We Need More!
Idaho budget requests increase for the next fiscal year.
The Idaho Division of Financial Management has recently released its October Idaho General Fund Revenue Report for the current fiscal year (FY 14). DFM reports that our September General Fund revenues exceeded our current projection by about 6.4 percent. September receipts totaled 263.6 million dollars, which exceeded the projection of 247.7 million dollars by 15.9 million dollars.
All but one revenue category exceeded its projections for September; miscellaneous revenue was the one exception, with receipts totaling only 9.2 million dollars, which was 600,000 dollars under the forecast.
This was welcome news given that September revenues “more than offset the lower-than-anticipated revenue of the previous two months.” As a result FY 14 revenues at the end of September are 700.1 million dollars, 11.3 million dollars (1.6 percent) higher than the current forecast.
This is good financial news as we prepare to enter the upcoming legislative session. One of the priorities of the legislature each session is to determine the state budget for the upcoming fiscal year; FY 15 for this session, that begins July 1 of next year.
In preparation for developing next year’s fiscal year budget state agencies are required to submit their budget requests to the Governor for the upcoming year. The Governor then considers the agency requests as he prepares his FY 15 budget recommendation that he will present to the legislature in his State of the State address on the first day of the legislative session. The legislature then considers the Governor’s overall spending (appropriation) recommendation as the FY 15 state budget is developed during the session.
The legislature’s Joint Finance and Appropriations Committee begins the legislative process by reviewing the agency requests and then developing final individual agency appropriation recommendations (proposed legislation) to present to the full legislature for approval.
Because JFAC consideration of the agency requests is instrumental in the legislative process for determining the budget, JFAC is also provided a summary of the agencies’ requests prior to the start of the legislative session.
I serve as a member of JFAC and participated in a JFAC meeting held October 2-5 that included a presentation of the agencies’ preliminary appropriation requests for the FY 15 budget.
The budget information we received indicated a substantial increase in spending based on the agencies’ requests. The total increase in General Funds appropriations requested by the agencies, excluding public schools, is an 11.3 percent increase over our projected current FY 14 spending. The Superintendent of Public Schools is requesting an overall 5.9 percent increase in General Funds appropriations.
As indicated above, these requested increases in spending exceed our current year FY 14 General Fund revenues by a significant amount. Assuming a 3 percent growth in revenue for FY 15, General Fund spending would exceed revenue by 57.8 million dollars; at a 4 percent increase, spending would exceed revenues by 29.8 million dollars and a 5 percent increase in spending would exceed revenues by 1.7 million dollars.
I expect the Governor’s budget recommendations in his State of the State address will call for a lower amount than that requested by the agencies. I would also expect the legislature to modify the spending levels as well based on its own interpretation of agency spending need, as well as current information on revenue receipts that will be available over the next few months.
In addition to the agency spending requests, there will be other budget considerations, not the least of which will be an emphasis on replenishing the state savings accounts that have been depleted in order to accommodate reductions in agency appropriations to accommodate the downturn in the economy over the past few years.
As indicated by DFM’s September report, budgeting for these preliminary spending requests and other fiscal needs will present challenges both for the Governor and legislature as we enter the next legislative session and begin addressing the spending requests of the agencies.
No matter the budget challenges, the legislature is required to develop a balanced budget before the session ends and we will accomplish this task before returning home from the 2015 legislative session.
Thanks for reading and as we near the Thanksgiving holiday, let me wish all of the readers of the Journal an enjoyable Thanksgiving and a good time with family and friends as we enter the holiday season. George