Idaho Gov. C.L. "Butch" Otter said he's anticipating no growth for the state's economy throughout the remainder of the 2010 fiscal year, and to combat the revenue shortfall he is proposing that all state agencies, including public schools, hold back an additional 1.6 percent. That would amount to spending reductions of $40 million.
The recommendation came during the governor's annual State of the State address, which he gave Monday before a joint meeting of the Idaho Legislature at the newly renovated capitol building in Boise. The address included a proposal to not increase taxes.
In September, Otter ordered spending holdbacks from state departments ranging from 2.5 to 7.5 percent to help curb an estimated budget shortfall of $151 million for the current fiscal year, which runs from July 1, 2009, through June 30, 2010.
Overall, the decreases in spending represent 4 percent of the state's general fund.
With these cuts and by spending reserves, the deficit has been reduced to about $50 million, but in the case that the state does not experience economic growth in the next year, the 2010-11 budget is looking bleak as well.
Otter said the additional cuts would help keep the state from dipping too deeply into its reserves, though the governor's proposal includes the use of about $241 million from reserve accounts, to address shortfalls for the remainder of this fiscal year and in 2010-11.
"We have used almost $318 million from reserve accounts and federal stimulus funds during [the past two years] to reduce the impact on public schools," Otter said in his speech.
In addition, he said about 400 positions should be eliminated from state government, partially by not filling 375 jobs currently vacant.
Other savings proposed include delaying expenditures on a livestock research center near Twin Falls, due to receive $10 million, folding the responsibilities of the Department of Parks and Recreation into the Idaho Department of Lands and the Department of Fish and Game, and eliminating $1.7 million designated to go to Idaho Public Television over the next four years.
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During his address, Otter repeatedly touted the independence of Idaho residents and the need to limit overall government involvement, specifically stating his opposition to the federal health care reform bill on the grounds that increased Medicaid expenses would end up hurting the state's education budget.
However, he did say the state could benefit greatly if an effort to make Mountain Home a training center for the new F-35 fighter jet is successful.
Despite drawing applause at numerous points during the address, there were some who were not completely on board with what was said.
"I was hoping he would talk about some ways to increase jobs," said Rep. Wendy Jaquet, D-Ketchum. "I'm concerned about the 70,000 unemployed in our state. I was looking for a vision."
Democratic gubernatorial candidate Keith Allred had much harsher words in his response to the speech.
"Gov. Otter today delivered a message of decline and retreat," Allred said after the address. "Idahoans deserve better."
Allred suggested eliminating tax exemptions as a means of "reducing the overall tax rate," resulting in job creation.
On a local level, Otter finished his address talking about Bowe Bergdahl, a 23-year-old U.S. Army private from Blaine County, captured last summer by the Taliban in Afghanistan.
Otter asked members of the House and Senate to "join me as well in praying for [his] freedom and safe return to his Idaho family."
Jon Duval: jduval@mtexpress.com
Gov. C.L. “Butch” Otter, left, talks to constituents last month in Carey, which he designated as “Capital for a Day.” Photo by David N. Seelig
