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State government is growing faster in Idaho than in other states

State government is growing faster in Idaho than in other states

Fred Birnbaum
July 5, 2016
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July 5, 2016

The refrain often repeated by the media is: Idaho is tight-fisted with the public purse. More specifically, the media likes to run stories about what the Legislature didn’t approve or didn’t appropriate money for. If we accept the premise that every need must be met by government, spending will always seem inadequate.

One comparison we don’t hear: How does Idaho’s spending growth match up to other states? To do so accurately, we need to compare apples-to-apples.

To start, the total spending pie for fiscal year 2017 is $7.6 billion. When most news stories describe state spending, they usually refer to the general fund, for which $3.3 billion was appropriated for FY 2017. The general fund includes K-12 education, colleges and universities, health and welfare, public safety, and other state agencies.

Most agencies receive the bulk of their appropriations through the general fund. The biggest exception is Medicaid (administered by Health and Welfare), the majority of which is federally funded.

Finally, the balance of the appropriations are dedicated funds of $1.7 billion, which come from, for example, gas taxes, registration fees, and hunting and fishing licenses. The single biggest dedicated funds expenditure is the transportation department, at $354 million — the majority for highway operations and construction.

To get a clean comparison with other states we will look at general-fund budget numbers. The reason: Federal aid is formulaic, and disproportionately (65 percent) goes to the Department of Health and Human Services, which will skew state-to-state comparisons.

Using general-fund budget figures we see, from FYs 2011 to 2016 Idaho general fund spending increased 28.9 percent. This significant increase happened while coming out of the recession. In contrast, the other 49 states, on average, increased their general fund spending only 22.5 percent during that period. “Conservative” Idaho is growing spending faster than the average state.

That difference matters.

Had Idaho held its overall spending increase to the 49 state average, the 2015 gas tax and registration fee increase could have been avoided. How? Well, cumulative general fund expenditures would have been over $150 million lower. Those funds could have been shifted to roads and bridges.

Part of the high-spending problem is the political process.

State agencies can bend the ear of the 20 legislators who make up the Joint Finance Appropriations Committee and put together presentations justifying their spending increase requests. Idaho residents are at a disadvantage: Public testimony is taken on just one day by the Committee.

Importantly, it must be noted, the current fiscal-year spending “base” is typically the starting point for each agency. With few exceptions, zero-based budgeting is not used. Thus there’s little debate as to whether a given program or project should be reduced or even terminated. Debate is simply about what size an agency’s increase will be.

The bottom line: We have allowed state government to swallow and spend every dollar that has come its way since the recession bottomed out. Some control on spending is in order.

Idaho taxpayers deserve to retain more of their hard earned money. State spending control is necessary or more and more of our incomes will be consumed by the state.

Fred Birnbaum is vice president of the Idaho Freedom Foundation.

Idaho Freedom Foundation
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