Gov. C.L. Butch Otter on Monday asked lawmakers to approve a $7.2 billion spending plan, and encouraged them to implement one key component of Obamacare law while rejecting another.

Otter’s proposals expand the state budget by 3.1 percent, a rate of increase that is less than the anticipated 5.3 percent increase in state tax revenues. “I hope you share my commitment to ensuring that our state government never grows as fast as our economy and the people’s ability to pay for it,” he told legislators.

In delivering his annual State of the State address, the governor proposed a spending package that includes significant increases in spending for K-12 education and for the Idaho Department of Health and Welfare. “I’ve done as promised and brought you a general fund budget recommendation that is structurally sound,” he remarked, also feeling that the Idaho economy is recovering from the “Great Recession,” and the loss of more than 50,000 jobs.

While not specifically noting it in his address, the governor’s proposed budget for fiscal year 2014 calls for spending an additional $170 million on the Department of Health and Welfare (an expansion of 6.9 percent from the previous year), and a budget of $7.7 million (an expansion of 200 percent) on Idaho Public Television.

In confronting Idaho’s controversial personal property tax, which he characterized as an “unfair drag on our economy,” Otter called for its elimination, while noting that there needs to be “an exit strategy that considers our counties’ financial stability” because county government agencies are heavily reliant on the tax.

To replace the personal property tax, Otter proposed that counties be given “local option taxing authority,” so local residents can choose more directly how to fund county services. When asked at a press conference following his speech what kind of tax he believes counties should pursue, he declined to offer specifics.

Otter reiterated in his speech that he supports the creation of a state-based health insurance exchange as a means of complying with the federal Obamacare mandates, a position that he officially announced last month. Despite the claims of his critics in Idaho and the governors of 19 other states, who insist that complying with the federal insurance exchange mandate allows too much federal control over the states, Otter says that his philosophical belief in “states’ rights” is at the core of his decision, and reiterated after his speech that “to simply walk away from the federal mandate would not be an exertion of states’ rights at all.”

When asked about another concern among his critics, that to comply with the state insurance exchange mandate would make the state susceptible to federal insurance mandates that Idahoans might find objectionable, the governor was dismissive. “I am one of few Republican governors who is agreeing to comply with the insurance mandate in the first place,” he replied. “I don’t think the administration would do that to us.”

With respect to the expansion of Medicaid eligibility, a mandate in the Obamacare law that was overturned by the Supreme Court, but a policy idea that is nonetheless being recommended by Washington, Otter announced his opposition. “There is broad agreement that the existing Medicaid program is broken,” he stated, and called for reforms that would enable the program to operate more efficiently and serve the interests of patients more effectively.

Otter noted in his address that he is not pursuing broad education reforms in the current legislative session, although he also stated that the rejection of the Students Come First laws in the November general election did not represent a vote in favor of the “the status quo.”

After his State of the State address, the governor stated his belief that the open negotiation of teacher contracts and the enhancement of classroom technology were both popular components of the Students Come First laws, but reiterated that he does not wish to move quickly on new education reform legislation. “We need to wait and hear from the stakeholders first, and then move forward on reforms for which there is broad approval,” he said.