to reduce the budget costs state officials approved $1.2 million in federal stimulus dollars, in addition to the already scheduled $6.2 million. The additional funds, they said, will reduce personnel cost cuts for state agencies from 5 percent to 3 percent. [6]
- In March state lawmakers recommended cutting the state's higher eduction funding by 5.8 percent. In 2008 the state allocated $447.7 million to higher education, in 2009 they recommended $398.2 million for the University of Idaho, Idaho State University, Boise State University and Lewis-Clark State College. [7]
- In light of the state's hard financial times the Central District Health Department plans to end its Meals on Wheels program in Ada and Elmore counties in southwest Idaho. Running the program is estimated to cost approximately $1 million annually. [8]
- For the 19th straight month Idaho's unemployment rate continued to rise in March 2009. For the month of March state economists evaluated the unemployment rate at 7.1 percent. Total employment fell by 4,600 to less than 697,000. Since March 2008, over 33,000 jobs disappeared, and unemployment rose by 22,000. [4]
[edit] Budget background
Idaho's fiscal year begins July 1 and ends June 30 of the following year. In September individual state agencies submit their budget requests for the next fiscal year. Between October and November the Governor hears from each agency and works with analysts before completing the recommended budget for the upcoming fiscal year. [9] During the first week that the Legislature returns to session in January the Governor presents his budget recommendation. The bill must pass the House and the Senate before it is signed by the Governor. If it does not pass both houses or the Governor vetoes the bill, the process starts over. Adjustments to the bill can be made throughout the year after the bill has already been enacted. [10]
[edit] Budget figures
The following table provides a history of Idaho's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $6.4 [11] | $35.0 [11] |
| 2001 | $7.0 [11] | $35.6 [11] |
| 2002 | $7.6 [11] | $36.7 [11] |
| 2003 | $8.0 [11] | $38.1 [11] |
| 2004 | $8.4 [11] | $42.6 [11] |
| 2005 | $8.9 [11] | $46.4 [11] |
| 2006 | $9.3 [11] | $48.4 [11] |
| 2007 | $9.8 [11] | $51.1 [11] |
| 2008 | $10.2 [11] | $54.0 [11] |
| 2009 | $10.7* [11] | $57.0* [11] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about why the crisis exists
- In January 2009 state revenues came in 13 percent lower than predicted. The drop is estimated at $35 million from a projected $267 million for the month of January. In December 2008 revenues were short by $10.5 million. In total, state legislators estimate a $400 million shortfall for FY 2009 as of February 2009. [12]
- In Ketchum, Idaho tax revenue from lodging and liquor is down 21 percent compared to a year ago in 2008. The city collected approximately $829,000 in during the first six months of FY 2009, $258,000 less than anticipated. [13]
- According to experts, "agriculture is the single biggest contributor to the economic base of Idaho" and contributes approximately 20 percent of total sales in Idaho. Cash receipts totaled $6.3 billion in 2008, compared to 2007's $5.7 billion total.[14]
[edit] Proposed actions
[edit] Governor C.L. "Butch" Otter
As early as September 25, 2008, Gov. Otter ordered state agencies to cut $27 million in spending and to delay another $40.8 million in light of declining revenue and increasing statewide unemployment. In December Otter ordered another 3 percent cut, $130 million, and delayed $54 million of the FY 2009 budget. [15] The delay in funds, said the Governor, are vital to maintaining a reserve should the economy worsen. "Some services that were meeting public demands – and in some cases have become expected of state government – have had to be reduced or eliminated," said Otter. However, for FY 2009, Gov. Otter exempted public schools from budget cuts but did not make the same exemption for FY 2010. "The budget recommendation you received today includes a General Fund allocation for public schools that is about 5-and-one-third percent less than this year’s appropriation," he said. The education budget still represents approximately half of the total General Fund budget for the upcoming fiscal year. In his FY 2010 recommended budget, the Governor recommends a 7 1/2 percent cut to Health and Welfare, 10 percent cut to higher education, 12 percent cut to both Correction and Water Resources, 31 percent cut to the Department of Agriculture, 51 percent cut to Commerce and a 56 percent cut to Parks and Recreation.[2]
Despite the necessary cuts Gov. Otter noted that he does not recommend using more than 35 percent of the state's total reserves in the "Rainy Day funds" for FY 2009 and FY 2010.[2]
[edit] Republicans
After a disappointing revenue update in February 2009 Republican lawmakers said that they are considering across-the-board cuts in pay for the 53,000 state workers and public school teachers as an alternative to widespread layoffs, according to Rep. Scott Bedke. [12] Some lawmakers have suggested delving into the state's savings but Republican legislators oppose the move. Rep. Ken Roberts said that tapping the reserves would only be "setting ourselves up for a potential tax increase." Roberts noted that the reserves should be preserved just in case the economy continues to worsen. [16]
[edit] Democrats
Rep. James Ruchti said in February 2009 that in light of declining revenues and a rising budget gap Democrat lawmakers recommend using some of $390 million in the state's savings accounts. [12] In an effort to prevent cuts to education funding and thwart cuts in teacher salaries some lawmakers recommended using nearly $200 million in state education reserves and money from Idaho's share of the federal economic stimulus package. "I understand we have a hard economy," said Rep. Branden Durst. "I also understand we have hundreds of millions of dollars in stabilization funds we could use." [16]
[edit] Economic Stimulus Package
Idaho is expected to receive $1.25 billion from the $787 billion dollar economic stimulus.[17] All told, the federal stimulus plan would create or save 17,000 jobs in Idaho, based on White House estimates.[18]
For more information on how the federal stimulus funds are being used in the state of Idaho, visit the state recovery website.
According to preliminary reports, Idaho is expected to receive:
- $46 million towards the state food stamp program [19]
- $294,200 towards the Idaho Commission on the Arts [20]
- $19.5 million to the Idaho Department of Environmental Quality for water infrastructure projects [21]
- $201 million in education stabilization funds [22]
- $105 million for low-income and special-needs students [22]
[edit] Budget transparency
Idaho currently has no statewide, official spending database online, despite Idaho Representative Phil Hart's work to promote transparency through Idaho House Bill 177 (2009).
[edit] Legislation
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary | Exemption Level |
|---|---|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
[edit] Limitations and Suggestions
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[23]
- It is estimated that Idaho will receive at least $728 million in federal funding.[24]
- The economic recovery website for Idaho is available here.
[edit] Support for creation of the database
[edit] Public employee salary information
- Information from 2005 about Idaho's state salaries is available from the Des Moines Register here.
- A listing of the Idaho state payroll from 2008 is posted here.
[edit] See Also
Idaho taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Idaho Freedom Foundation
- Idaho Division of Financial Management
- Idaho Legislature, Budget Process Information
- Idaho Government spending
[edit] Additional reading
- Gov. Butch Otter,"State of the state 2009," January 12,2009
- Associated Press,"State budget crisis has steadily worsened," February 14,2009
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," March 13,2009
- ↑ 2.0 2.1 2.2 2.3 Gov. Butch Otter,"State of the state 2009," January 12,2009
- ↑ 3.0 3.1 Fox 12 news,"Idaho's Public School Budget Slashed," March 28,2009
- ↑ 4.0 4.1 2News TV,"Unemployment hits 7 percent," April 3,2009
- ↑ Local News 8,"Graduates Struggle to Find Jobs," April 13,2009
- ↑ Idaho Statesman,"Idaho’s legislative budget-writers need $1.2 million more to cover reducing personnel cost cuts," April 9,2009
- ↑ Associated Press,"Lawmakers slash 5.8% for higher education," March 26,2009
- ↑ Associated Press,"SW Idaho district to end Meals on Wheels program," April 3,2009
- ↑ Idaho Legislature,"Budget process," retrieved April 14,2009
- ↑ Division of Financial Management,"Budget process," retrieved April 14,2009
- ↑ 11.00 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 US Government Spending,"Idaho State and Local spending," retrieved April 13,2009
- ↑ 12.0 12.1 12.2 Idaho Statesman,"Idaho's revenue picture grows darker," February 4,2009
- ↑ Associated Press,"Tax revenue down in popular Idaho resort town," April 8,2009
- ↑ Capital Press,"Local ag economy shines in 2008," April 9,2009
- ↑ Associated Press,"State budget crisis has steadily worsened," February 14,2009
- ↑ 16.0 16.1 Associated Press,"Idaho House: Hold teacher pay, cut retirement perk," March 26,2009
- ↑ Oregon Public Broadcasting,"Idaho’s Governor Releases Stimulus Spending Plan," March 12,2009
- ↑ American Recovery and Reinvestment Act,"Impact," retrieved April 13,2009
- ↑ KIDK,"Health and Welfare receives money for programs," April 12,2009
- ↑ Idaho Statesman,"Idaho arts commission gets slice of stimulus pie," April 13,2009
- ↑ Watertech Online,"EPA announces stimulus funds for water projects," April 10,2009
- ↑ 22.0 22.1 Idaho Statesman,"Stimulus may not keep Idaho school budget intact," February 27,2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State," April 9,2009
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