Lawmakers set budget revenue targets

Lawmakers set budget revenue targets

by
Idaho Freedom Foundation staff
February 12, 2010
Idaho Freedom Foundation staff
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February 12, 2010

Idaho budget writers have set their revenue targets, which will help determine how much the state can spend during the next 17 months. The Joint Finance-Appropriations Committee (JFAC) chose a $2.28 billion figure for the current budget, and $2.29 billion for the next budget, which starts in July. Those totals were chosen by a panel of lawmakers last month, and are lower than Gov. Butch Otter’s recommendations last month. Otter’s budget chief Wayne Hammon said the governor supports the decision, due to lower tax collection numbers that have come in since Otter released his budget.

“I think realism has taken the course here and that these numbers reflect that,” said Rep. Cliff Bayer, R-Boise, who sits on JFAC and chaired the Economic Outlook and Revenue Assessment Committee (EORAC) that suggested the lower numbers. Bayer and other lawmakers debated whether the revenue targets from lawmakers and the governor were optimistic, pessimistic, or realistic. Bayer said the EORAC’s numbers will lead to a more stable budget. “We feel it’s important to budget cautiously again, in order to get it right in the first place and not issue holdbacks.”

“This committee’s charge is to balance the budget based on our best judgment of where the revenue will be,” said Sen. Dean Cameron, R-Rupert, the co-chair of JFAC. “This committee is not projecting the economy. This committee is only setting a number that we will budget to.”

Republicans approved the revenue projections on a party line vote. Now, lawmakers will need to find an additional $69 million to balance the current budget, which ends June 30 and $59 million in the next fiscal year budget, according to legislative budget staff. GOP lawmakers said those looming reductions are reflective of the sour state economy. “We’re in more trouble today than we were a year ago or two years ago or three years ago,” said Sen. Jeff Siddoway, R-Terreton. “We’re not out of this mess by a long shot and we’ve got to deal with what we’ve got.

Democrats voted for higher projections made by the governor and his chief economist, Mike Ferguson. Sen. Diane Bilyeu, D-Pocatello, said Ferguson’s numbers should be trusted. “His modeling his very accurate,” she said. “It is reasonable and it has optimism. My thinking is that if we go lower than what our economist recommended, then we may be contributing to a downward spiral.”

Republican Rep. George Eskridge of Dover countered that Ferguson’s projections have been higher than actual tax collections for the past two years. “We learned last year that if we had been overly optimistic we would have been in far more trouble than we are already,” he said. “We need to be fiscally responsible. We have people out there that are dependent on us doing the right thing.” He said setting a lower budget will help avoid mid-year reductions to programs including schools and prisons.

Democrats on the panel said the lower budget numbers would lead to further job losses, which could hurt the economy. “We all know what’s needed to move Idaho’s economy ahead: jobs and consumer confidence,” said Rep. Shirley Ringo, D-Moscow. “And our actions here today will set the tone … I believe in Idaho and I believe that we are poised to redeem our economic strength. I believe that by projecting too low, we will impede an economic recovery we are ready to make.” Ringo and Sen. Nicole LeFavour, D-Boise, argued that cutting state spending will hurt private businesses that rely on state services.

Cameron countered that businesses depend more on a steady government, so a lower projection is needed. “They need a stable footing,” he said. “They need to know that we won’t increase their regulatory or tax burden.” He said the revenue projections are based on the revenue numbers lawmakers are getting, not ideological beliefs. “We can politicize this all we want. That’s not going to help us. The reality is how the numbers are tracking.”

Lawmakers will start writing the budget on Feb. 22.  JFAC co-chair Maxine Bell, R-Jerome, said the budget process is on schedule, and that the Legislature could wrap up business in Boise by the end of March.

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