Analysis: Otter’s budget balancing act

In the ranching parlance Butch Otter often favors, the governor found himself straddling a fence Monday.

Otter showed some support for his education reform task force — offering a down payment on the group’s 20 far-reaching recommendations.

Otter also seemed to go out of his way to burnish his conservative credentials, four months away from a closed Republican primary election.

The result was a budget proposal for K-12 that drew some criticism from Republican state schools superintendent Tom Luna and legislative Democrats alike. And if lawmakers adopt Otter’s incremental approach, or something like it, much of the heavy lifting on education funding will remain on hold until 2015, and beyond.

Since August, when his 31-member task force completed its work, Otter has said it would take five years to put the group’s ideas into law. On Monday, the bottom line came into focus. The education task force’s recommendations carry a collective price tag of roughly $350 million; Otter’s 2014-15 budget proposal puts $54.7 million into these recommendations.

Most of that money would go into restoring “operational funding,” money cut from school districts’ budgets during the recession. Otter proposes putting $35 million back into operational funding — providing districts with money they can use to cover health insurance costs, pay utility bills or cover any number of other needs.

The state cut $82.5 million in operational funding during the recession, but Otter administration officials say the hole is even deeper than that. Accounting for growth, they figure it will take $113 million to make the schools whole.

By ramping up the effort to restore operational money — just three months ago, Luna recommended a $16.5 million increase — Otter could get support from school district leaders who have been clamoring for this money sooner, not later. And by putting money back into operational budgets now, the Otter administration hopes to have more flexibility to fund the rest of the task force’s ideas in future years.

In so doing, Otter ignores the single most costly recommendation from the task force: a teacher career salary ladder, which would eventually increase starting teacher pay from $31,000 to $40,000, and boost salaries for more experienced teachers as well. This plan carries a heavy price tag — $253 million, according to Education Department estimates — and it is tied to creating a new teacher licensure system, which won’t be ready before 2015.

Luna had hoped to put $16 million into teacher leadership bonuses, a stopgap while work continues on the salary ladder proposal. But Otter’s budget proposal puts no money into teacher pay raises. And gone from Otter’s 2014-15 budget proposal is $13 million for merit pay, a one-time pilot program in the 2013-14 K-12 budget.

This drew a pointed response from Luna — who, like Otter, is up for re-election in 2014.

“The governor’s budget proposes reducing overall teacher compensation in order to help schools pay the light bill,” Luna said Monday. “I believe we have the funding and the plan to accomplish both.”

Facing a challenge from state Sen. Russ Fulcher, a Meridian Republican courting votes from the GOP’s right wing, Otter’s budget and State of the State address struck several conservative chords.

His overall budget of $2.85 billion represents a 2.5 percent increase and adheres to a pledge he restated Monday: “I will not sanction growing our state government as fast as our economy.”

His budget earmarks $30 million for tax relief, and perhaps a second installment in reducing the personal property tax on business equipment and furnishings.

Otter’s budget proposal puts considerable money into state savings accounts. He would like to add $29.3 million into the Public Education Stabilization Fund, which now sits at $62.7 million, and $35 million into the overall Budget Stabilization Fund, which sits at $135.7 million. By state law, this Budget Stabilization Fund can account for no more than 5 percent of Idaho’s general fund budget — so Otter is planning to pursue a bill that would increase this cap to 10 percent.

In essence, this means lawmakers could be asked to vote to put more money into the bank, instead of putting it into classrooms or teacher salaries.

Which could leave them sitting on a precarious fence, as well.

More reading:

• From Clark Corbin: a detailed look at Otter’s budget proposal.

• From Jennifer Swindell: tepid reactions to Otter’s teacher salary proposal.

Kevin Richert’s live blog from Otter’s state of the state address.

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