[Vision2020] Idaho Panel Predicts Budget Shortfall

[Tom Hansen]

"Today, the joint committee will hear presentations on likely shortfalls
in funding for Medicaid, state prisons, colleges and universities."

Courtesy of today's (November 16, 2010) Spokesman-Review.

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Idaho panel predicts shortfall as budget lacks stimulus, reserves
Betsy Z. Russell

BOISE – State lawmakers got a grim glimpse of the decision-making that
awaits them when they convene in January, as the Idaho Legislature’s joint
budget committee gathered Monday to go over figures suggesting it could
face a shortfall in the hundreds of millions.

It’s not that state tax revenues are falling farther behind – in fact,
they’re running ahead of projections. The Joint Finance-Appropriations
Committee learned Monday that October’s state tax revenues came in $8.8
million ahead of projections, for a year-to-date surplus of $22.8 million.

But this year’s state budget was propped up with $340.2 million in federal
economic stimulus money, one-time shifts and state reserve funds, all of
which will be gone when lawmakers set the budget for next year, which is
fiscal year 2012.

State tax revenues are projected to grow 4.7 percent this year, but some
lawmakers think it’ll be less. And even if the forecast is correct, the
lack of reserves and stimulus funds plus millions in urgent new funding
needs point to a big likely shortfall, unless the economy starts to boom
or Idaho makes some changes – either sharply slashing state services
again, or raising taxes.

“We can’t spend money we don’t have,” said Sen. Joyce Broadsword, R-Sagle,
who said the state may have to eliminate some programs that are “not as
effective as others.”

“We have to see where we may be able to do less,” said Sen. Shawn Keough,
R-Sandpoint, co-chairwoman of the Joint Finance-Appropriations Committee.

Rep. Shirley Ringo, D-Moscow, disagreed. “We’re in a culture of timidity
with respect to taking the responsibility to match revenue to meet our
needs,” she said. “I think in part the role of this committee should be to
identify those things that we think we responsibly have to provide” and
find a way to do it.

All three serve on the committee, which reviewed a proposed spending plan
Monday for the single largest slice of the state budget – public schools –
that called for making permanent the $128 million in historic budget cuts
schools saw this year.

State Superintendent of Schools Tom Luna said he hopes the economy will
improve and some of those cuts can be restored, but he said the plan
showed lawmakers that even if per-pupil spending is kept where it is this
year, they’ll still have to spend tens of millions more just to stay even
next year. That’s because Idaho expects to have to pay for 5,000 more
students next year, and also has to plug holes in the school budget that
this year were filled by federal stimulus money and other one-time funding
sources.

Wayne Hammon, Gov. Butch Otter’s budget chief, said that budget outline
was “realistic,” and called an idea by Luna to replace all one-time funds
in this year’s school budget with state general funds next year “a very
ambitious goal” in light of the overall budget outlook.

Sen. Jim Hammond, R-Post Falls, a former school principal who also serves
on the committee, noted that the state constitution requires the
Legislature to fund education. “I guess I’m still hoping that we’ll find
something out there that’ll help us avoid cutting deeper,” he said.

Today, the joint committee will hear presentations on likely shortfalls in
funding for Medicaid, state prisons, colleges and universities.

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Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho

"The Pessimist complains about the wind, the Optimist expects it to change
and the Realist adjusts his sails."

- Unknown