Analysis: Otter’s cautionary budget tone

The state’s 2012-13 budget year ended with another robust month of tax collections. And cautionary words from Gov. Butch Otter.

“Don’t get the idea that we’re flush just because we ended the budget year with a few extra bucks,” Otter said Thursday.

When the 2014 legislative session opens in six months, and Otter presents a 2014-15 state budget blueprint, don’t bank on a big spending change. For state agencies — and for a public school system that receives 47 percent of the state’s general fund — Otter went out of his way to temper expectations Thursday.

Here are a few hard figures about the state’s “few extra bucks,” from the state’s Division of Financial Management:

  • In June, tax collections finished $17 million ahead of projections, a 6.5 percent bulge. It’s the fifth time since December that the monthly tax collections beat projections.
  • On June 30, the state ended the budget year $92.3 million ahead of forecasts made just in January. The performance was strong across the board: sales taxes and corporate and personal income taxes all came in over projections.
  • The budget year ended with $2.75 billion in tax collections, up 6.3 percent from the previous year.

The bulk of the state’s extra money, $85.4 million, went straight into the state’s Budget Stabilization Fund. All but drained during the Great Recession — to prevent even deeper cuts to K-12 and other public services — this rainy-day account now exceeds $135 million.

Otter didn’t act unilaterally to bank this extra money. A “surplus eliminator” bill, directing the transfer of surplus money into savings, passed the Legislature without a single no vote.

If there is temptation to open the budget purse strings — especially in light of better-than-expected tax collections in all categories — there won’t be a shortage of ideas for how to spend the money. As Otter said Thursday, “We have plenty of needs and plenty of priorities.”

K-12 is no exception. And here, Otter need look no further than the education reform task force he assembled in December.

Last week, one of the task force’s subcommittees floated an idea to create a career ladder, designed to boost pay for beginning teachers and veteran instructors alike. The cost: $35 million to $43 million a year for the first five years.

Then there’s also the question of technology. The 2013-14 K-12 budget puts $13.4 million into technology, including $3 million for technology pilot projects announced July 1. As Superintendent of Public Instruction Tom Luna pointed out, the 11 pilot grant recipients serve about 5,800 students, 2 percent of the state’s overall public school enrollment. If the task force and the Legislature hope to build on the pilots, and replicate the programs on a larger scale, this would come at a cost well above $3 million.

On Thursday, Otter’s message was clear. Overextending on state programs carries a cost, especially in the face of federal budget uncertainty. To amplify this point, Otter also issued a guest opinion touting the state’s balanced budget (required under the Idaho Constitution) and decrying the budget dysfunction at the federal level.

“Here in Idaho, even at the moments of our greatest internal divisions we enjoy a unity of purpose and clarity of principle regarding our budget that bureaucratic and partisan entropy will not permit on the federal level. Here, our budget debates have very real and direct meaning, and very real consequences.”

The 2014 budget debate is under way.

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. He can be reached at [email protected]

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