Otter's Budget Recommendation
And other legislative doings from a Seat in the House
The second legislative session of the sixty-first Idaho legislature convened on January 9 and the major event of the day was the State of the State presentation and budget recommendations presented to the full legislature by Idaho Governor Otter.
The Governor presented a cautiously optimistic view of the state’s economic condition which was reinforced in his budget recommendations. The Governor based his budget recommendations on a Fiscal Year (FY-13) General Fund revenue forecast of $2,700,260,000, an increase of 5.8 percent over the current year; however, he capped his spending recommendations based on a conservative 5 percent increase over the present year.
Governor Otter emphasized that his top priorities for FY-13 were in the area of jobs and education. Five priorities were outlined by the Governor in supporting these top goals. These priorities are:
• Education: The Governor is asking for $31.7 million to fund the “Students Come First” technology and “Pay for Performance” elements in the school reform legislation that was passed last session. This represents a 2.6 percent increase in K-12 support. He is also asking for an increase of $16.9 million (8.1 percent) for our colleges and universities and an increase of $4.4 million (19 percent) for our community colleges.
• Economy: The Governor is asking for $5 million to create a new entity identified as the Global Entrepreneurial Mission. The IGEM is a research initiative that will utilize the capabilities of our universities and private enterprise working in partnership to develop new industry opportunities in Idaho.
• Replenishment of Reserves: Over the last two years we have used up almost all of our reserve accounts to minimize the need for cuts in spending. The Governor is asking that we place $26 million in the Budget Stabilization Account, $29 million in the public education stabilization account and $4.9 million in the higher education stabilization fund to replenish these reserves in the event of adverse economic conditions.
• Employee raises: The Governor is requesting an additional $41 million for state government employees and public school personnel to provide a one-time salary increase of approximately 3 percent.
• Tax Relief: Governor Otter is requesting $45 million be set aside for tax-relief with the legislature proposing tax relief legislation based on the $45 million amount. He is also asking that the grocery tax credit be continued , including a $10 dollar increase in FY-13 for each person filing a tax return.
The legislature, beginning with the Joint Finance and Appropriations Committee, will consider the Governor’s recommendation as it develops the FY-13 budget. In setting its budget recommendations JFAC will also consider whether to adopt the general fund revenue increase of 5.8 percent used by the Governor or adopt a different number to determine agency spending.
JFAC began holding agency hearings on January 10 in preparation for developing spending recommendations for the full legislature to consider. The agency hearings will continue until February 20, at which time the actual budget setting process will begin based on the Governor’s recommendations, the agencies’ spending requests and other information learned during the agency hearing process.
JFAC will complete its budget setting process on March 9. During this time the full legislature will consider individual agency appropriation bills developed by JFAC and then, if approved, send the appropriation bills to the Governor for his approval. If any of the appropriation bills are not approved during the process then JFAC will have to make changes to accommodate concerns expressed when the bills weren’t approved and submit them again for approval by the full legislature and the Governor.
Developing a balanced budget for the upcoming fiscal year is the primary responsibility of the legislature during the session. However, other legislative activity in the form of new or revised legislation is also occurring during the time JFAC is preparing its budget recommendations for approval.
A summary of some of the legislation currently being considered includes:
• Health Insurance Exchange: The 2010 federal health care law provides for a health care exchange that can be implemented by individual states or by the federal government if the states decline to set up an exchange. An Idaho exchange is likely to use an online website to publish various health insurance programs that consumers can evaluate and purchase based on the best value for that purchaser. The health care law has been challenged and is going to be heard by the Supreme Court on its constitutionality. Many Idaho legislators feel that we should not pass insurance exchange legislation until the Supreme Court renders its decision.
• Proposal to end the Personal Property Tax: Under current tax rules businesses have to report the value of almost every item they own to conduct their business and pay a tax based on that value. The tax is an unpopular one within the business community because it requires keeping records on almost all property including chairs, computers, staplers and other property, large or small. Oftentimes the value of the property is difficult to determine because of age and other factors, but the businesses owner still has to pay some tax amount. Because it is difficult and burdensome to comply with the tax, the Idaho Association of Commerce and Industry, with support from Chambers of Commerce and other business groups, is lobbying to eliminate the tax.
• Ethics Reform: Because recent activities of legislators in both parties have raised the concerns of other legislators and members of the public, the leadership of both the Democratic and Republican parties have agreed to work on legislation that would make legislators more accountable for actions that may not be appropriate.
• Camping ban on Occupy Boise group: A group of individuals have been camping on state property across from the Capitol for several months in support of the national Occupy Wall Street movement. A camping ban on the group has cleared a House Committee and is expected to pass the full House and be forwarded to the Senate for its consideration. The purpose of the bill is “not to curtail the right to protest” but instead is aimed at “keeping public property open for all and free of obstructions.” The legislation is similar to a Boise ordinance that prevents camping on city property not designated for camping use.
I will keep River Journal readers informed of the final disposition of these legislative proposals and other legislative activity as we progress through the legislative session and as always please feel free to contact me with issues of concern or input on legislation being considered during this legislative session.
My mailing address in Boise is: P.O. Box 83720, Boise, Idaho 83720-0038 and my phone number is 1-800-626-0471. You can also reach me by email at geskridge(at)house.idaho.gov
Thanks for reading! George