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House Bill 742 – Division of Financial Management, FY23 appropriation

House Bill 742 – Division of Financial Management, FY23 appropriation

by
Niklas Kleinworth
March 8, 2022
Niklas Kleinworth
Author Image
March 8, 2022

The Idaho Spending Index examines appropriation bills on several fronts to add important context to lawmakers’ discussions as they are considered on the floor of the House and Senate. Among the issues we look at in drawing a conclusion about a budget:

Does the agency requesting these funds serve a proper role of government? Has wasteful or duplicative spending been identified within the agency, and if so, has that spending been eliminated or corrected? Does the budget examine existing spending to look for opportunities to contain spending, e.g., through a base reduction? If there is a maintenance budget, is that maintenance budget appropriate? Are the line items appropriate in type and size, and are they absolutely necessary for serving the public? Does the budget contemplate the addition of new employees or programs? Does the appropriation increase dependency on the federal government?

Our analysis is intended to provide lawmakers and their constituents with a frame of reference for conservative budgeting, by summarizing whether appropriation measures contain items that are sincerely objectionable or sincerely supportable.

Rating: -1

Bill Description: House Bill 742 adds one full-time position and appropriates $69,355,500 to the Division of Financial Management for fiscal year 2023.

Analysis:

The mission of the Division of Financial Management (DFM) is to oversee and regulate the allocation of state funding and resources. HB 742 grows the division’s budget by nearly 32%, with $16.7 million in more federal funding than in fiscal year 2022.

The most egregious components of this budget feature the liberal use of ARPA funding to support DFM. Notably, 96% ($67 million) of the division’s budget would come from ARPA dollars. Most of this one-time funding would be dedicated to the Homeowners Assistance Fund, the Small Business Credit Initiative, and an emergency rental assistance program. The Homeowners Assistance Fund and the Small Business Credit Initiative have a combined cost of $137 million over the next five years.

Ironically, DFM plans to spend just over $1 million per year to oversee ARPA spending through auditing, reporting, and compliance requirements. Additionally, the reporting and compliance program requires one additional full-time position to manage the workload. These expenses represent just a portion of the cost of spending vast amounts of ARPA dollars throughout the state.

When the Legislature decided to accept ARPA funding in 2021, it asserted in Section 67-3533 of Idaho Code that these funds “are borrowed from our grandchildren” and should be spent on projects that directly benefit them. Knowing this, it is difficult for DFM to justify how spending ARPA dollars on large, “temporary,” and costly government projects will benefit our grandchildren. Rather, these initiatives only grow the debt they will have to pay and the hardship they must endure to do so.

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