Rep George Sayler fights for kids safety rights

Idaho lawmakers will have the opportunity to consider a bill to require licensing of all day care facilities with four or more unrelated children. The day-care licensing bill from Rep. George Sayler, D-Coeur d’Alene, and Sen. Tim Corder, R-Mountain Home. Proposed and killed each year for at least the last five years, this year’s version, Corder told the panel, is “a fine piece of legislation for you to consider this year.” He said, “We cannot cover every problem or guarantee all facilities are safe all the time, but we can … protect more children than we are now.”

The bill would set minimum standards for day cares, including criminal background checks.Rep. George Sayler, D-Coeur d'Alene, says he is hopeful the bill introduced on Monday will pass muster with lawmakers who have declined to act on similar legislation for the past several years.

The state now licenses daycare centers with 13 or more kids and has a certification program for smaller facilities with seven or more children. Smaller daycare operations with six or fewer kids aren't subject to regulation.

House Education Committee introduces bill to elminate field trips

Last week,the House Education Committee introduced legislation that change funding for school trips and extracurricular events--HB 118.

HB 118, also sponsored by Rep. Bob Nonini (R-Coeur d’Alene), Sen. John Goedde (R-Coeur d’Alene), House Speaker Lawerence Denney (R-Midvale), and Senate President Pro Tem Robert Geddes (R-Soda Springs), would significantly change the way school districts are reimbursed for student transportation costs. Under current Idaho law, school districts are reimbursed 85% of the previous year’s bussing costs for transporting students to and from school and field trips. In effect, for every dollar a school district expends on bussing students, the state reimburses the district 85 cents the following year.

This legislation would do several things. First, it would eliminate reimbursement for student field trips. Second, it would require districts with high populations of students in centralized areas to use a different, less financially advantageous, formula for determining transportation reimbursement. Third, the state reimbursement would drop from 85% to 50% for student transportation costs, it would change reimbursement for virtual charter schools from 85% to 70%, and finally, it would reduce reimbursement for charter schools in the initial year of operation from 80% to 60%.

According to the bill sponsors, the changes outlined in HB 118 would potentially save the state millions of dollars. According, to IEA, the more likely scenario is that the savings the state would realize would be shifted to local school districts.

Idaho Legislators confronted by Educators

Teachers confront Legislators

I attended the meeting set up between Goedde and IEA president. Local Educators, legislators, and community members showed up at Coeur d Alene High School at 10am on Saturday. All legislators from Kootenai County were invited. Sayler, Goedde, and Nonini sat on the podium while Hammond and Henderson were in the audience. There was about 100 people in attendance.

Originally, this meeting was to be an opportunity to reassure teachers and educators. However, House Education Committee Chairman Bob Nonini introduced a bill last week as the legislators faced a cut of up to $109 million in the 2010 K-12 education budget. This bill proposed changes to state law that would limit contracts for teachers to a single year.

I was stunned by the angry and defensive responses from Nonini and Goedde. From my seat in the audience, it did not take long to understand that these educators were afraid about their ability to secure a future. Many of the instructors brought legitimate feedback regarding the bill. George Sayler shared the educators' concerns and added his frustration to the conversation while informing Nonini and Goedde that this was reactionary governing without foresight.

You should check out these links:

Legislation draws ire of teachers by Rick Thomas at the Coeur d Alene Press

Idaho lawmakers suggest education cuts by KXLY coverage

Hearings delayed on bill that would end multi-year teacher contracts IdahoStatesman.com

Taking a bite out of education Rexburg Standard Journal

Will Stimulus Really Save Idaho Education?
New West, MT - 23 hours ago
... Education Committee chairman Bob Nonini (R-Coeur d’Alene) postponed three days of hearings, scheduled to start Monday, on two education cost-cutting ...

Note: Nonini and Goedde both said at the Education meeting yesterday that the bill was postponed for a week until more information about the stimulus package was in but they did not say it was off the table. They said that this bill was asked for by the administrators and school board members. Though Sayler said many of those individuals never saw the final draft before printing of the bill. Nonini said that they were aware of the content and it was the direct result from what they were asked to create.


Final, question: Where was Representative Marge Chadderdon? She is the member of the House Education Committee and an elected official Leg Dist 4. Sayler was there. Goedde was there, so where was Chadderdon?

Nonini and Goedde take a swing at education!

The House Education Committee voted yesterday morning to print two bills that not only propose to reduce next year’s appropriation for public schools by millions of dollars from this year’s budget but would also gut the state’s collective bargaining law for teachers. The two bills address issues that some legislators believe are necessary for dealing with the state’s financial crisis. One of the bills (H0118) deals strictly with transportation issues will take away funding for field trips and extracurricular activities trips. In Coeur d Alene school district would lose 30% of their funding. Superintendent Hazel Bauman said this would mean that field trips would be canceled unless children and their parents paid more out of pocket expense.

The other one (H0117) lumps all the budget cuts together and substantially alters the law under which teachers have negotiated their master contracts since 1971.

This bill would

• Eliminate the Early Retirement Incentive Program (ERIP)
• Freeze one year’s worth of teacher and administrator movement on the salary schedule
• Freeze the multiplier at the current level on the statewide salary schedule
• Change the deadline for notifying employees of re-employment from May 25 to July 1
• Allow districts to reduce the pay or contract days of continuing contract teachers, even in the middle of a year, with the stipulation that any such reductions cannot impact student-teacher contact time
• Permit districts to increase the length of a contract without a commensurate salary increase
• Eliminate a formal hearing process for reduction of salary or reduction of contract time for employees and only allow them an informal review with all other affected employees in one hearing
• Allow districts to hire only 95% of the state-funded teaching positions, rather than the current 100%, without losing funding
• Reduce the number of administrative positions funded by the state by 4.7%
• Reduce the maximum length of principal and assistant superintendent contracts from two years to one year
• Specify that master contracts expire at the end of each fiscal year (June 30) and that no terms or conditions carry forward
• Grant districts the right to impose a Reduction in Force (RIF) and reduce salaries and contract days after the expiration of master contracts if a financial emergency is declared by the state

Superintendent Tom Luna has been saying that, other than eliminating ERIP, any statutory changes would be temporary. However, there is not a single sunset clause attached to any of these proposals. They would all be permanent.

How does gutting the collective bargaining and teacher contract laws help the state deal with its financial woes? The fiscal note attached to the bill answers that question by acknowledging that the bargaining provisions “do not have a fiscal impact on the state.” They are included in the legislation to “provide school districts with the additional tools and flexibility that they will need to manage a likely reduction in state funding for employee salaries.”

Bill (H0117) was introduced by Rep. Bob Nonini (R-Coeur d’Alene) who is also the chair of the House Education Committee and is co-sponsored by Speaker of the House Lawerence Denney (R-Midvale), Senate President Pro Tem Sen. Bob Geddes (R-Soda Springs), and Sen. John Goedde (R-Coeur d’Alene), chair of the Senate Education Committee.

The legislators who voted against this draconian measure were Donna Pence (D-Gooding), Liz Chavez (D-Lewiston), Branden Durst (D-Boise), Sue Chew (D-Boise) and Tom Trail (R-Moscow). They were outnumbered by Mack Shirley (R-Rexburg), Sharon Block (R-Twin Falls), Pete Nielsen (R-Mountain Home), Marge Chadderdon (R-Coeur d’Alene), Paul Shepherd (R-Riggins), Rich Wills (R-Glenns Ferry), Steven Thayn (R-Emmett), Marc Gibbs (R-Grace), Stephen Hartgen (R-Twin Falls), and Jeff Thompson (R-Idaho Falls).

Representatives Donna Boe (D-Pocatello) and Jim Marriott (R-Blackfoot) were absent and did not vote.

IEA President Sherri Wood told a reporter: “Basically, it’s an attack on collective bargaining and negotiations that have been in place since 1971. It says every contract will end at the end of the school year and you have to start all over again. That’s just an attack on educators, and has nothing, absolutely nothing to do with budget cuts. This is mean-spirited and it’s wrong, and it doesn’t need to happen.”

Sen. Shawn Keough (R-Sandpoint) told the same reporter that she is “distressed” by this far-reaching legislation. “It looks as though a sledgehammer was used when a scalpel was needed. My experience has been that the teachers union and teachers individually understand where we are with our economy, and have been trying to work with some of us …. Today’s developments are distressing …. We need everybody to pull together. This doesn’t do us any good, in my opinion.”

Note: the House and Senate Education Committees will hold a joint hearing next week, beginning at 8:30 a.m. Monday, Feb. 16, and continuing Tuesday and Wednesday. The hearing is scheduled to last until 10:30 or 11 a.m. each day. IEA President Sherri Wood will testify Monday morning and other IEA members will share their perspectives as well.

Then, on Friday, Feb. 20, Rep. Nonini and Sen. Goedde will present their committees’ recommendations for next year’s appropriation to the Joint Finance-Appropriations Committee.

The following Monday, Feb. 23, the House Education Committee will begin debating the collective bargaining bill. A vote will likely be taken shortly thereafter.

Rapid Downturn in Idaho

Recently, Kaiser Family Foundation release a report listing Idaho as number 3 in the nation. This is based on three key numbers. One in every 479 homes are in some stage of foreclosure. Our unemployment numbers show that we have almost doubled in a year. Additionally there is a 25% increase in food stamp usage. A year ago, Idaho was among one of the fastest growing states. What a difference a year can make. The housing industry sustained our economy and as this downturn continues, the ramifications are spiraling out to the hospitality trade, retail, banking, and etc.

Our state legislators are grappling with cuts, continued bad news regarding revenue, and how to stimulate our local economies. Got a suggestion, idea, or issue, take a moment and email your legislator. Contact info is on the sidebar. It will take all of us to get us back on track.


Check out the state-by-state statistics here.

ERIP Saves money

The potential loss of the Early Retirement Incentive Program (ERIP) is especially disheartening to educators who are planning to apply for early retirement this spring. Because of the way the state budgeting process works, the money in the FY09 budget was spent on those teachers who took early retirement at the end of the 2007-2008 school year. Some officials, including Superintendent Luna believe cutting this program would save $4 million in the FY10 budget.

You may have heard the expression, “Never tear down a fence until you know why it was there in the first place.” Let’s take a minute to understand why we have an ERIP. The Legislature created this program in the mid ’90s with the goal of saving the state money by allowing experienced teachers to retire with a bonus payment and being replaced by a less experienced (and less expensive) teacher. Since the implementation of ERIP in FY96, the state has saved approximately $90 million in salary and benefit allocations for the teachers who have chosen to retire early. This savings is above the implementation cost of the program. That’s a huge savings to the state.

How did this savings occur? The average age of ERIP participants has been 58, while the average retirement age for Idaho teachers in general has been at least 60. If each group of retiring teachers had continued to work until they reached the age of 60, they would have continued to make the same or greater salary during those years, depending upon whether the Legislature increased the calculating base salary. Instead, they were replaced by newer teachers and Idaho saved thousands of dollars.

Although the savings haven’t been quite as high over the last few years, projections show that the state will continue to at least triple their investment in this program.

Rep. Fred Wood (R-Burley) raised an important consideration during the JFAC hearing yesterday. He noted that under Superintendent Luna’s proposal, the state will be asking school districts to absorb a $15 million reduction in the salary allocation formula, perhaps by not filling vacated positions. Funding ERIP might encourage more teachers to retire, thus making attrition the least painful way to absorb the $15 million loss.

Luna makes Recommendations for Idaho Schools

Superintendent Tom Luna opened his presentation to members of the Joint Finance and Appropriations Committee (JFAC) this morning by saying, “I do not want to cut education funding. Unfortunately, with the economic outlook getting worse every day, public education can no longer sit this one out. With input from educational stakeholders from across the state, I crafted a thoughtful, measured and strategic budget that will move student achievement forward in the coming year despite a reduction in the amount of money we will spend.”

He then recommended $62 million in cuts to the FY10 public schools budget:

1. Reduce the discretionary funds by the amount the state distributes for maintenance and allow local school districts to expend maintenance funds on things other than maintenance projects ($20.8 million)
2. Eliminate state reimbursement for field trips, repair trips, etc. ($2.5 million)
3. Do not allow urban districts access to all of the cost-per-mile measures for student transportation ($1.7 million)
4. Reduce the administrative staff allowance in the funding formula, which would effectively eliminate 35-40 administrative positions ($3.9 million)
5. Eliminate the Early Retirement Incentive Program for teachers ($4 million)
6. Freeze the experience movement on the salary grid for one year ($6.13 million)
7. Reduce base salaries for all school personnel (teachers, administrators, and classified employees) by the equivalent of three contract days and specify that local districts decide how to absorb the resulting loss of funds, possibly through attrition, furloughs or pay cuts ($14.15 million)
8. Reduce the discretionary funds by the amount school districts are required to match for textbooks and then relieve districts from the requirement to provide matching funds ($3.3 million)
9. Reduce state funding for textbooks by 40% ($3.8 million)
10. Reduce funding for classroom supplies from $350 to $300 per classroom teacher ($781,000)

Luna also recommended the legislature transfer $17 million from the Public Education Stabilization Fund into next year’s appropriation.

Legislators asks for input

Representative Wendy Jaquet asks for your input as they struggle to find ways to cut education.
Here are some suggestions sent via email across the state:

........Some options for cost savings have been suggested. We could reduce the teacher contract days by five days. This would be a furlough, similar to what is happening in several state agencies. Each day equals $5.3 million dollars; Five days equals $26 .5 million. We could reduce the teacher staff allowance. About 1,400 teachers leave each year. This reduction would reduce the number of teachers by 600. Each district would have the flexibility to protect critical programs. This would save about $37 million dollars. We could also freeze the salary increases for experience for one year, resulting in $6 million in savings.

We could defer new textbooks, $9,950,000 or eliminate state funding for school supplies, $5,379,500. We could repeal the math initiative at $3.9 million dollars. We could eliminate teacher early retirement, $4 million dollars. We could use the $25 million dollars set aside for safety improvements and we could eliminate the maintenance requirement reserve, resulting in $21 million dollars in savings. We could allow appropriate advertising inside school buses.

We could go to a four day school week which could possibly save up to $28 million dollars. We could go to an alternating all day kindergarten and not reimburse for mid-day school bussing, saving $6 million dollars. We could eliminate bussing for field trips, etc. to save $5 million.

Feel free to post your ideas or comments here or contact Representative Jaguet directly at wjaquet@house.idaho.gov or by phone at 208/332-1211.

See rest of email/website click here.

Thank you for your input.

Homeowners Exemption Law

The House voted 65-0 to change a word in the homeowners' exemption law so the exemption can "change" annually as average home prices change, not just "increase."
....Rep. George Sayler, D-Coeur d'Alene, said the move "is not a change in policy. It corrects the legislation to go back to the intent of the policy." The bill is retroactive to Jan. 1.

Complete Article Here.

Educators see no easy ways to cut spending on schools - Idaho Statesman

Article posted on Idaho Statesman

Districts face difficult choices in quest to keep budget slashing from affecting kids

By Bill Roberts

Idaho's 272,000 public school students could face a shorter academic year, fewer teachers and staggered kindergartens next fall as public education braces for unprecedented budget cuts caused by the withering economy.

Facing possible reductions of up to $130 million, school districts once planning expanded programs are now talking about saving jobs and protecting student-teacher contact time.

Some parents say the state's priorities are misplaced as leaders talk of cutting education while they consider raising taxes and fees to fix Idaho's roads.

"It's insane," said Amy Ditton, a mother with two children at Paramount Elementary School in Meridian. "The bumpy roads are more important than the country's future."...

But educators are talking about lots of ideas, and every choice comes with an impact:

SHORTEN THE SCHOOL YEAR

Every day shaved off the academic calender saves about $5.3 million statewide...

CUT TEACHERS

The state could reduce the number of instructors it pays by tweaking the formula that allocates teachers to districts...

SAVE ON TRANSPORTATION

In the Marsing School District, Superintendent Harold Shockley is evaluating the pros and cons of saving $45,000 by changing the kindergarten bus schedule...

PUT INITIATIVES ON HOLD

If education must be cut, the state should not be funding initiatives and projects like paying $350 to teachers for supplies each year - at a cost of more than $5 million - until the financial crisis passes, Clark said. "No sacred cows," she said...

For the whole article click here.

Nampa's Jr. Representative, still stumbling - Unequivocal Notion

On January 22nd Chris over at unequivocal notion commented:

One gripe I had about the Idaho Statesman and the Idaho Press-Tribune endorsing Rep. Steve Kren (Nampa, 13B) was that they both acknowledged his weak performances as an appointed two-term representative. Everyone knew that Kren, after two sessions still had a lot to learn, he was still behind the curve.

There was talk about letting him learn the ropes, but that more was expected of him in the 2009 and 2010 legislative sessions.

Well, Nampa, you get what you vote for -- while we should have dedicated lifelong educator Byron Yankey representing Nampa in the legislature when Superintendent of Public Instruction Tom Luna is planning to slash the education budget. Instead we have a representative doing his own bidding and the bidding for big Idaho lobbyists...

(For Example)

...Rule to toughen septic-system standards narrowly clears subcommittee

A House subcommittee narrowly approved a rule toughening standards for new septic systems Tuesday, but a final decision on changes opposed by the Idaho Association of Realtors won't be made for some time.

On a 3-2 vote, the subcommittee of the House, Energy and Environment Committee sent the rule to the full committee with a recommendation for approval. Supporters were GOP Reps. Eric Anderson of Priest Lake and Steve Hartgen of Twin Falls and Democrat Elaine Smith of Pocatello. GOP Reps. Steve Kren of Nampa and Dick Harwood of St. Maries wanted the rule referred with a recommendation it be rejected.

No worry that Kren accepted $750 from the Idaho Realtor's PAC, you know, the PAC that was just accused of bribing candidates exactly for votes on septic systems. Even after the Idaho Realtor's PAC was outed red-handed by an Treasure Valley Republican, Kren, unabashedly voted for the PAC's concerning the laws governing septic systems...

But no, that wasn't Kren's only stumble of the week old legislative session:

Panel peppers Kren with questions

Rep. Steve Kren, R-Nampa, got himself peppered with questions today when he proposed legislation in the House Resources Committee to limit so-called "super hunts" mostly to state residents, allowing only 10 percent of the permits to go to non-residents...

“I think it’s important that Fish & Game works hard for the sportsmen, and understands that it’s the residents of the state who they work for.”

Kren, who said he’s entered the raffle himself “a couple of years” since it began four years ago, never checked with Fish & Game before introducing the bill. F&G information supervisor Ed Mitchell said the super hunt permits are a special deal, “a whole separate thing to raise money for our Access Yes program.” That program pays landowners for easements to allow hunters access; it’s ensured access to about half a million acres statewide so far, and the department hopes to take it up to a million acres. Last year, the super hunt raffle raised about $140,000 for the access program.

[...]

Resources committee members closely questioned Kren about whether his bill would cost Fish & Game money at a time when it’s strapped and seeking a fee increase. “Will that impact revenues for Fish & Game?” asked Rep. George Sayler, D-Coeur d’Alene. “I don’t believe it will,” Kren responded.

When do we hold our legislatures accountable?

For the rest of the post click here.

Idaho state budget woes worsen - The Spokesman-Review

By Betsy Z. Russell

BOISE - Idaho's state budget challenges grew tougher Thursday, as lawmakers concluded the governor's estimate for how much tax revenue will fall next year didn't go far enough.

If the new estimate stands, lawmakers would have to slice $101 million beyond the steep budget cuts Gov. Butch Otter already is recommending or find the money elsewhere by dipping deep into rainy-day funds or raising taxes.

Sen. John Goedde, R-Coeur d'Alene, chairman of the special economic outlook and revenue assessment committee, noted that the panel heard two days of dismal economic news last week from Idaho industries, agencies and economists. "Based on the testimony that the committee received ... we felt that the governor's projections are over-optimistic," Goedde said.

The committee's decision, which will go before the Legislature's joint budget committee this morning, came as hundreds of people with disabilities, their family members and advocates from around the state converged on the Capitol annex to protest budget cuts in services.

Protesters toted signs saying, "No Medicaid Cuts," "Our Community Includes ME," and "Do you enjoy living in your own home? So does my son!" The crowd rallied outside the annex, then streamed inside to collar their local legislators.

Goedde said a North Idaho mother of two autistic children, with whom he's exchanged letters, came to see him. "I had a discussion with her," he said. "There's nothing easy about budget cuts."

Rep. Frank Henderson, R-Post Falls, voted for the lower revenue prediction, which passed with only one "no" vote, from Rep. Bill Killen, D-Boise.

"I unfortunately think it's the safest course to take," Henderson said. "It'll make us work much harder on the budget. It'll make us make cuts we need to do."

Henderson said he, too, heard from constituents concerned about cuts in Medicaid. "Of course they're concerned, and we're very conscious of that," he said. "That's why it makes this so difficult. But sometimes we have to put limits on very critical programs."

He noted that cuts also are looming for senior programs such as Meals on Wheels and respite care, "critical things that help seniors stay in their homes. It's not easy to do those, but when you don't have the money, you don't have the money."

The protesters were especially concerned about the 4 percent midyear budget cut, or holdback, Otter already has imposed, and resulting reductions in treatment hours for disabled children and adults. On Thursday morning, the Joint Finance-Appropriations Committee voted unanimously to make those cuts permanent.

Said Senate Finance Chairman Dean Cameron, R-Rupert, "I guess we can only hope and pray that it doesn't get worse before it gets better."

No one voted "no" on the cuts. Two lawmakers, Rep. Janice McGeachin, R-Idaho Falls, and Sen. Nicole LeFavour, D-Boise, later spoke at the rally.

"I'm going to do all I can to try to minimize the impact," McGeachin said. Advocates at the rally said they hope that when the House and Senate Health and Welfare committees review rules for implementing the 4 percent cuts, they'll soften the effect by making them temporary and allowing for exceptions.

Katherine Hansen, of the Idaho Association of Developmental Disability Agencies, said that in some cases, cuts in treatment hours may end up costing the state more, because of their harm to patients. One woman held a toddler bundled in pink, along with a sign saying, "I am the face of the governor's holdbacks."

The special revenue committee accepted the governor's revenue estimate for the current year, fiscal year 2009, of $2.6338 billion - down 9.5 percent from the previous year. But instead of accepting his estimate for fiscal 2010 of $2.6593 billion, the committee went with $2.5579 billion. That's $101.4 million less.

The budget Otter is proposing for fiscal year 2010, which starts July 1, already is 7.3 percent below the original budget lawmakers set for this year. With another $101.4 million taken out of it, that 7.3 percent cut would grow to 10.8 percent.

Budget cuts hit some Idaho agencies harder - Idaho Statesman

By Kathleen Kreller

While the governor called for 7.3% less spending overall, 4 departments face reductions ranging from 31% to 56%.

Four of Idaho's agencies and institutions could have their budgets pared by more than 30 percent next fiscal year, and if the recommendations by Gov. Butch Otter are approved by the Legislature, Treasure Valley residents could feel the pinch.

Repair and maintenance projects at state parks, like Lucky Peak, could be delayed. If you live in the Boise Front or parts of Emmett, you may not get a digital television signal from Idaho Public Television. If you sell or apply chemicals, you may lose work from the Department of Agriculture. Rural areas won't likely see any grants to improve infrastructure and attract new businesses.

Otter proposed an overall reduction in state spending of 7.33 percent. These agencies face larger cuts based on recommendations from Otter's staff about which spending is less critical.

Other than eliminating some one-time spending, the agencies will decide how to make the cuts work.

PARKS AND RECREATION

General fund appropriations would drop 55.83 percent from $16 million in the fiscal year ending June 30 to just over $7 million.

Park visitors may feel some "inconveniences," department spokeswoman Jennifer Wernex said. The department won't have money for a long list of capital projects.

"It's also going to limit our ability to address facility repair," Wernex said. "Things are tight, so the department will have to prioritize."

There is a bit of money in the budget for things like restroom and sidewalk repairs, but if something breaks, repairs could be delayed, she said.

One state park could close: Old Mission State Park, named for the old Cataldo Mission and owned by the Coeur d'Alene Tribe. The Mission of the Sacred Heart is the oldest standing building in Idaho, built between 1848 and 1853 by members of the tribe and Catholic missionaries. Wernex said because the agency doesn't own the park, it was identified as a place to save money. The department is working with the tribe to keep the park open.

The department may hire fewer seasonal workers for the summer camping season.

PUBLIC TELEVISION

IPTV could lose 51 percent of this year's original $3.5 million general fund appropriation. Otter recommends $1.7 million.

Nearly all of the cut is in spending to make the federally required conversion from analog television signals to digital, scheduled to happen next month. Otter recommends no money for the coming year. He also recommends a 4.3 percent cut in general operations.

General Manager Peter Morrill said the Federal Communications Commission just two weeks ago told public television stations to apply for licenses that would allow them to buy and use new equipment to boost their digital broadcast signals in areas where signals are blocked by geography. Idaho has seven such areas: the Portneuf Valley; portions of the Wood River Valley near Hailey, Ketchum and Sun Valley; Glenns Ferry; Idaho City; the east side of Emmett; the Boise Front along the Foothills; and the Harris Ranch area of east Boise.

Once the licenses are granted, stations have just six months to get the new facilities working. The last time the FCC offered such licenses was 15 years ago, Morrill said.

"We believe this is critical," Morrill said. "If the door closes on this, we probably won't have another opportunity."

IPTV has applied for $1.7 million in grants to help pay for the purchase and installation of equipment to boost the signals to those areas. But the grants require local matching dollars.

Morrill said the opportunity developed after the budget was submitted. So he'll ask the Legislature to find another $300,000 to match any grants. Otherwise IPTV won't get the grants and the seven areas could remain without a digital signal.

COMMERCE

Otter recommends a nearly 41 percent drop in general funds for the Commerce Department, which markets the state and promotes new businesses and jobs. Spending would fall to $5.4 million, a cut of $3.8 million.

The biggest cut is likely to be in a grant program to help rural communities build infrastructure that brings jobs, said Bibiana Nertney, a department spokeswoman. The communities must match those grants, and in the weaker economy applications aren't coming in, so those dollars became an easy target, she said.

The cuts also reflect the loss of $1.5 million in one-time money for the promotion of the 2009 Special Olympics World Winter Games that begin next month and some one-time federal money, Nertney said. The department also eliminated $50,000 for a paid internship program. Other cuts will come in travel, subscriptions and light bills.

One bright spot for Commerce: Otter has included $717,000 for Project 60, an economic development initiative to expand Idaho's economy to $60 billion a year.

AGRICULTURE

The Department of Agriculture faces a 31 percent cut, to $11.7 million from $17 million. The agency is cutting five positions. The department plans to stretch prior appropriations to help eradicate Eurasian water milfoil, an invasive plant that chokes lakes and waterways, through the next fiscal year, said Kelly Nielsen, the department's financial officer.

Spokesman: Audit cites poor maintenanace of Idaho Roads

Changes could save state millions

Betsy Z. Russell
Staff writer

What’s next

The Idaho House and Senate transportation committees will hold a joint hearing today on the performance audit of the Idaho Transportation Department.

BOISE – A long-awaited performance audit of the Idaho Transportation Department suggests the state could save millions through better management – but could save hundreds of millions by better maintaining the roads and bridges it already has.

“The current situation facing Idaho’s highway system is untenable,” declared auditor Bob Thomas, a consultant from Olympia. “The state is falling further and further behind in its ability to maintain and preserve its highway and bridge infrastructure. … Idaho is getting further and further into a hole.”

Senate Transportation Chairman John McGee, R-Caldwell, said the report “reiterates what the governor’s been saying for the last two years: Our roads are falling apart. … You pay a little bit now, or you pay a heck of a lot later.”

Gov. Butch Otter welcomed the results of the $450,000 audit, which the Legislature commissioned last year. Consultants extensively analyzed the department and its operations, and compared it with transportation departments in nine other states.

“Simply put, we are trying to accomplish 2009 goals with 1996 dollars,” Otter wrote in his formal response to the audit, adding that he’s directing ITD Director Pamela Lowe to review the audit findings and develop “action plans” to address them.

Otter has proposed a combination of small gas-tax increases, car and truck registration fee increases, a rental car tax and other measures that over the next five years would garner up to an additional $174.5 million a year in funding for roads. But the audit looked at his original proposal last year, for $240 million in taxes and fees, and concluded even that wouldn’t be enough.

Because 38 percent of that increase would go to local highway jurisdictions and 5 percent to the Idaho State Police under Idaho’s existing distribution formula for highway funds, the $240 million plan would bring ITD just $137 million, the audit found. At that figure, “preservation and rehabilitation of existing infrastructure will fall $55 million short through 2013,” the audit predicted.

Auditors recommended a $6 million investment in a new maintenance management system, a computer software system that Idaho lacks. They also predicted $11 million in savings over the next five years from various management improvements and said Idaho could save up to $19.6 million on its bond issues by following different short-term interest rate strategies, though ITD disputed that.

Other recommendations include switching from the current “worst-first” strategy for managing deteriorating roads, to a “preservation-first” approach that fixes roads sooner; more statewide coordination of what the audit termed an excessively decentralized department; prioritizing maintenance, restoration and preservation of existing roads and bridges ahead of building new ones; and rigorous and independent cost-effectiveness evaluations for new road construction projects.

Betsy Z. Russell can be reached toll-free at (866) 336-2854 or bzrussell@gmail.com.

Greeting from the Idaho Statehouse

Legislative Update

Week 2 - January 20, 2009

Greetings from the Idaho Statehouse:

The Office of Performance Evaluations via the Joint Legislative Oversight Committee released the long awaited Idaho Transportation Performance Audit on Monday. The consultants said our highway program situation is "untenable". They indicated that the Idaho Department of Transportation, ITD, funding is not enough to catch up and match the expected costs of maintaining and preserving state highways and bridges; our highways are deteriorating faster than resources are available and the costs to do road construction are rising faster than inflation; they said that $137 million dollars is merited and probably understated; they criticized the department because they believe ITD's programs are reactive in nature; that the department doesn't have a strategic vision and that there is no coordinated long term/infrastructure management plan. The consultants made three points: 1. Funding is not sufficient , 2. The department doesn't have the tools to do the job and 3. As the tools are enhanced in the department, most of the work will be done in house. The department's first priority should be maintenance, preservation and restoration. New projects should not be allowed to take away funding for these priorities.

The consultants also expressed concern about 38% of the fuel tax funding which goes to the "locals", the over 200 highway districts, cities and counties across the state. They recommended more transparency be made available and oversight and accountability.

The ITD Chair responded that the department had developed a pavement, maintenance and preservation management system, but it had been closed down.

If the performance audit recommendations are implemented, the consultants indicated that $19.6 million dollars would be saved on a one time basis; that $11 million could be saved in five years. A $6.6 million dollar management system would be instrumental in increasing the manangement system. The ITD could save $5 million in improved

productivity in two years. Down the road they predicted that the implementation of their recommendations could save the state hundreds of millions of dollars.

The Governor and staff have indicated that the state has $240 million in needs. His proposal includes a 2 cent increase in fuel tax over five years which will generate $88 million in five years. He wants to increase registrations from $15 million to $51 million and to raise an excise tax on rental cars at 6 cents. This will generate $174 million dollars in 5 years.

The two big issues that we will deal with in this legislative session are the budget and the transportation situation. I look forward to your comments. wjaquet@house.idaho.gov 208/332-1211.

Democratic lawmakers question misplaced priorities

Written by Idaho Democratic Legislative Caucus

The following is the Idaho Democratic Legislative Caucus’ response to Gov. Butch Otter’s State of the State message, delivered this morning by House Minority Leader John Rusche and Senate Assistant Minority Leader Kate Kelly.

(John Rusche) The legislative session has just begun, and like all Idahoans, we know that the economy is in crisis. Idaho families feel this in their own wallets, retirement accounts and squeezed budgets. Yesterday, Gov. Otter said that just as Idaho families and businesses are tightening their belts, but state government must also cut spending. Idaho Democrats agree.

A year ago, we stood here and spoke about the “do-nothing legislature of 2007” and how it left town with few real solutions to the serious problems facing Idaho. Well, in 2008 the legislature again failed to address our most pressing problems. Last fall, however, our chronically unfinished business collided with the worst economic downturn in decades, and now the crisis we all face is much worse. This year, as the Governor said, the legislature must take responsibility to preserve critical services for Idaho families and empower people to decide their own futures.

(Kate Kelly) We agree with the governor on the need for fiscal responsibility and smaller government. We applaud the move toward zero-based budgeting, the quest for more efficiency in the Idaho Transportation Department and the move toward reorganizing the Department of Education and State Board of Education. We like the idea of seeing whether the trucking industry is carrying its share of the costs for maintenance of our roads and bridges. In his remarks, Governor Otter offered a glimpse into the same sort of post-partisan future we are seeing take shape in Washington, D.C., and the wisdom of meeting in the middle whenever we can.

But we also saw many misplaced priorities – and missed opportunities - in what the governor had to say yesterday, and in the policies we’ve seen take hold so far during this budget crisis. For example, was it wise for the Idaho Tax Commission – at a time of plummeting revenues – to lay off 65 employees who were chasing after tax cheats? Is it wise to slash the Department of Commerce budget at a time when we need to attract new jobs and keep the ones we have? Is it smart to ask Idahoans to pay more for road maintenance while cutting school resources, the best engine we have for our future economic security?

(John) The Governor’s proposed budget is a lose-lose for the people of Idaho – cutting education and healthcare while raising taxes to fill potholes. In these troubled economic times it is just plain wrong. It’s wrong for Idaho’s struggling economy and its wrong for struggling Idaho families and businesses. Our goal this session will be to help our colleagues in the Majority face the issues responsibly. We will encourage the state to use Idaho taxpayer dollars for their highest and best use. We will not sacrifice our state’s long-term future for short-term gain, nor will we turn away ready resources that can equip Idahoans with the tools we need to quickly pull out of this recession.

The governor mentioned his reluctance to use very much of the state’s rainy day funds - our emergency funds. Our tax dollars created these rainy day funds; they’re there for a purpose. We’re well beyond raining; in fact we need a new ark., We need to use a portion of these funds at this time, and we must use them appropriately, to preserve critical services for Idaho families and keep our eyes on the horizon for when the economy improves.

Education is the best and most powerful road to economic opportunity, for our families and to attract and keep good businesses, yet it’s a road we won’t be able to travel if we make drastic cuts to public schools and higher education during this downturn. Like all Idahoans, we know that we must tighten the belt of state government. However, raising taxes for roads while severely cutting the budgets for education and healthcare is irresponsible. Idaho’s middle class families take personal responsibility for our households and deserve accountability and value for our dollars. We can’t ask our children to repeat the second grade because they can’t learn in overcrowded classrooms. We can’t ask jobless people to wait to learn new skills at our colleges and vocational-technical centers. But we can wait a year or two to fix our roads.

(Kate) As Idahoans, we’ve all been on a wild and terrifying ride this past year. Gas costs less than half today than it did six months ago, but higher costs for groceries and health insurance mean we’re still strapped, especially as our home values and retirement accounts shrink. Idaho’s jobless rate has doubled. Families are struggling to deal with job losses and with insecurity in the jobs they do hold. People are having trouble feeding their animals, never mind putting food on their own tables. This simply is not the time to raise taxes on Idaho families … not at the same time the governor is calling for drastic cuts to education and other essential services when we need them most.

Taking responsibility also includes trusting the people. Why can’t the legislature trust Idaho’s citizens and local communities to decide for themselves what local road and transportation projects to fund? Like most Idahoans, we believe in local control, local decisions and local responsibility. It’s time for this legislature to remove this roadblock to local road projects and approve local option authority without an unneeded and unwise Constitutional amendment.

Energy is one area on which we heard very little from the Governor yesterday. Just as the Majority Party has lacked the foresight to trust communities to solve local problems, the Legislature and the Governor have not done nearly enough to create clean, green jobs or address the reality of climate change. We are far behind our neighboring states, which are much better positioned to take advantage of the coming new energy economy with good, high wage jobs that will reduce our dependence on Middle Eastern oil tyrants while growing our economy.

(John) The governor talked about economic development, but he didn’t offer a true vision of how Idaho could lead the United States in becoming an innovator in renewable energy, agriculture or telecommunications solutions. We were troubled by the decision to cut the Department of Commerce budget at a time of growing challenges for Idaho businesses. The governor also didn’t say much about the need to extend broadband to rural communities where unemployment rates are running as high as 10 percent above the state average. These are areas that deserve our attention now. If we can use this current crisis as a time to draw the players together and face these long-neglected issues, our communities and families will emerge stronger from this recession.

Like all Idahoans, we sense we are at a historic crossroads. Next week, our nation will see a new administration come into office, determined to reach across party lines to put America back to work, help us afford health care, reduce our dependence on foreign oil, keep our nation safe and make our schools among the world’s best again. For the first time in more than a dozen years, Idaho has sent a bipartisan delegation to Congress and they, too, have pledged to get things done together. So do us.

(Kate) The legislature has a solemn obligation to each Idahoan. We must not sell our future short with ill-advised cuts to critical services. We must trust our people and our communities to make their own decisions. We must believe in the wisdom and ingenuity of Idaho families to not just survive this current crisis, but to walk through the door of opportunity that we’ll hold open – a door to a better future for our children.

IDAHO'S BRIDGE TO THE FUTURE

Jefferson Jewell: Investment in R&D will generate wealth

Jewell is a co-founder of Blackfin Technology

"We need quality infrastructure and we have to invest in education. Those are threshold requirements for the future, not ends unto themselves.

"To remain competitive, Idaho needs to attract and nurture research and development investment. This applies to companies in technology and agriculture and everything in between. Simplot and Micron are perfect examples of how research and development spending can generate tremendous amounts of wealth for Idaho. Remember, research and development investment occurs outside of technology companies.

"I would immediately adopt packages to make Idaho a better place to spend research and development dollars. That includes investing in education and giving incentives for research and development spending.

"Research and development jobs pay very well, so each dollar in state-backed incentives recycles through the economy and returns more than a dollar in additional tax revenue and growth."

Mark Rivers: Nurture new entrepreneurs

Rivers is BoDo commercial district developer and founder of the WaterCooler, a business incubator.

"We've done a great job of solidifying a legacy employer base, promoting our reputation and building a wonderful lifestyle. But we haven't done enough to create the next generation of job growth and new investment and new ideas. ... If our top priority isn't job creation and economic development, our mind is wandering. We're bleeding jobs and not doing enough to advance the upside of new employers."

Rivers' other suggestions for using federal stimulus money in Idaho:

Build incubators to help fast-track our emerging businesses like alternative energy companies.

Create an Idaho innovation fund to provide loans and loan guarantees to qualified early-stage companies.

Develop a science and technology park in Boise to connect and advance more research, commercialization and public-private economic initiatives.

Nancy Napier: Foster creativity in our students

Napier is director of International Business at Boise State and executive director, Centre for Creativity and Innovation

"Education, health care and energy are all critical for Idaho and ones where the stimulus should be able to make an impact within the state, and may help the state make an impact beyond, partly because we already have 'pockets' of innovation and world-class leadership.

"The U.S. is slipping in creativity and innovation on several measures worldwide. Basically, we are doing what we've always done but other countries are getting really systematic about improving their education, research and industries to tap into creativity/innovation. ... We need to get serious about being sure our students, at all levels, understand how to think and be more creative in whatever fields they pursue."

John Freemuth: Put money into research on water, energy

Freemuth is a Boise State public policy and political science professor; fellow of the Andrus Center for Public Policy

"We should look at our competitive advantages. The governor should convene a diverse set of Idahoans from the public, private and nonprofit sectors to come together and try and work this through, quickly. However, we need to be flexible things change quickly and we also need to pay close attention to new ideas, startups and the general notion of investing in 'promising uncertainty.'

"In energy, we can do things, in biofuels for example, with our agricultural and forest resources. We can and should invest in higher education generally, and especially in areas where our three research universities are working together collaboratively. We are too small to compete against each other."

Freemuth's suggestions:

Conduct water research - how to better use it, how to solve the energy/water use relationships, what to do about water and climate change issues.

Ensure rural parts of the state are linked through the latest high-speed Internet and data connections.

Invest in the Center for Advanced Energy Studies, a partnership comprised of Boise State, Idaho State, University of Idaho and Idaho National Laboratory, whose mission is to deliver innovative, cost-effective, credible energy research leading to technology-based economic development.

Peter Crabb: Idaho needs to set its own course

Crabb is a Northwest Nazarene University finance and economics professor

"The mission of President-elect Obama's economic stimulus package does not directly apply to Idaho. Gov. Butch Otter said it well when he stated, 'My goal as your governor is to empower Idaho to be all that America was meant to be, and to empower Idahoans to be the architects of their own destiny.' We need to craft our own plans.

"Participating in this economic stimulus package locks us to the priorities of Washington, D.C., which may or may not be in line with those of Idaho. ...

"Idaho does not need a 'retrofitting for the global economy.' Idaho companies as big as Micron and as small as Dawson Taylor Coffee Roasters have been participating in the global economy for decades.

"Our managers and workers know with whom they compete and will therefore continue to work as hard as ever to meet that competition."

Invest in people, potential.' Nonpoliticians say Idaho needs to think beyond roads and bridges when it comes to the stimulus

Nonpoliticians say Idaho needs to think beyond roads and bridges when it decides how to spend stimulus dollars.

BY CYNTHIA SEWELL - cmsewell@idahostatesman.com

With the possibility of the state receiving millions of dollars in federal stimulus money, some local business leaders and economic experts say Idaho's economic recovery hinges on more than rebuilding roads and bridges.

The future of this Valley and this state lies in nurturing and cultivating two of its most important resources: youth, who will guide the Gem State through the 21st century, and entrepreneurs, who will become the next wave of Simplots, Albertsons and Morrisons.

"We've got to think broader and smarter than just potholes. We need to invest in our people and our potential," BoDo developer and WaterCooler founder Mark Rivers said. "This will come from higher education, new innovation and our robust class of entrepreneurs."

President-elect Barack Obama wants to invest his promised multibillion-dollar stimulus in energy, education, health care and a new infrastructure "that are necessary to keep us strong and competitive in the 21st century" and will "retrofit America for a global economy."

In his State of the State speech Monday, Gov. Butch Otter echoed Rivers' desire to create the next generation of business leaders.

But so far, Idaho has a wish list that is heavy on transportation, light on energy, education and health care - and largely made up of unfunded projects from various state agencies.

Obama has said he wants the cash to jump-start job creation and long-term growth by investing in the science, research and technology that will lead to medical breakthroughs, other discoveries and entire new industries.

So what could Idaho do to best position itself with some of its share of the money?

Rivers suggests using the stimulus money for new research and science facilities at the public universities.

"These are the new technologies and innovations that will drive new companies and an educated workforce," Rivers said.

Boise State University professor Nancy Napier thinks Idaho should make a point of recruiting creative and innovative businesses - like the well-known modern dance troupe Trey McIntyre Company. Idaho is a small enough state that business leaders and researchers and creative artists can all work together - and we should take advantage of that, she said.

And Northwest Nazarene University finance and economics professor Peter Crabb points out that Idaho has had great small and large companies for decades. If the state can devote money to a better business tax climate, he said, the economy will grow itself.

Popkey: Otter's days of wanting to cut programs are gone

- Idaho Statesman

Edition Date: 01/11/09

The moment Gov. Butch Otter spent almost 40 years preparing for has arrived. Ever a critic of a growing government, Otter now has the chance to sharply cut state programs.

On Monday, with revenues in free-fall, he delivers his budget message and State of the State. The most important speech of his life comes after Friday's news that Idaho unemployment jumped almost a full point last month, to 6.6 percent, the highest in more than 20 years.

But Otter and other Republicans - knowing their party has run legislative budget-writing since 1961 - realize there are few easy decisions ahead.

"We run such a tight ship over here that when we do have cuts, they hurt," said GOP Sen. John McGee of Caldwell. "It's going to be painful. And I'll tell you what's different: We don't know where the bottom is."

The Butch Otter who served in the Idaho House in the 1970s and first ran for governor in 1978 would have joyfully taken an ax to state spending. But at 66, after 14 years as lieutenant governor and six years in Congress, he's changed.

Congress taught him complexity and compromise. After calling Social Security a "failure" and urging privatization, he backed away. He cast a critical vote for the huge Medicaid prescription drug benefit.

The crumbling economy gives him a chance to affirm a core value: "Government should be there when nobody else is," but leave the rest to the private sector.

Being governor has shown him that finding that line is vexing. He says he can't get the face of an autistic boy named Spencer out of his mind. Spencer's mother confronted Otter about cutting Spencer's treatment from 30 hours a week to 22. "Nobody ever mentions the Health and Welfare budget that I don't see Spencer's face," Otter said. "Ever."

Yes, Otter worries about struggling business, including farmers. "But they're big guys. They've had to make do with the same tractor for another 10 years, or they've baling-wired something together. You can't bale-wire that kid's head."

Still, raising taxes is off the table, except for his roads initiative. A tax increase would push more struggling families over the edge and prompt more job loss, Otter said. "You create a lot more casualties when you raise taxes to the extent we'd have to to make up the difference."

Look for Otter to suggest eliminating some programs, along with trimming employee hours and other steps to minimize layoffs. Leaders of the big Republican majority want Otter to identify any luxury.

"This economic circumstance, as grim as it is, is a great opportunity to look deep into the bowels of government to say what is necessary and what is nice and make that distinction," said Senate President Pro Tem Bob Geddes of Soda Springs. Otter also uses the "necessary v. nice" phrase.

Geddes, who listened to two days of testimony last week about a sick economy, reflects a widespread view that the worst is yet to come. He doubts rebound projections. "Every one of them predicts we'll see recovery in 2010. What in the hell gives them that idea?" he said. "I've heard no evidence, no data, no real basis other than optimism that will be the case."

Geddes is also skeptical of what he sees as interest groups driving opposition to cuts, including providers of Medicaid services. On Thursday, the first march on the Legislature will be by disabled Idahoans and their families. "It's the providers that are getting these families to write these letters to the Legislature," Geddes said. "I personally take offense to that."

House Majority Leader Mike Moyle has high hopes for Otter budget wizardry. "What I'm telling my members is when the governor brings his budget forward, unless there are major holes in it, let's pass it and go home," Moyle said.

Rep. Janet McGeachin, a member of the budget committee from Idaho Falls, said public schools must be cut, contrary to longtime practice in down times. "They'll howl, but they'll howl if we raise taxes, too."

One lawmaker told me that after he lunched at the state cafeteria last week, he's decided he won't return. He doesn't have the stomach to sit with state workers with the prospect of significant layoffs.

That tension is widely felt. Sen. John Goedde of Coeur d'Alene said lawmakers who see the crisis as an opportunity to cut may learn something.

"It's real easy to take that position until you're talking to an individual citizen that's losing something," Goedde said. "How do you tell a senior citizen who can't take care of her own house and is getting help from Health and Welfare that she should sell her house and move into a nursing home?"

Late Friday afternoon, before heading home to study his speech, Otter reflected on how his perspective has changed since his bludgeon-the-government days of the 1970s.

"They're going to find out it's not easy - for all the years that we sat and wistfully thought, 'Wouldn't it be great to cut this and cut that and stop this from happening and stop that from happening?' Then you start putting faces on it, like Spencer. You start putting faces on it and it does make a difference."

dpopkey@idahostatesman.com 377-6438

General Fund Expenditure Holdbacks — A Twenty-eight Year History

Due to economic factors over the years, it has become necessary from time to time for state agency budgets to be reduced during a fiscal year to bring spending in line with lagging revenue collections. There are two ways authorized by statute to reduce spending when the Legislature is not in session; one is temporary and one is permanent.

Temporary Reduction of Spending Authority:

Idaho Code 67-3512A states in part “…Whenever the governor as chief budget officer of the state may determine that the expenditures authorized by the legislature for the current fiscal year shall exceed anticipated moneys available to meet those expenditures, the governor by executive order may reduce the spending authority on file in the office of the state controller for any department, office or institution of the state…”

Reduction of Legislative Appropriations:

Idaho Code 67-3512 states in part “…Any legislative appropriation made for any department, office or agency may be reduced in amount by the state board of examiners upon investigation and report of the administrator of the division of financial management; provided that before such reduction is ordered the head of such department, office or institution shall be allowed a hearing before said state board of examiners...”

Secretary of State, have the authority to reduce appropriations, in almost all cases over the last thirty years, spending reductions were initiated through executive order early in the fiscal year, allowed to expire with the start of the legislative session, and then were taken up as budget cuts by the Legislature. The Board of Examiners’ authority provides a tool to ensure the state budget can be balanced late in the fiscal year after the Legislature has gone home.

As the following historical summary indicates, the decade of the1980s was the decade of the holdback. State agency budget growth accelerated during the 70s largely due to steep inflationary rates during that time. That house of cards collapsed in 1980 with a deep recession and restructuring of the U.S. economy. Between 1981 and 1986 there were General Fund holdbacks in five of six years.

FY 1981: Initially a 3.0% holdback was ordered by Governor John V. Evans, then increased to 3.85% for all agencies. By June the revenues had improved and the holdback was released for public schools.

FY 1982: The shortfall did not materialize until April, at which time Governor Evans directed General Fund supported state employees to go to a four-day work week for the last seven weeks of the fiscal year to make up $8.0 million.

FY 1983: Governor Evans ordered a 9.0% holdback, followed by an additional 1.5% shortly thereafter, as the national recession hit Idaho hard, creating a $69 million shortfall in a $374 million budget. The Legislature passed bills to reduce agency budgets by 12%, and public schools by 3.6%, but both were vetoed. Eventually a temporary one and one-half cent sales tax increase was passed (from 3 to 4.5 cents) to fund a tax anticipation note designed to cover the shortfall. The sales tax became permanent at 4 cents the following session.

FY 1985: Governor Evans ordered a 3.0% holdback that expired January 31. Appropriations designed to make the holdback permanent were vetoed, and the deficit was covered with a transfer from the Budget Reserve Fund.

FY 1986: Governor Evans ordered a 2.5% holdback that expired on January 31. The Legislature enacted a 4.5% budget reduction over the Governor’s veto, and passed a temporary one cent sales tax increase (from 4 to 5 cents), which later became permanent.

FY 1992: A mid-year shortfall developed that prompted the Legislature to cut agency budgets across the board by 1.1%, and covered public schools with a transfer from the Budget Reserve Fund. Governor Cecil Andrus vetoed the budget cuts (except for the Legislative and Judicial branch reductions), believing revenues would improve. On April 16, however, the Governor ordered a 0.3% holdback on state agencies, and on May 21, after reviewing April revenues, delayed the final $10.9 million public school payment to PERSI into the next fiscal year to cover the shortfall.

FY 1996: In September, Governor Phil Batt ordered a 2.0% holdback on state agencies and public schools that expired on January 31. The Legislature covered the schools portion from the Budget Reserve Fund, and authorized the Governor and Board of Examiners to reduce appropriations, if necessary, in the spring.

FY 1997: Governor Batt ordered a 2.5% spending holdback in September on state agencies and recommended covering the public schools portion of the holdback with the Budget Reserve Fund. The latter transfer turned out to be unnecessary because of slightly improved revenue collections in the spring.

FY 2002: In August, due to declining revenues as a result of high tech industry-driven economic problems, Governor Kempthorne ordered a 2% holdback on state agencies and a 1.5% holdback on public schools. That holdback was increased two months later in the aftermath of 9/11 to a total of 3% on state agencies and 2.5% for public schools, which would save an estimated $54 million. Eventually the Legislature increased the spending cuts to $64 million and authorized the transfer of another $120 million in cash balances from the Millennium Fund, Capitol Endowment Fund and Permanent Building Fund (HB 701).

FY 2003: Governor Kempthorne ordered a 3.5% holdback on all state agencies except for public schools and higher education. He later reduced the holdback for Health and Welfare to 1.9%. The Legislature enacted these holdbacks into budget cuts during the 2003 legislative session, along with transferring the remaining cash reserves to cover a $214 million budget gap. With cash reserves gone and further budget cuts facing vetoes, a two-year temporary sales tax increase of one cent was put into effect beginning in May, capping off the longest legislative session in Idaho history.

FY 2009: In September, Governor Otter ordered a 1% holdback on state agencies and public schools, covering the public schools portion from the Public Education Stabilization Fund. On December 1, Governor Otter increased the holdback to 4% total, with directions to state agencies to hold another 2% in reserve should further cuts be necessary. Again, the public schools portion of the 4% holdback would be covered by the PESF.

Staff Contact: Jeff Youtz

General Fund Revenues Not Meeting Forecast

Falling General Fund revenue collections in November led Governor Otter to order a 3% expansion of his earlier holdback order. Agencies will reduce their spending by $114.3 million in the current fiscal year, for a total reduction of 4%. The Governor also is recommending that $12 million of the $20 million appropriated in fiscal year 2009 for a statewide comprehensive aquifer study and $5.6 million from the Permanent Building Fund be reverted back to the General Fund.

The original holdback order, issued in late September, required state agencies to reduce FY 2009 General Fund expenditures by 1% of ongoing appropriations, or $27 million. The Division of Financial Management revised the General Fund revenue forecast in August down from 1.1% growth to a negative 4.9% compared with FY 2008 actual collections. This meant $107.4 million less was available for fiscal year 2009 and resulted in the 1% holdback announcement. Public schools have been included in both holdback orders, with the expectation that the Public Education Stabilization Fund will make up any reductions from the General Fund.

Tax collections through November are $19.2 million less than expected based on the reduced forecast issued in August. This continued decline led the Governor to issue a second holdback order of 3%, which will result ina total of $131.9 million. The order was issued in response to a rapidly slowing economy and continued weakness in sales tax and withholding collections. Although a new forecast will not be released until January with the Governor’s Executive Budget, it is expected to be significantly less than the $2,766.3 million currently forecast.

Compliance with the Governor’s holdback, mandatory for state agencies in the executive branch, is voluntary for elected state officials and for the Legislative and Judicial branches of government. However, the Legislative and Judicial branches have agreed to comply fully with the Governor’s holdback request.

Staff Contact: Cathy Holland-Smith

Note: see stats on FY 2009 General Fund Revenue Collections To Date HERE (page 2)