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‘Hypothetical’ state budget balanced by emptying reserve accounts

‘Hypothetical’ state budget balanced by emptying reserve accounts

by
Idaho Freedom Foundation staff
March 12, 2010
Idaho Freedom Foundation staff
Author Image
March 12, 2010

Idaho budget writers have completed the bulk of their work by balancing state spending and revenues for the next 16 months.  Lawmakers approved transferring $6.2 million from reserve accounts to balance the current budget that ends in June and transferring $79.6 million from reserves to balance the next state budget.

“This is just another key step in balancing our budget,” said Rep. Cliff Bayer, R-Boise.  The transfers approved by the Joint Finance-Appropriations Committee (JFAC) Friday would lead to a balanced budget, based on a hypothetical budget prepared by legislative budget staff.  The transfers come at the end of JFAC’s budget setting process, and would augment the state’s projected $2.28 billion in tax revenue for the current budget and $2.29 billion for the next fiscal year.

The majority of the transfer for the current year comes in a $6 million shift from the Consumer Protection Fund.  That money came from the state’s settlement with the pharmaceutical company Eli Lilly.  For the next fiscal year, $30.1 million would come from the Budget Stabilization Fund and $49.5 from the Economic Recovery Reserve Fund.  Those fund shifts would almost completely empty those accounts.  The two funds would have less than $1 million left by June 2011.

“We took a lot of money out of our savings account and thank goodness that we had them,” said Sen. Dean Mortimer, R-Idaho Falls.  The state’s Public Education Stabilization Fund has $17 million left, but Mortimer and other lawmakers expect that money will be spent during the next year.  “Our savings accounts are pretty much gone.  We have done pretty much everything we can to hold education and other state agencies (whole).”

“We’ll hope the time comes when the revenue streams will fill those savings accounts,” said JFAC co-chair Rep. Maxine Bell, R-Jerome.  By balancing the budget, JFAC has completed almost all of its work.  The budget for the Department of Administration has yet to be set, due to concerns over the Idaho Education Network (IEN).

JFAC co-chair Sen. Dean Cameron, R-Rupert, said lawmakers won’t set the administration department’s budget until at least next Friday.  Part of the wait is to proceed after a preliminary hearing regarding a lawsuit filed by Syringa Networks of an IEN contract.  “The appropriate message was to postpone the whole thing,” Cameron said.  He said putting off the budget won’t add days to the legislative session in Boise.  “It still doesn’t delay us—we can kick that budget out in 24 hours.”  He said he’s expecting the legislative session to end March 26.

Cameron said JFAC will also need to create an “exit strategy” to help deal with additional shortfalls that would unbalance the budget.  Last year, lawmakers gave Gov. Butch Otter $7 million from the Budget Stabilization Fund to deal with some of the shortfall, but there isn’t any money left in that account.  Bell said Republican legislative leaders are considering tapping the Permanent Building Fund for extra funding if tax revenues stay below expectations.

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