State of the State
Michelle Stennett
January 11, 2020
"Someone's sitting in the shade today because someone planted a tree a long time ago. --Warren Buffett
Before giving a brief overview of the Governor's State of the State Address and Budget, it is important to layout the landscape under which this legislative session will operate.
During the 2019 interim, the Governor's agencies and departments scrutinized all of the rules that guide their operations. It was a herculean effort to remove obsolete language, consolidate practices, and update processes where possible. This good housekeeping was long overdue, but it is now up to the Legislature to approve or reject everything that guides government, volumes of rules, in order to make sure deleted or modified restrictions or language do not have a dangerous impact on the lives of Idahoans.
Going into this budget setting cycle, revenues show a robust economy with corporate tax income higher than anticipated and the online sales tax revenue bringing in $7 million a month! Carryover is $20 million while new revenue received by the state over the last 6 months has $34 million in the bank, showing a strong economy. The Rainy Day Fund, our savings account, is full.
Yet, the Governor requested budget cut backs of 1% from state agencies and department for 2020 ($19 million) with projected cuts of 2% from their budgets annually ongoing beginning 2021. Small agencies with tiny budgets will be crushed and will be forced to eliminate important programs, many that take care of our most vulnerable populations. The online sales tax revenue of $7 million monthly never goes into the State General Fund, but into a tax relief fund, so is not used for public services (like transportation infrastructure) and is not counted in the revenue sharing formula given to our cities and counties. The K-12 education budget is woefully inadequate, having only increased by 1.5% since 2009 with 1,500 more students in the system annually. His $30 million budget increases teacher salaries, but does not fund their healthcare increase. The Governor mandated holdbacks from higher education, including a one year tuition and fees freeze in our four universities. The impacts from both holdbacks and freezes range from cutting student services to cutting faculty.
Even though it is fiscally prudent to put some away in savings, these cuts are austere enough to shut down important public services, endanger public health and safety unnecessarily, and further compromise our education system. The state is growing. There is plenty in the state coffers to pay for Medicaid Expansion outright this year ($41 million). There is no reason for holdbacks; these cuts are politically driven.
The ill-conceived tax cut of 2018 did not cut taxes for the vast majority of Idahoans and many saw their taxes increase. According to the Idaho Department of Labor, Idaho is 49th in the nation in weekly average wage ($825) and 43rd in wages nationally ($36,260). All other surrounding states are higher. The state has grown 1.8%, with the majority of the in-migration over 65 years of age. Home values and property taxes are on the rise which means residents in 39 out of our 44 counties pay more than 30% of their income in housing. The state should be budgeting for a long-term plan to improve infrastructure (roads, bridges, water, sewer, broadband, education, healthcare) and investing in an economy that provides living wages, affordable housing, and decent healthcare.
Governor Brad Little's 2020 State of the State address hit so many of the right notes. The Governor highlighted the importance of investing in education and literacy. He even said, "I subscribe to the view that it is better to prepare children today than to repair the future." His budget significantly increases funding for IT and cybersecurity. His address talked about securing Idahoans' prosperity and quality of life, making Idaho safer, and promoting healthy lands and waters.
Disappointingly, the Governor fails to acknowledge that we have to invest in Idaho to make those ideals a reality. His overall budget proposal represents further cuts in a state that never fully restored funding from the last recession.
Sen. Michelle Stennett is the Senate Minority Leader. She represents Blaine, Camas, Gooding, and Lincoln counties in the Idaho State Legislature.
Respectfully,
Michelle