Rep. Tom Trail

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                           Legislative Newsletter VI—February 15-21, 2010

Constituents:

A number of key issues faced the Idaho Legislature this week.

   1.  House votes to stop PERSI COLA---The PERSI Board recommended in December that retirees should receive a 1% COLA on March 1st.   I had an hour meeting two weeks ago with Don Drum who is the PERSI Director, and he clearly showed me that the fund can easily pay out the 1% COLA.  It is a dedicated fund, and the Directors and PERSI management have one of the top retirement funds in the U.S.  So what happens is that the conservatives in the Legislature decided that everyone must share in the misery of the recession and voted to cancel the COLA.  Rep. Bob Schaefer and I were the only two Republicans to vote against the resolution.    There is some concern that conservatives might be looking at a way to tap into the fund in these hard times.  This would be a disaster.  The State of Illinois has borrowed more than $80 billion for their retirement fund.  Everyone looks at our Social Security fund and predicts disaster, but the problem is that Congress is at fault for borrowing and not repaying back to the fund.

  2.   Idaho Public TV -- I've probably received more mail on this issue than any other.   My understanding from JFAC is that IPTV will take a cut in the budget but not more than other agencies, and that any long term plan by the Governor to eliminate state funding entirely is on hold.  The Governor apparently didn't consider that if all state funding was eliminated that the State would have to pay back the Federal Government for federal funds that were used for equipment to modernize the IPTV system.

  3.   Office of the State Board of Education Votes to Give University Presidents absolute authority over faculty contracts, furloughs, tenure, etc.  In a move that will no doubt bring censure and black listing of all Idaho Institutions of Higher Education by the American Assocation of University Professors and the American Federation of Teachers, the OSBE approved this policy on Thursday.  Rep. Ringo, Rep. Chavez, and I joined university faculty in speaking out against this poorly conceived move.  At no time were faculty involved in the decision making process.   Even the ISU President stated that he felt that the furlough policy was "illegal" and that he would not abide by the decision.   A group of legislators will ask the Idaho State Attorney General to investigate the process by the OSBE to establish the policy with specific regard to violation of contract law (10 Amendment),  due process, and including the exclusionary process without faculty input used to reach the final decision.   These legislators have also developed legislation that would establish a Legislative Financial Crisis Review Committee giving the Legislature oversight over the Board.

   4.  Education Funding -- Public education will be held harmless through June 2010 with an input of $88 million from reserves and stimulus funds to make up lost revenue.  However, with FY11 coming up there is a predicted shortfall of $135 million for public education.   If the economy does not improve this will represent a 9% cut in the public education budget.  We've also heard that the cuts may go as high 12%.   Over 50 school districts reserve funds are almost down to zero.   I developed a legislative proposal that would allow districts on a voluntary basis to opt out for two years of meeting math and science standards.   This move would allow districts to make the decision based on local circumstances more financial flexibility--an estimated $5 million/year.  Some 57 districts reported they would take advantage of the proposal.  JFAC Co-Chair Rep. Maxine Bell told me to "Go For It." when I talked to her about the proposal.   It may be that JFAC will incorporate this into intent language with the public school budgets.  The House Education Committee supports granting districts financial flexibility and lump sum funding to maximize local school budgets.  Higher Education is also looking at a potential 10% cut this coming year.

   5. Potential Tax Hike -- 2011 could bring Idaho a tax hike  --  this was the headline in the Idaho Statesman this week. No one is predicting a tax hike this session with an election year coming up, but with FY2011 looking like another economic train wreck, several key political figures including Gov. Otter have said it might be a time for reviewing the 75 tax exemptions which take away about $1.7 billion from state revenues each year.   If the tax exemptions are found not to be beneficial to the state then the money from those exemptions could go into the state revenue stream target for education.   Sen. Schroeder and I as well as other legislators have legislation in the House Rev and Tax that would set up the process of reviewing exemptions to see if they are beneficial to the state or not.  We've been talking about the need of doing this for a number of years.

   6.   Funding State Parks and Recreation Agency -- Sen. Schroeder and I are working with Director Nancy Merrill on an idea to help fund Idaho Parks and Recreation.  We are proposing that an advisory question be put on the November ballot for voter input.   The basic idea would be that when each tax return is filed with the Idaho State Tax Commission then $5 from that return would go into the State Parks and Recreation Fund.  The return could be up to $3.5 million/year.  We hope to discuss this idea with the Governor next week.

Well those are some of the highlights of the week.   Please send me your comments and suggestions.

My e mail is ttrail@house.idaho.gov and phone (208) 332.1184.

Rep. Tom Trail

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