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Otter's budget grows state spending about 9 percent

Otter's budget grows state spending about 9 percent

Idaho Freedom Foundation staff
January 11, 2017

Since the economic recovery began in earnest five years ago there are at least three things the taxpayers of Idaho can count on at budget time from Gov. Butch Otter.

First, Otter will ignore a pledge he once made to keep the cost of government from growing faster than the state economy. Second, education spending will largely be the reason he no longer keeps that old fiscal promise. Finally, the governor will continue to fib a little about how fast he’s growing the Idaho budget.

On Monday, Otter asked the Legislature to approve a budget of nearly $3.52 billion for fiscal year 2018. The governor and the Legislative Services Office is calling it a roughly six percent increase in government spending over fiscal year 2017.

Before diving headlong into the big numbers, let’s review that supposed six percent increase. The Idaho Freedom Foundation calculates spending would actually go up by nine percent. But how can that be?

For the past three legislative sessions the Foundation has pointed out, the governor prefers to calculate starting with a higher budget base. His budgets don’t count transfers, like $45 million from the permanent building fund, of which as much as $24 million is expected to be spent in fiscal year 2018.

The proposed budget also does not reflect the roughly $40 million the state will have to pay out in salary and benefits to public employees because of an extra pay period in fiscal 2018..

Otter has chosen not to adopt the accounting methods suggested by the taxpayer advocating Freedom Foundation.

“He’s growing spending twice as fast as the economy is growing,” Fred Birnbaum, vice president of the Freedom Foundation said of this proposed budget. “It has been an ongoing problem.”

In every fiscal year since 2013 the percentage increase in state expenditures has grown faster than the amount collected by the government. The exception was 2015, when corporate income tax collections spiked by $27.1 million, or 14.4 percent more than the previous year.

According to the Legislative Budget Book, in fiscal 2016 revenue collections grew by 4.2 percent while expenditures grew by 5.8 percent. During this current fiscal year, collections increased 5.4 percent while expenditures spiked by 7.4 percent.

Otter’s focus on education accounts for the soaring expenditures. Legislators committed almost $2.1 billion to all forms of education in this current fiscal year, compared to $677.1 million for its health and welfare programs, according to state figures.

Total education spending has increased by 24.7 percent since 2013. Public school spending, now at $1.6 billion is up by 23.8 percent during that same period. College and university spending, now at $279.5 million, is up by 22.8 percent. All other education spending is up a whopping 36.2 percent to $187.5 million.

Comparatively, during that same period, health and welfare spending increased by 11 percent.

For fiscal 2018, Otter seeks another $104 million for public schools. He wants $35 million for new buildings at Boise State University, the University of Idaho and Lewis-Clark State College.

When asked on Monday by Idaho Reporter about his old fiscal pledge, Otter conceded all the proposed new education spending made it tough to keep his promise.

“We’re still backfilling,” Otter said, “especially with the universities. They were more drastically cut than anybody else. Is real government growing faster than the economy? If you count the backfilling, you’re probably right. But we had some catching up to do.”

Note: The Idaho Freedom Foundation publishes IdahoReporter.com.

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