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Lake’s bill would sweep extra state year-end money into reserves

Lake’s bill would sweep extra state year-end money into reserves

Dustin Hurst
March 2, 2012
Dustin Hurst
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March 2, 2012

When budget writers come to Boise every January, Rep. Dennis Lake, R-Blackfoot, wants them to focus solely on making each year’s expenses and revenue match.

A bill Lake believes will do that was approved Friday by the House Revenue and Taxation Committee, though it does need some language amendments.

The legislation would mandate all state year-end surplus money to be swept into reserve accounts instead of carrying over into the next fiscal year. Lake said his legislation would “get us to start looking at revenues this year and expenditures this year and making them line up.”

The bill could have a huge impact on how the state handles its fiscal affairs. The legislation wouldn’t affect the 2012 or 2013 budgets, but would change the spending process starting in fiscal year 2014.

Both the 2012 and 2013 budgets illustrate the practice Lake is attempting to curtail. At the end of fiscal year 2012, Idaho is expected to have a surplus exceeding $100 million. That money will likely be used in 2013 to patch funding gaps in state agencies, provide some sort of tax relief, prevent teacher pay cuts and provide raises to state workers.

Lake’s measure wouldn’t permanently disqualify the surplus money from being used in the annual spending plan, but would make it slightly harder for budget writers to get at the cash. Instead of having the funds at their fingertips, members of the budget committee would have to vote to draw down reserves to access the funds, a move Lake says will bring additional scrutiny to the process.

There was some skepticism over the plan, however. Rep. John Rusche, D-Lewiston, suggested not having the extra funding immediately available might hurt critical government services. “I can see the wisdom, but I can also see the degrading of public structures,” Rusche warned.

But Lake defended his plan, saying the money is still available through a vote of the budget committee. “You’ve got to take positive action to go get the money instead of just having it there,” Lake said. “This is just an eliminator of that surplus that we did not plan on.”

The legislation is part of Lake’s focus on filling reserves, which he says kept the state whole through the last few years of slumping revenue. On the House floor Thursday, Lake opposed a $35 million tax cut because he believes it’d be more prudent to fill reserves before reducing taxes.

The bill now heads the House amending order. The proposed changes are minor and include clarification as to how the state handles its year-end accounting.

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