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Otter plans more money for ed, reserves, state workers … and some tax relief in ’13 budget

Otter plans more money for ed, reserves, state workers … and some tax relief in ’13 budget

Dustin Hurst
January 9, 2012
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January 9, 2012

A legislative session without cuts.

It appears that's what lawmakers are facing this legislative session, a change of pace from the prior two.

Gov. Butch Otter's fiscal year 2013 budget contains more money in every area of state government, including education, bonuses for state employees and filling program reserves. Otter has also outlined $45 million in tax relief plus another expansion of the grocery tax credit.

Overall, Otter is projecting $2.7 billion in revenue for 2013, an increase of 5.8 percent from 2012. The governor's office expects fiscal year 2012 to yield $2.55 billion in revenue. If the 2012 revenues hit that target, the state would end up with an overage of about $103 million, which Otter already has plans for in the 2013 budget.

Otter’s budget director, Wayne Hammon, told reporters Monday at a briefing that the spending plan strikes an even note. “Given the resources we have, we struck a balance between saving and spending,” Hammon said.

Education, the largest recipient of cuts in the past two years, will see more direct funds in 2013 if Otter has his way. His budget calls for a $31 million increase in schools funding, though that's about $30 million less than was requested by Superintendent of Public Instruction Tom Luna.  The additional school money will go to fully fund Luna's education reform package, including technology upgrades for classrooms and a teacher merit pay program.

Higher education will also see extra state money. Otter plans $16.9 million more money for universities, an 8.1 percent hike, and $4.3 million more for community colleges, a 19 percent jump. The new money will fund enrollment growth as well as pay for new building operations.

There is also planned tax relief in the governor's budget, though there are no specific details at this point. Hammon said the 2013 spending plan sets aside $45 million for tax reductions, but he noted the governor has no specific requests as to how it happens. Some legislators have discussed lowering the personal or corporate income tax rates, but no formal plans have been offered.

Hammon says the relief is part of Otter's strategy to spur job creation. "It's fuel for our economic engine," Hammon said, referring to a possible tax cut.

In addition to the $45 million, Idahoans will likely see more relief on their grocery purchases. The governor plans to expand the grocery tax refund another $15 million in 2013, bringing the total reduction to $126.2 million.

State reserves, drained during the recent years, will see a total of $60 million more money this year. The state has spent $381 million out of reserve funding through the slumping years. The public schools reserve fund will get $29 million, while the newly-created higher ed reserve fund will see $4.98 million. The general reserve fund will get a $9.45 million payment as required by state code once revenues hit a certain level, but Otter directs $16.52 million more there for a total of $25 million.

State employees could also see more money and benefits if the governor's plan comes to fruition. Otter directs $41 million in bonuses to be paid to all state government workers, including teachers, which will account for $26 million in the total cost. The money, however, is not guaranteed. The state must meet two budget targets - one in June and one next January - for the bonuses to be realized.

If they are implemented, bonuses would mean a 3 percent one-time raise in pay for state workers.

Otter is also planning on covering increased health care costs for state employees and is looking to start a preemptive wellness program aimed at bringing down insurance costs. This area will cost taxpayers $12.5 million in 2013.

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