The Senate adjourned sine die after 8 p.m. this date. Minority leader Kate Kelly of Boise is retiring from the Senate. The House was still considering bills as we left. It was the 78th day of the session.
The day was spent wrapping up the final appropriation bills and a few other bills that were still floating around. As usual, some folks waited until the last minute to move their bills when public scrutiny would not be as great.
Since the passage of the national health insurance act, consumer spending has dropped markedly. This usually happens during times of economic uncertainty. I suspect that any sustained drop in consumer confidence will lead to widespread lay-offs shortly. The bottom line is that the economy is teetering on the brink of another serious downturn as a result of the national legislation. All previous forecasts for economic recovery are now off the table. The reason I am telling you this is because, on the State level, we may be faced with additional revenue shortfalls in FY 2010 and into FY 2011.
To provide for shortages in FY 2010 we have transferred the following to the General Fund: $20 million from the Economic Recovery Reserve Fund; $33.505 million from the Budget Stabilization Fund, $6.085 million from the Consumer Protection Fund, $105,000 from the Cleanwater Revolving (SCC) Fund, and $100,000 from the Resource Conservation and Rangeland Development Fund.
To balance the FY2011 budget, we have transferred $30.134 million from the Budget Stabilization Fund to the General Fund, and $49,500,000 from the Economic Recovery Reserve Fund. If FY10 revenue forecasts continue to fall short of expectations, both of the above accounts can be used to balance the FY2010 budgets and there will be $79+ million hole in FY11 budgets. In addition, up to $27.944 million of the Permanent Building Fund can be used to balance the FY 2010 budget if need be. This money is used to build and maintain public buildings around the state, including those on the University campuses.
We have only two additional substantive funds. One is the Millennium Fund, the tobacco lawsuit fund, that has ~$70 million, set aside to match federal Medicaid dollars. The other is the Public School Emergency Fund, with $17.9 million (PSEF).
If the economy continues to deteriorate further, and it just might, the legislature may have to have a special session after the start of the next fiscal year, July 1, 2010. Then it will either have to reduce FY 11 budgets or enhance revenues (the euphemism for taxes). I would respectfully suggest that with unemployment as high as 25% in some counties and faced with a deteriorating economy, it would be very difficult to get any kind of revenue enhancements out of the House Revenue and Taxation Committee, where those bills must start as per the Idaho Constitution. The result would be a further reduction in budgets.
Some noteworthy things happened at the end of the session. The radical right passed a bill to provide that all school districts must post every expense, including every check, candy bar, etc. on their web site. Transparency is a good thing, but it should be applied equally to all agencies of government, not just the public schools. This was perceived as continued harassment of the public schools. The sponsors were unsure of the effect it would have on the school districts, either financially or logistically, and as a result delayed implemention until December 2011. This was a political bill and I suspect that legislation will be introduced next session to modify or delete in from statute when the school districts have had an opportunity to weight in. An earlier verision of the bill, HB 650 died and the schools thought it was dead. Then, at the last minute, HB 699 was sent directly from printing to the floor without a hearing. This by the House Education Committee that criticized JFAC for not having hearings on intent language!!
The session also witnessed an assault on employee rights. All public schools were declared to be in an emergency status and teacher contracts could be opened and lowered as a result. University Presidents were given the authority to change annual contracts as well. I voted against both measures.
Noteworthy, also, is that we continue to manage via percentage holdbacks, leaving vacancies unfilled, and other accounting maneuvering. We need to identify the core mission of each agency and then restructure the agencies to fulfill those services with maximum efficiency.
Finally, the session was different than any of my previous 17 sessions. While we were in a new building, the dominant issue was that budgets needed to be cut. For the first time in the history of the state, public school budgets were cut (I voted against the bills that cut education). Health and Welfare budgets were cut less, but every dollar cut affected Idaho citizens. All agencies experienced cuts. There were some bright spots as well. Idaho Public TV and the Department of Parks and Recreation, both on the chopping block, were saved. IPTV got their cut like everyone else, but there was no attempt to cut them off from general fund dollars in the future. The Department of Parks and Recreation was reorganized under Director Nancy Merrill and with a smaller budget. And Dworshak Park will be kept open, at least during the periods of peak use.
Call me if you need to: 208-882-0601. gary@hideandfur.com
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