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S1428 - Fund Transfers, FY22 and FY23

S1428 - Fund Transfers, FY22 and FY23

by
Fred Birnbaum
March 23, 2022
Fred Birnbaum
Author Image
March 23, 2022

The Idaho Spending Index examines appropriation bills on several fronts to add important context to lawmakers’ discussions as they are considered on the floor of the House and Senate. Among the issues we look at in drawing a conclusion about a budget:

Does the agency requesting these funds serve a proper role of government? Has wasteful or duplicative spending been identified within the agency, and if so, has that spending been eliminated or corrected? Does the budget examine existing spending to look for opportunities to contain spending, e.g., through a base reduction? If there is a maintenance budget, is that maintenance budget appropriate? Are the line items appropriate in type and size, and are they absolutely necessary for serving the public? Does the budget contemplate the addition of new employees or programs? Does the appropriation increase dependency on the federal government?

Our analysis is intended to provide lawmakers and their constituents with a frame of reference for conservative budgeting, by summarizing whether appropriation measures contain items that are sincerely objectionable or sincerely supportable.

Bill Description: Relates to year-end appropriations and transfers for FY22 and FY23.

Rating: -1

Analysis:

One reason more money isn’t available for tax relief is that so much is being transferred into various stabilization funds. The primary reason given by lawmakers is that the bond rating agencies push for having a high percentage of General Funds available for support from budget stabilization funds. The target given is 18 to 23% of General Fund spending  supported by stabilization fund balances.

Unfortunately, the transfers in this bill are clearly excessive for two specific funds. 

There are two transfers to the Public Education Stabilization Fund (PESF) totaling $121 million, bringing the projected total at the end of FY23 to $201.6 million. In FY21 and FY22, these funds have been used to backfill excess spending in public education. The original K-12 budgets were topped off with $48 million from PESF.

Additionally, there is a $120 million transfer to the Budget Stabilization Fund. If all of these transfers occur, the projected FY23 ending balance will be $1.197 billion, or 21.9% of General Funds. An 18% balance would be more reasonable and would free up $213 million for other uses like tax relief. 

Separately, there is a line item  for $50,000,000 from the ARPA State Fiscal Recovery Fund to the Idaho Workforce Housing Fund, created by House Bill 701.

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