LEGISLATIVE NEWSLETTER 1 --JANUARY 12-16, 2009

 Constituents:

 The Idaho Legislative session got off to a somber start with Governor Otter's State of the State Address.   Coupled with the holdbacks already in place for the current fiscal year, the Governor proposed a fiscal year 2010 budget with an overall 7% reduction.  These reductions ranged all the way from 5% for public education to 51% for Parks and Recreation.   Let us look at the impact on several of the major state programs.

   1.  Public Education  --  Public education's budget is not reduced  FY09 but the Governor proposes a 5% reduction for FY10.  The impact will mean that some of the teachers and staff will lose their jobs, and class sizes will be increased. We have a public school reserve fund of about $114,000 000.  Some of the reserve funds would be tapped by the Governor for FY10 -- approximately 35%. Personally I'd like to see a much larger portion of the reserve fund utilized to reduce the damage.

  2. Higher Education  --  In 2003 Higher Education was hit with a 10% hold back.  This meant that many key programs, faculty, and staff were lost.  During the past six years many of those programs have been re-established, but now we are faced with another 10 percent cut.   Students will be faced with higher costs for education.

  I asked Legislative Services to run the figures comparing the State's contribution to Higher Education in 1988 as compared to 2008.   The figures are revealing. In 1998 Universities and Colleges received 15.76% of the General Budget.  By 2008 the figure had fallen to 10.3%.   So within a 20 year period funding for higher education has fallen 5.73% in terms of the percentage allocation compared to the total budget.    It is my hope that some of the other reserve funds can be utilize to reduce the damage that will occur.

 3.  Transportation  --  This is Governor Otter's top priority.   He want to raise taxes by some $240 million to improve Idaho's transportation infrastructure -- roads and  bridges.  Everyone agrees that this needs to be done; however, a wide coalition across both party lines is opposed to increasing fuel taxes and registration fees at this time because of the severe economic pressure on Idaho families. Speaker of the House, Representative Lawrence Denney, said that it was more  important to support the needs of people than to fix potholes.  That basically echoes my sentiments as well.

 4.   Economic Overview  --  The Legislative Outlook Committee estimates that the economic outlook is about $102 million below that of the Governor's projections.   January sales tax returns were down over $14 million as compared to last year.   Most economists forecast a gradual recovery but not beginning until the last of year.   So we just don't know how bad it will get.

    Many legislators would like to utilize more of our reserves than the Governor has proposed.  I support this initiative.  One can compare it to your house burning down.   The fire department comes out but only wants to use about half of the water to put out the fire instead of utilizing all of it.   Even Steve Ahrens, former head of   IAIC (Idaho Association of Industry and Commerce) said that he would utilize the   reserves to the maximum.

    Senator. Schroeder and I will be introducing legislation that has been talked about numerous times over the past years but could provide some additional revenue to the state.   The proposal is to sunset all of the 75 sales tax exemptions.   This would then allow the Legislature to review each exemption to see if it provided a benefit to the state.   If the exemption did not benefit the state and was then repealed it   could provide some additional funds for key state programs.   While the idea is not new, it could provide the state with another alternative to come up with some additional funds without raising taxes.

 5.   Legislator Salaries  --  An independent citizens group makes salary recommendations for legislators.   This past year they recommended a 5% salary increase.  By law this increase went into effect on Dec 1, 2008.   One of the first pieces of legislation that will be introduced this session will be to repeal the increase.  This is in stark contrast to the fact that Congress just approved a salary increase for their members.

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