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Legislative Newsletter II—January 17-22, 2010
Constituents:
There were a number of major events that occurred in the Idaho legislature this week.
1. Department of Parks and Recreation saved from the axe --
the story behind the story as Paul Harvey would say. Governor otter proposed to eliminate this agency to save money on the budget; however, he didn't carefully investigate the history in the creation of the Department. In the late 1950's governor Smylie tried to create a Department of Parks and Recreation staffed by professionals to manage Idaho state parks. However, the Legislature refused to support his initiative. In 1964 the Harriman family from New York proposed to give the state 11,000 acres of prime recreational land located near Henry's lake in eastern Idaho. Governor Smylie saw this as a chance to establish the Department of Parks and Recreation. The agreement signed by the state of Idaho and the Harriman family called for the establishment of the Department as one of the key items in the agreement. Governor Smylie was also concerned that at some point in the future that a governor would propose eliminating the Department in lean budget times and that the Harriman agreement would prevent that move. Apparently, in reviewing the agreement, the Idaho Attorney General agreed.
It is reassuring that some of our past political leaders had long range foresight. My source for this story is Steve Smylie, the son of Governor Smylie.
Locally
there is much concern regarding the Dvorshak dam in our area. There appears to be some progress with Parks and Recreation to work with local authorities to resolve the situation. There is a rumor that management
of the park may be put out for contract with the private sector.
2. Human rights commissions salvaged -- the Governor proposed to eliminate the Human Rights Commission; however, Director Rodger
Madsen, Director of the Department of Labor, said that he could accommodate the commission in his agency and to provide the necessary financing as well--the source coming from interest earned from federal funds in a reserve
held by the Department.
Director Madsen's father was formerly the Dean of the College of Agriculture at WSU, and I worked under his supervision for several years while on the staff at WSU. Plans to salvage other commissions slated for the axe are still under consideration.
3. State board of education proposes to change Idaho ethic laws --
the SBOE aims to undo a law forbidding Idaho University presidents' spouses from being fired at the schools. The board feels that changing the law would assist in attracting top candidates for Presidential positions and would assist the spouse of the current ISU President in getting a job. Rep. Bob Nonini, House Education Chair, said it would put Idaho schools at risk for nepotism charges. Idaho presidents took jobs with annual salaries of more than $300,000 knowing that their spouses couldn't go to work on the university payroll. Nonini said, "Now they want their wives going to work pulling down 70, 80, 90, 100 thousand dollars? That bothers me."
One constituent wrote..."I can faintly hear a university president say to a department director: I am sorry to inform you, Mr. Jones, that as a result of budget and fiscal restraints, we are forced to let you go. On the bright side, my wife will be by your office today to introduce herself to her new staff and color coordinate the furniture. "I've heard mixed reaction to the proposal.
4. The economy --
Mike Ferguson, Governor Otter's economist, predicts that we may not return to the state revenue level of 2007 until 2015. Other economists, even the most optimistic, report we may not reach the 2007 level of funding until 2013. Some economists say we may be in a double dip recession similar to the one in 70-71 (remember the saying--the last one to leave Seattle turn off the lights?). Other economists estimate we may be at the low point in the recession and that it will take 2-3 years of gradual improvement to make significant strides forward. Some even predict that we may be headed to the first step in a depression. In any event, Idaho will be facing some significant financial challenges in these coming years. The only three states with no significant economic problems are North Dakota, Montana, and Wyoming--all with coal and gas royalties. There are 8,000 jobs going begging in North Dakota.
Estimates are that Idaho may be facing another $100,000,000 shortfall before the end of the fiscal year. Everyone is waiting to see what January tax revenues are. The worst news is that fiscal years 2011 and 2012 may be even worse, and that there is a potential 10 percent cut in the 2011 fiscal year if revenues do not improve. This would have a devastating impact on programs and services.
Unemployment continues to lurk around the 9.0 percent level, but many citizens have exhausted their benefits and do not show up in the total unemployment figures. Our true unemployment may be in the 11-12 percent range. About the only good news is that the state endowment funds did very well this past year realizing a gain of about $300,000,000. The PERSI (state retirement) fund gained 15 percent and retirees will receive a one percent COLA in March.
5. Education --
is public education and higher education in Idaho headed toward 3rd world status? This is a question posed by a constituent. Public education continues to get hit with holdbacks and the promise of further budget cuts. The reserves of many school districts are almost depleted. Some districts have gone to a four day school week. In Idaho we require students to attend 180 days of school per annum. Many European and Asian developed countries require students to attend from 220-240 days per annum. If our aim is to prepare students to be competitive in a global economy then it appears that we have a long way to go.
Our institutions of higher learning were esteemed throughout the world as outstanding universities and colleges for teaching and research. Student from around the world flocked particularly to programs of graduate education. However, the level in Idaho of state funding for higher education has fallen from about 18 percent twenty years ago to barely 9 percent today. In just this last fiscal year the University of Idaho was cut back by $22 million in state funding. A highly placed University of Idaho official said that if higher education suffers another 10 percent cut, it would be a disaster. Quality programs will be cut and already many have been eliminated. Many outstanding faculty have taken positions at other institutions and many of these researchers take grant money with them.
The University of Idaho has a tremendous economic impact on the state of Idaho with an economic footprint on the State is about $935 million or about two percent of the State's economy. As President Nellis reports, the State's investment in the University of Idaho is an excellent investment. He says, "With fully 70 percent of all research conducted in the state originating at the U of I, we believe we are the greatest partner the state has in fueling both its economic recovery and its future success."
6 Action required --
I talked with a member of the Idaho tax commission. He reported that in November $1.5 million from a reserve fund was transferred to the tax commission to hire part time tax auditors. Since that time they have recovered a net of about $5 million for the state. The commission estimates they should recover about a net of $10 million in unpaid taxes by the end of the fiscal year. With estimates of over $200 million in unpaid taxes I think it would be appropriate to expand the program. The cost - benefit ratio has always been 1:10. All tax exemptions should be reviewed and those judged not to be a value to the state should be eliminated and the revenues directed to the general state tax stream. Other revenue enhancement ideas are being discussed.
7. A bit of humor as I sign off this week: This headline caught my eye – "Floor Caves Under Weight Watcher Weigh-in".
A Weight Watchers' group gathered in Sweden for a routine weigh-in when the floor underneath then collapsed. No dieters were hurt but they probably have extra motivation to shed those pounds.
Well, that's it for
this week. I'd appreciate your comments and recommendations. My e mail is ttrail@house.Idaho.gov
And my office phone is (208) 332-1184.
Rep. Tom Trail
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