Previewing the Idaho Legislature is a bit of a cottage industry--with five legislative previews scheduled in early January, each offering insight from self-promoted insiders over breakfast, lunch or cocktails.
But one need look no further than a few select numbers to keep tabs on whether lawmakers will either pull Idaho out of its worst recession in a generation or mire the state in partisanship in a run-up to what is surely to be a bruising election season.
1. The Revenue Number: Keep an eye on Sen. Diane Bilyeu's projection
Contrary to popular opinion, the State of the State address is not the starting pistol to the legislative session. In fact, lawmakers began meeting a full week before Gov. C.L. "Butch" Otter laid out his vision before the legislature on January 9.
The Legislature's Economic Outlook and Revenue Assessment Committee--18 bi-partisan members of the Idaho House and Senate--sat through marathon hearings while debriefing analysts, managers and economists about each of Idaho's big-ticket industries: agriculture, construction, health care, forestry, real estate, technology, you name it.
The information was not simply anecdotal. EORAC members were tasked with the first critical homework assignment of the legislative year: to come up with a best guess of what Idaho's general fund revenue will look like for Fiscal Year 2013, which begins July 1, 2012. And there is some gamesmanship involved. Legislative budget analyst Keith Bybee quickly invoked a popular game show in "awarding" last year's best guesser.
"Sen. Diane Bilyeu was the Price is Right winner," said Bybee. "She came closest to last year's real revenue collections without going over."
In January 2011, Bilyeu, a Democrat representing Pocatello's District 29, estimated that last year's general fund revenues would come in at $2.42 billion. Her guess was quite impressive, considering that when the books were closed, Idaho's actual FY 2011 collections totaled $2.44 billion.
Otter made a $100 wager with former Gov. Cecil Andrus last year regarding revenue projections for FY 2011. Ignoring his own chief economist Mike Ferguson's revenue forecast of $2.43 billion, Otter and the Legislature instead chose to craft a budget based on a much lower estimate of $2.29 billion. Andrus called out Otter, saying the real number would come in much closer to Ferguson's guess. Otter lost the bet, paying Andrus $100. Ferguson has since stepped away from his state job, and is now heading the Idaho Center for Fiscal Policy, a non-profit group analyzing tax and budget policy.
2. Idaho's Unemployment: What's the real number?
Revenue collections--corporate taxes, individual taxes, sales taxes--all point in one direction: employment. The more Idahoans employed, the healthier the economy. It's that simple. It's also that complex.
"The economy simply isn't producing jobs fast enough," state economist Derek Santos told EORAC members. "There's a great amount of uncertainty."
The recession devastated Idaho. In statistics unveiled January 5, Idaho Department of Labor spokesman Bob Fick said at the height of the recession, the Gem State experienced the second-worst job loss in the region, second only to Nevada.
"We lost more than 8 percent of our workforce," said Fick.
Compare that to Oregon's loss of 6.5 percent, Washington's loss of 4.2 percent and Utah's loss of 3.8 percent. Post-recession (November 2010-November 2011), Idaho has gained only .2 percent in jobs.
"This last year , we saw the same economic malaise that we experienced in the final nine months of 2010," said Fick.
Lawmakers, heads in hands, listened intently to Fick's news but not all of the headlines were terrible.
"More recently, our unemployment rate has fallen," said Fick. "And if our most recent jobless rate [8.5 percent] holds, that would be the largest drop in Idaho unemployment since the double-digit recession of the 1980s."
But without missing a beat, Fick cautioned legislators to consider the new complexion of Idaho's unemployed, underemployed and just-plain frustrated.
The "frustrated," according to Fick, are the approximately 1 percent of the potential workforce that "has become discouraged about the job market and not on any official chart. They've dropped out.
"Add that 1 percent to an approximate 9 percent unemployed," said Fick. "And then on top of that is another 6.4 percent of Idahoans underemployed. These are the tens-of-thousands who have taken part-time jobs when they are in need of full-time employment."
Combine all three and you have more than 100,000 people looking for jobs.
"And that doesn't include people who have full-time jobs who feel that their salary is inadequate, or that they aren't being put to best use considering their skills" he said.
In other words, the next time you read Idaho's unemployment figures, you may as well tack on at least 7 percent.
"It will take at least to the end of 2014, and possibly into 2015, before Idaho recovers the nearly 60,000 jobs that the recession took from us," said Fick.
While Canyon County Republican Sen. Curt McKenzie, representing District 12, expressed concerned over the labor statistics, he said he was even more frustrated over what kind of salaries might emerge in a post-recession economy.
"Our general fund is going to reflect more of what people are making rather than what the unemployment rate will be," said McKenzie. "For example, a college graduate asking me if I want fries with my burger."
Fick unveiled a much-anticipated analysis of what kind of jobs might await the eager-to-be-employed. According to a Labor Department survey, Idaho is expected to see the greatest growth in health care and social assistance--as many as 4,700 new jobs in a two-year period. Other significant growth is projected to occur in retail (1,200 jobs), construction (600 jobs) and the generic category of professional and business services (800 jobs). On the downside, the analysis projected further shrinkage in federal government jobs in Idaho (a loss of more than 600) and mining, forestry and/or logging jobs (a 230 deficit).
3. Billions in Exports, Millions in payroll taxes: The Asian solution
In 2010, Idaho reported $5.15 billion in export commodities. Food, agriculture, transportation products, minerals and fertilizer all paled in comparison to electronics. In fact, 58 percent of all Idaho products sold overseas were electronics. That doesn't necessarily mean the electronics are shipped from Idaho, but they are certainly sold from an Idaho company: Micron.
"There are some people out there who are convinced that we're selling Idaho to China. I can assure you that we're not," said Jeff Sayer, the Eastern Idaho businessman who recently took over as director of the Idaho Department of Commerce.
But Sayer wasn't completely correct. In fact, Micron's revenue for Fiscal Year 2010 indicated that a whopping 70 percent of its revenue came from Asia, 21 percent came from the Americas and 9 percent from Europe.
"There's a tremendous amount of business in Asia," said Sayer. "We're going to spend a lot more time there. We're going to make sure we're a great trading partner for them."
Sayer pointed to Idaho's top export destinations in 2010: Singapore ($792 million), China, Hong Kong and Macau ($657 million), Taiwan ($627 million), South Korea ($601 million), and Japan ($273 million).
It's estimated that a minimum of 5,000 Idahoans are employed by Micron (Micron's government affairs manager Mike Reynoldson wouldn't give exact payroll numbers when he spoke to EORAC members on Jan. 6). Thousands more jobs hang in the balance when considering Micron's tangential economic impact.
As an example, Reynoldson pointed to Micron's current construction of a 175,000-square-foot research and development fabrication facility on its Boise campus.
"About 550 local jobs can be attributed to the construction," said Reynoldson. "Plus I can tell you that we have about 5 million pounds of steel in that construction and a lot of the fabrication was done in Middleton."
Reynoldson did make a point of saying that Micron recently added approximately 12 percent to its Idaho workforce. Payroll taxes contribute significantly to Idaho's general fund revenues, but Micron pays little to no corporate income taxes because of an agreement with the state that allows the corporation to carry forward its financial losses against any company profits.