Idaho Gov. Otter: 2011 budget will be more than 4 percent less than current year

Idaho gov: 2011 budget to be less than this year

BOISE, Idaho — Gov. C.L. “Butch” Otter said he aims to cut Idaho’s budget again this fiscal year and then leave it steady for 2011 to offset lagging tax revenue that’s not expected to recover quickly.

Among the casualties expected to help fill the $52 million projected deficit that remains after Otter trimmed budgets by 4 percent in September is public education. It has been buoyed by state reserves, but wouldn’t fare so well during a next round of cuts, according to a plan backed by the governor and GOP leaders, and already opposed by Democrats.

Otter on Thursday didn’t say how much he wants to cut Idaho’s remaining $2.4 billion budget for the current fiscal year ending June 30. He’ll announce that in his State of the State address Monday to open the 2010 session, he said at a legislative preview sponsored by The Associated Press.

Idaho’s unemployment rate is 9 percent, with the rate three times that in some areas. More than 60,000 people lost their jobs in two years. Though Otter sees bright spots — such as Micron Technology Inc.’s $204 million quarterly profit last month — a real recovery won’t arrive soon enough to end austerity measures begun more than a year ago, he said.

“We will be announcing for 2011 a no-growth budget (from) wherever we end up on June 30,” Otter told reporters. “We’d like to believe that things are going to change. But we still have to be responsible and we still have to submit a balanced budget.”

In a Dec. 7 letter, Senate President Bob Geddes, R-Soda Springs, and House Speaker Lawerence Denney, R-Midvale, asked Otter to quickly order another 2 percent in cuts before the session started. Otter refrained, in part because of the holidays, uncertainty over the latest tax revenue figures, and a desire to involve lawmakers soon to descend on Boise.

As deep as Otter’s proposed cuts may run, however, they may still not be enough for lawmakers who have a more dour view of Idaho’s economy than Otter’s staff, including state economist Mike Ferguson.

The four-Democrat, 14-Republican economic outlook committee is compiling its own revenue projections.

Its GOP majority is likely to favor cutting budgets even more than Otter will recommend, as it did in 2009.

“It’s a lot easier to add money to a budget than it is to take money away,” Denney told reporters Thursday.

Idaho’s general fund share for public schools in the current fiscal year was cut to $1.3 billion, down 7.7 percent from 2009. And Otter has asked lawmakers to tap $49 million from a public education stabilization fund to make up for schools’ share of his September holdbacks.

But Otter and majority GOP leaders have agreed not to tap the remaining $23 million in the education fund to make up a next round of cuts for schools. If individual Idaho districts need to, they could borrow from reserves against their 2011 funding to meet their contractual obligations for the current year, according to the plan.

“Or, school districts have other mechanisms to raise money, too,” said Geddes. “They could ask their patrons to support an override bond levy.”

Superintendent of Public Instruction Tom Luna declined to comment, saying he would wait until Monday. But he has said he’ll submit a flat 2011 budget to lawmakers this session.

Minority Democrats immediately panned the loan plan, saying it would just delay, not solve, a financial crisis for already cash-strapped schools. At least 23 of Idaho’s 115 school districts have already declared financial emergencies allowing them to cut teacher pay. Some 50 schools have drained their local reserves.

“There seems to be political expediency in postponing hard issues,” said Senate Minority Leader Kate Kelly, D-Boise. “It doesn’t seem like a good way to do business.”