LEGISLATIVE NEWSLETTER I January 8, 2008

 Constituents:  Governor Otter presented his State of the State and Budget address yesterday.   The response was generally favorable.   Here are a few of the highlights. It is important to remember that Idaho follows national economic trends by about 6-12 months. Generally, economic news is not good.   The Governor's of Arizona and California have already called for a 10% holdback because of declining state revenues.   I remember this is what we did back in 2002 and it was not a pretty picture.

  1.  Pay Increase for State Employees -- The Governor is recommending a 5 percent pay increase for state employees, and that teachers be properly paid.   The Governor wants to reduce some of the health benefits to make government jobs more equivalent with those of the private sector.   I think he is making a mistake in this regard.

  2.  Idaho Opportunity Scholarship Program -- we established a $10 million trust fund for students from low income families last year and $2 million in scholarships.  The hope was to approve an addition of $10 million a year to the trust fund until we reached $40 million.  So it was a surprise for the Governor to come out and request $50       million for the trust fund.   My feeling is that we will get additional funding for the trust fund but not the $50 million the Governor is requesting.

  3.  Road and Bridges -- The Governor recommended shifting almost $17 million /yr from the Idaho State Police.  He would replace this with General Funds.  He is also supporting a local option tax for cities and counties.   If the local option tax proposal were passed by the 2/3rds margins then the funds could only be used for highway, bridge, and building repair and maintenance.

  4.  Taxes -- The Governor is again proposing a grocery tax credit for lower income citizens.  This could be as high as $90/person and total around $30 million/yr.   The Governor also supports the elimination of the business personal property tax.   This figure runs around $110 million and would be phased out over a eight year period.   In Latah County this would help our 2,300 businesses, but it would also mean that the County would have to come up with additional funds for services, etc.  This can only be done via an increase in property taxes.   I can only support this legislation if the State kicks in money to make up the difference to the counties.

  5.  Superintendent of Public Instruction Luna's $60 million Teacher Merit Pay Program was not mentioned in the State of the State address.   The Governor has been quoted as saying the program is too costly.

 That's all for now.  Please send your comments, recommendations, etc. to me via e mail:  ttrail@house.idaho.gov or ttrail@moscow.com

 Representative Tom Trail .

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