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Guest opinion: Governor Otter’s budget gimmicks hurt Idaho

Guest opinion: Governor Otter’s budget gimmicks hurt Idaho

Idaho Freedom Foundation staff
February 24, 2014

By Bob Williams, State Budget Solutions

This is not pretty, but it’s fact - lawmakers in states across the country are using budget gimmicks and relying on accounting tricks to make their budgets appear balanced.

Unfortunately, Idaho is one of those states.

The reliance on said gimmicks is both unfortunate and unnecessary because there is a far better path to accomplish financial stability and effective government.

Governor Butch Otter is offering up lots of new spending in this legislative session, increasing the general fund budget by 3.7 percent. At least, that is how it looks at first glance.

Deeper digging into the budget, however, reveals a series of gimmicks and tricks that make it clear that the 3.7 percent budget increase is a fallacy.

In fact, the governor increases the state budget by $140 million--$36 million more than he has claimed. That amount means that the budget increase outpaces the economic growth of the entire state.

One budget gimmick in play is the fund shift, meaning that money from one state fund moves into another.

Governor Otter uses fund shifts to make an additional $33 million in general fund spending disappear. In short, this is a good way to make the budget look balanced, even if there is more spending than revenue.

The governor is also playing games with the calendar.

His proposal sets aside $18 million that he treated as fund transfers in 2015, not direct general fund spending. Tax dollars should not be part of a shell game played by the state’s leaders.

Additionally, Otter also approaches new Medicaid spending as a reduction in general fund expenses. Instead, he should call a spade a spade and call new Medicaid spending what it is - new spending.

All these gimmicks may make things appear rosy now, but they only darken the clouds of the fiscal crisis that looms on the horizon. We have all heard of the term ‘kicking the can down the road,’ that is exactly what budget gimmicks like this do.

Exacerbating this problem is Idaho’s reliance on federal funding. According to State Budget Solutions, Idaho took in $2.48 billion in revenue directly from the federal government in 2012. That is 34.9 percent of all general revenue for the state. That is a dangerous reliance on a federal government that we know is dysfunctional and perennially broke.

Idaho needs to refocus the way it does budgeting. The state budget must be more about effective governance and less about trying to hit a magical “balanced budget” number, while throwing out basic accounting principles to get there.

After all, budget gimmicks are not needed if the budget is responsible in the first place.

Citizens should demand that the budget be created with basic accounting principles, not smoke and mirrors. They contribute large sums to the state. In return, they deserve both a transparent government that doesn’t try to hide where the spending is and leadership that spends those tax dollars effectively and efficiently.

It is time to stop playing games with the state budget and start thinking about responsible, sustainable budgeting.

Bob Williams is the President of State Budget Solutions, a non-partisan organization dedicated to fiscal responsibility and pension reform. Williams is a former Washington state legislator and gubernatorial candidate.

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