Idaho Gov. C.L. "Butch" Otter announced last week a set of plans designed to reduce the state's estimated $151 million shortfall for the current fiscal year, which runs from July 1 through June 30, 2010.
To address this significant drop in anticipated revenue, Otter is asking for state agencies to cut expenditures to varying degrees, as well as requesting that the Legislature use nearly $50 million in reserves to prevent cuts to public schools.
Economists predicted at the beginning of the budget process that the state would complete the fiscal year with a $49.5 million surplus. The Leigislature approved a $2.5 billion budget for the current year.
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According to a Friday press release from the governor's office, between the spending cuts and the transfer in funds, the state could decrease its shortfall by about $99 million.
The spending holdbacks range from 2.5 percent for the Department of Corrections to 7.5 percent for the Department of Environmental Quality. Overall, the decreases in spending represent 4 percent of the state's general fund for the 2010 fiscal year.
"This is not an across-the-board holdback," Otter stated. "My executive order distinguishes between the critical, constitutionally required, essential and other services of state government. This goes way beyond the difference between 'necessary' and 'nice.' It goes to the fundamental requirements and expectations that we have for state government."
Even with these savings, the state is still looking at a shortfall of about $52 million. Otter said that he, along with state officials, will wait three months before attempting to erase the remainder of the shortfall.
Jon Duval: jduval@mtexpress.com
