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Otter's budget chief goes into details with lawmakers

Otter's budget chief goes into details with lawmakers

Idaho Freedom Foundation staff
January 12, 2010
Idaho Freedom Foundation staff
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January 12, 2010

Gov. Butch Otter’s budget chief Wayne Hammon offered some follow-up explanations on the state budget to a panel of lawmakers less than a day after the spending plan was released. Lawmakers asked Hammon several questions about cuts to public education and merging the Department of Parks and Recreation into other agencies.
Hammon said the governor’s plan to reducing spending for public schools by $27 million during the next six months is necessary. “We’re at a point where there’s just no other option,” Hammon said.
“We seem to be looking at a severe hole for revenue,” Sen. Nicole LeFavour, D-Boise, said. She said many people in Idaho would like to consider finding new revenue, including raising taxes, to preserve education spending.
““Given the current state of the economy, people are not looking for more taxes,” Hammon responded to LeFavour. “They’re not looking to give the government more money when their family needs it now.”
Otter’s plan to balance the current budget, which ends in June, combines $40 million in cuts, including to public education, with close to $30 million in additional spending from rainy day funds and one-time sources including a $7 million settlement with drugmaker Eli Lilly in October. That settlement was over deceptive marketing of the anti-psychotic drug Zyprexa.
The gap in the current budget that those cuts and fund transfers try to close may well grow before lawmakers decide to go along with the Governor’s plan, according to Hammon. Hammon told lawmakers that preliminary tax revenue numbers for December show an additional $13 million shortfall. That deficit isn’t accounted for in Otter’s budget. It could disappear or it could force lawmakers to find money or cuts somewhere else in the budget.
Hammon also clarified specific policies in Otter’s $2.45 billion budget for the next fiscal year, which begins in July. He made his comments during a presentation to the Joint Finance-Appropriation Committee (JFAC) Tuesday.
Among his points:
-Several of Otter’s planned efficiencies will impact state workers. About 430 jobs will be trimmed from the state payroll, though most of those are vacancies that won’t be filled. Employees at state agencies won’t receive raises suggested by a state report last month. During the next 18 months, agencies will get budget cuts that could be covered by giving all workers an additional furlough day per month. Agency heads would have flexibility to impose those cuts elsewhere to avoid forcing workers to take an unpaid day off work.
-The state will also draw down a reserve fund for state employee health care premiums that will save the state general fund more than $16 million.
-Hammon said Otter’s plan to combine the parks department with other agencies calls for it to merge with the Department of Lands, though park registration services would join the Department of Fish and Game. Hammon said the parks split makes sense because fish and game already runs registration and licensing programs that people can access in supermarkets and other stores.

JFAC co-chairman Sen. Dean Cameron, R-Rupert, said the panel won’t start voting on the cuts to the current budget, including education, for a few weeks. The final budget likely won’t go to the floor of the House and Senate until at least March. Before then, JFAC will hear testimony from the heads of all state agencies.

Hammon's remarks are based on a short slide presentation available at the Department of Financial Management website (pdf).

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