Idaho Center for Fiscal Policy: The Governor's Budget Doesn't Balance


At first glance, the governor's proposed fiscal year 2016 executive budget looks pretty good. It pencils out with a balance of more than $3 million, but the Idaho Center for Fiscal Policy did some additional math and came up with a much different sum: the state faces a possible $320 million shortfall. 

In its analysis, the center found that the governor's proposed budget does not factor in the cost of pending fire suppression, expected to run to $27.7 million, nor does does it anticipate liabilities from the cancelled Idaho Education Network contract rising above $6.7 million.

The analysis points out that costs associated with the failed IEN contract, which was jettisoned following a judge's ruling that it had been improperly awarded, could rise to $13 million in order to replace prior years' federal funding. What's more, should aggrieved broadband Internet provider Syringa sue the state over the contract, the analysis suggests the company's claims could be as high as $22 million.

If that money is pulled from the general fund, it will take from other programs like education and public employee compensation, as well as roads and bridges.

While Governor C.L. "Butch" Otter stressed the need for more education spending in his State of the State address, it appears that commitment falls short in the 2016 budget proposal. The proposed budget raises school funding by 7.4 percent, or $101 million—less than a third of the $352 million recommended by the Governor's Task Force for Improving Education to restore basic funding. 

Higher education also did not "fare nearly as well" in the budget proposal, according to the analysis. While colleges and universities asked for a 19.4 percent increase in funding, they received a 3 percent increase. Community colleges, which requested an increase of 13.1 percent, would receive a boost of 1.5 percent instead.

The budget doesn't make room for a reduction in the gap between what state workers earn and market wages. The center's analysis states that one out of five state employees make less than $20,000 a year, and more than half make less than $40,000. That's 20 percent less than the market rate. There is no extra revenue in the state to begin closing this gap, however. 

Funding from roads and bridges has always come from gas taxes and vehicle registration fees, but the analysis found that level of funding hasn't kept up with maintenance needs. If that money also comes from the general fund, education funding loses out again.

The Idaho Center for Fiscal Policy did state that there are available dollars to help the state balance its proposed budget. If the governor foregoes the first year of proposed $17.8 million in tax cuts and accepts the $33.9 million in savings by using federal dollars for the Healthy Idaho Plan, the budget would have a positive ending balance of as much as $27 million. 

Read the full analysis here: 

See related PDF Executive_Budget_Analysis.pdf