BOISE — When state lawmakers open the 2019 legislative session on Monday they will be facing budget uncertainties that they haven’t seen in several years.
Through the first five months of the state’s current budget year, state revenues are lagging behind projections by $62.9 million, according to the Division of Financial Management and Legislative Services Office. What’s more, actual revenue is $27.2 million behind where it was at the same point a year ago.
The problem is weaker-than-expected income tax collections. But regardless of the cause, the revenue situation is likely to breed caution in the budget-setting process.
“It’s cause for caution,” said Rep. Wendy Horman, R-Idaho Falls, the House vice chairwoman of the Legislature’s joint budget committee. “Sales and corporate tax revenues are up, but personal income tax revenues are down. It’s a challenging trend that will make this year particularly difficult to predict revenue upon which to base a budget.”
It’s too early to tell exactly what the revenue shortfall might mean for education. But K-12 is the state’s largest general fund expense each year, accounting for about 48 percent of state spending. That means any budgetary squeeze could affect the piece of the budget pie available for education.
Although the session isn’t under way yet, several big-ticket education items are already on either this year’s or next year’s budget wish lists. These include:
- A $19 million supplemental funding request from Superintendent of Public Instruction Sherri Ybarra for her proposed Keep Idaho Students Safe school-safety initiative.
- $52.9 million for a fifth year of educator pay raises under the career ladder salary law.
- $27.8 million in additional funding requests from Ybarra to further bolster teacher salaries.
- $11.9 million for the first year of salary incentives known as master educator premiums, designed to reward the state’s most accomplished veteran teachers.
On top of education spending proposals, the Legislature is likely to consider a funding request to implement the Medicaid expansion voters approved through the passage of Proposition 2, and may receive increased funding requests for prisons or highways and bridges.
House Speaker Scott Bedke, R-Oakley, said there is a strong desire to honor the Legislature’s pledge to pay for the career ladder. He also expressed general interest in developing some sort of new plan to address education over the next five years.
“What’s in store for the legislative session will be driven by a couple of things,” Bedke said. “No. 1 is our desire to plan for the future, both in education and in the economy, to continue to position Idaho in ways that are favorable as to the business climate, the education climate and quality of life issues.”
In a conservative budget environment with a constitutional mandate to pass a balanced budget each year, that could lead to tug-of-war over spending priorities this year.
“We can’t spend money we don’t have,” Horman said. “With overall revenues already trending downward, putting pressure on available funding for the current year’s budget, I expect a very conservative approach to budgeting for the next fiscal year.”
“Everything is tempered on the revenue side and the budget side with caution,” he said.
More information about the budget and revenue should emerge in the coming days.
- First, on Thursday and Friday, the Legislature’s Economic Outlook and Revenue Committee is tentatively scheduled to begin developing a revenue forecast, which will help drive the budget-setting process once the session officially kicks off.
- On Monday, Gov.-elect Brad Little will issue a budget proposal in conjunction with his State of the State address.
- Also on Monday, DFM is also expected to issue a revised revenue forecast.
All three events should provide additional insight into how the budget is likely to shape up.