Idaho Legislature: JFAC Faces Budget Challenge

by Judy Ferro

As the legislature completes its eighth week, most committees are barred from considering new bills, and the spotlight turns to the Joint Finance-Appropriations Committee (JFAC) whose members must put together a balanced budget.

It’s no small task, especially since, according to the non-profit Idaho Center for Fiscal Policy, the executive budget presented by Gov. Otter has a deficit of $24.7 million.

Reportedly, the Governor’s budget didn’t include payment for $27.7 million for fire fighting on Idaho state lands in FY2014.  (That amount is 2 ½ times normal and seems to have put a damper on seeking control of Idaho’s Federal lands.)

And there is the small matter of a possible lawsuit by Syringa, the company written out of the broadband contract.  It is claiming that change, now declared illegal, resulted in $22 million in lost income.

So much for Siddoway’s call for using the $18 million budgeted for tax cuts to increase teacher salaries.

But there’s more.  According to Betsy Russell of the Spokesman-Review, Idaho has about 50 more classrooms of kids than were budgeted for this year.  The Governor probably recognized this in estimating that FY2016 support should be up by 87 classrooms.  The latest projections, however, suggest Idaho schools will grow by about 167 classrooms.  Add another $7 million to the budget. (It would be more if Idaho’s basic support weren’t so low.)

Add to that a high number of high school juniors and seniors applying for stipends to pay for on-line classes granting college credit.

If Senator Jim Rice’s bill to end the sales tax on road-building materials passes, it will mean another $15-$20 million cut in general funds.

The legislature also hopes to appropriate more funds to keep wages for state workers from falling more than 20% below the market rate.  Last year the legislature passed a 1% increase for one year only.  That means this year’s proposed 3% increase is really only 2%–and wages in the private sector are expected to increase by 3.7% this year.

And a quirk of the calendar means FY16 will have 27 paydays for state workers rather than the usual 26.

Now the Idaho Center for Fiscal Policy has suggested one way to balance this year’s budget without a tax increase: extend Medicaid to those who make up to 139% of the poverty level.

The Center estimates it will save the state nearly $34 million to make the Federal program pay for the insurance for our working poor.  Many worry about any move that increases the national deficit; still, we’re taxing ourselves considerably while other states are getting the advantages of this program.

Another budget-cutting move receiving attention would be to increase the number of lawyers in the Attorney General’s office.  The state government has been spending about $10 million a year hiring outside legal council at a rate two-to-five times as much as staff lawyers.

It will take more that JFAC’s magic, however, to find the money needed for roads and bridges.  That’s why the House Transportation Committee approved a bill last week that would increase the gas tax by 8 cents a gallon, the diesel tax by 12 cents, registration fees for cars by 50%, and those for trucks by 25%.

That would hit the middle class, but not as hard as the plan to increase the sales tax to 7% AND increase the income tax rate for everyone making less than $89,000 a year.   (Rates for the very poor would go up 400%).

It’s no wonder JFAC members are esteemed; balancing each year’s budget takes a special kind of magic.