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A Seat in the House

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A Seat in the House

State of Idaho still struggling with lack of funds

The news media reported recently on the Idaho budget shortfall for the current fiscal year (FY10) of approximately 151 million dollars. The media coverage hasn’t presented a great amount of detail so I thought more information on Governor Otter’s actions might be helpful, including the restrictions placed on the Governor when this type of financial action is needed.

The Governor announced his plan of action on September 25 stating that the first step in accommodating the reduced revenues was a holdback that temporarily reduces spending authority for state agencies that will reduce state spending this fiscal year $98,976,100.

The holdback applies only to general funds and involves all departments, agencies and institutions of the Executive Branch that report directly to the Governor and rely on financial support from the state’s general fund. Governor Otter has also asked that the other constitutional officers and other branches of state government also join with him in holding back general fund expenditures.

State law restricts the Governor’s flexibility in addressing a need to change the agency appropriations set by the legislature in the last session. The Governor’s holdback can only be a temporary measure that has to be officially acted upon by the legislature when it reconvenes, January 11 of next year. Furthermore the Governor cannot reduce expenditures greater than needed to meet the shortfall.

The Governor’s order does not apply equally “across the board” to all agencies. The holdback amounts range from 2.5 percent to 7.5 percent depending upon the type of appropriation involved. Critical agencies (such as the correction system and the Health and Welfare agencies) are impacted 2.5 percent to 5 percent; those services recognized as essential (such as colleges and universities, public health districts, and the military division) are experiencing an average 6 percent holdback. Other services such as the Department of Environmental Quality, Administration, Parks and Recreation and others will experience holdbacks at an average of 7.5 percent.

Public education will be protected from the holdback order by spending a portion of the state’s education “rainy-day” fund that the legislature placed in reserve last session. The legislature placed these funds in reserve recognizing that the economy may not recover as rapidly as estimated when establishing the FY10 budget.

The Governor, legislative leadership and the Joint Finance and Appropriations Committee Chairs and Vice-Chairs will continue discussion of how to best meet the reduction in revenues as we move closer to the next session. I will be in a meeting of JFAC later in October and anticipate receiving more budget information and recommended solutions to the revenue problem that the legislature could consider next session.

Aside from Idaho’s financial situation, the federal economic stimulus program has generated a lot of discussion. I attempt to avoid expressing political opinions in this article but am going to deviate from this practice in relative to a couple of the stimulus programs.

There has been a great deal of discussion on the stimulus program relative to the benefit and cost of the program. Some of the programs I can support, especially those that provide improvements to our federal highway system and other infrastructure needs. The Dover Bridge Project is an example. This project has been waiting on funding for several years and was finally funded by federal stimulus dollars. Funding the project in this manner allows the project to be completed sooner while increasing area employment and providing a safer highway sooner than otherwise. The project will also be constructed at a lower cost because of the reduced cost of materials and competition in the construction business during this adverse economic situation that resulted in lower bids than estimated saving taxpayers significant amounts of tax dollars.

The stimulus project most disconcerting to me was the “clunker program.” The following is an analysis of the program that was sent to me on email (original author unknown). I thought it might be “thought-provoking” for RJ readers. As with any analysis it can be questioned but I thought it raised an interesting question on the “benefit” of the program. The analysis is as follows:

A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline. A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.

In this case the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.

The government claims that about 700,000 vehicles were involved in the program resulting in about 224 million gallons per year saved.

That equates to a little over 5 million barrels of oil; 5 million barrels of oil is about one quarter of one day’s US consumption.

At $75 per barrel (current price is about $66 per barrel) the 5 million barrels of oil costs about $350 million.

This means that the taxpayers will be contributing 3 billion dollars of taxpayer dollars to save 350 million dollars and one-quarter of one day of U.S. oil consumption! Assuming that this is a reasonable estimate of the benefit of the “clunker program, one would hope that other provisions of the federal economic stimulus package has more positive benefits.

Thanks for reading! As always please feel free to contact me with issues of concern. My home phone is 265-0123 and my mailing address is: P.O. Box 112, Dover, Idaho 83825. George

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Rep. George Eskridge Rep. George Eskridge the Republican Representative for District 1 in Idaho’s House, George Eskridge can be reached at 208-265-0123 or write PO Box 112, Dover, ID 83825

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