Idaho Center for Fiscal Policy proposes a reallocation of available resources to increase investment in Idaho


Idaho needs a responsible, sustainable budget to run our state effectively and efficiently. In addition, the governor’s Task Force on Improving Education has called for an increased investment in our education system of $350 million. To better meet these objectives, the fiscal year (FY) 2015 Executive Budget released last week can be improved in several ways.


The Idaho Center for Fiscal Policy presents an alternative allocation of the state’s resources. It differs from the Executive Budget by:


1)    Rolling over the ending balance from FY 2014, rather than putting those dollars in rainy day funds.  Instead of transferring $71.7 million to the Budget Stabilization Fund, the Public Education Stabilization Fund, and the Higher Education Stabilization Fund, these dollars flow into FY 2015 where they ultimately provide the basis for a $66.1 million ending balance in FY 2015. That $66.1 million is in addition to $224.8 million that is already in the state’s six major reserve funds’ balances as of FY 2014. It is also $16.3 million higher than the Governor’s recommended FY 2015 ending balance.


2)    Restoring $35 million to the Department of Health & Welfare budget. This will restore most of the cuts—primarily to care for persons with serious disabilities—which were made to the FY 2012 budget. The additional $35 million in state dollars allocated for this purpose will yield over $100 million when federal matching dollars are included.


3)    Investing available funds in Idaho rather than relinquishing $30 million for tax reductions. An analysis of Idaho’s long-range fiscal situation indicates the state budget has no capacity for further reductions in the revenue stream, and if anything it will require additional revenue sources to fulfill the Governor’s promise to fully fund his education task force’s recommendations.


4)    Adjusting public school and state employee salaries by 4%. A 4% adjustment in FY 2015 will cost $21.5 million for state employees and $36.8 million for public school employees. FY 2015 marks the sixth consecutive budget the Governor has recommended no adjustments for inflation to the state’s workforce compensation. Current estimates are that state worker wages in Idaho are 19% below market levels, generating unnecessary and costly turnover.


5)    Giving education investment an additional boost of $34.5 million (bringing total increased support for schools to over $70 million). Schools received ‘one-time’ funds in this amount for FY 2014. This $34.5 million is added to the “Maintenance of Effort” section of the FY 2015 budget and made permanent. Other maintenance items and after-maintenance enhancement items in the Governor’s FY 2015 public school budget remain in place. Combined with the public school employee compensation adjustment, the ICFP budget provides an overall increase of 8.3% for public schools, versus the 2.9% increase in the Governor’s budget. This may sound like a large increase, but it only brings the FY 2015 public school budget to a level 3.6% ahead of FY 2008. Inflation alone over that period has been 13.5%.


6)    Taking advantage of federal dollars to increase Medicaid coverage to achieve substantial savings. A private firm found that ‘Medicaid Redesign,’ as it has been dubbed in Idaho, could yield $42.4 million in state savings in FY 2015. The state’s net savings consist of $9 million in increased administrative costs, offset by $40.9 million in reduced CAT program costs, $9.7 million in reduced behavioral health costs, and $0.8 million in reduced public health costs. (This figure does not reflect additional savings of $34.7 million that will occur at the county level, for a combined state and local saving of $77.1 million.)


The ICFP budget relies on the revenue projections used in building the Executive Budget, and leaves all of the Governor’s other expenditure initiatives intact. The six changes outlined above yield a budget for Idaho that addresses critical funding needs in the areas of public schools, health and human services, and employee compensation levels. The ICFP budget also leaves an estimated FY 2015 ending balance of $66.1 million, an ample cushion for unanticipated contingencies over the next year and a half. Finally, the ICFP budget fully funds the Budget Stabilization Fund to 5% (its statutory upper limit) in FY 2014. When combined with Idaho’s five other reserve funds, this yields a total reserve balance of $224.8 million at the end of FY 2014, a sizeable cushion if serious fiscal problems are encountered.


In addition to the immediate benefits for Idaho and our children, increasing these investments will have long-term positive impacts for our economy. Mike Ferguson, Director of the Idaho Center for Fiscal Policy, said, “In the 1990s, when we collected more of the revenue we needed, our economy grew faster than almost all other states. Today, after more than a decade of reduced investments, that trend has reversed. Idaho is now the second poorest state in the nation with the highest percentage of minimum wage jobs; and we invest substantially less in education than all but one other state.”


FY2014 Table


FY2015 Table


Click the following link for a PDF version of the News Release and budget tables:

ICFP Responsible Budget News Release 20140113



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  1. Laurynda Williams says:

    This budget makes much more sense then the one Governor Otter has proposed. If we could get the Legislature to act on this & actually do the business of governing, great things could happen. I am particularly upset about the refusal to Redesign Medicaid. Idaho needs to take care of all of it’s citizens, not just give tax breaks to the rich.

  2. Vern Lenz says:

    The ICFP budget should be adopted, especially because of these proposals:

    2, Restoring $35 million to the Department of Health & Welfare budget. (The IDHW also needs to do its business efficiently and well; at present, it’s dysfunctional.)
    4, Adjusting public school and state employee salaries by 4%. (You’d be demoralized too if you not only never got a raise, but your salary wasn’t even keeping up with inflation. I’m not a government employee; I think they just need a break already.)
    5, Giving education investment an additional boost of $34.5 million. (Seriously, fellow Idahoans–how low can we allow our government to take us with the Luna laws and the low priority we give to education? I was raised and educated in Idaho; I have close relatives who are teachers, and the issues teachers face with budget cuts and overtesting are absurd. Idaho teachers left in droves last year, and if you explain it by anything other than poor teaching conditions, please ask them personally.)
    6, Taking advantage of federal dollars to increase Medicaid coverage. (Are you totally convinced this is a good idea? I’m not, but it should happen anyway, because even if it meant that the federal government took over the functions of IDHW–and it would not do any damage whatsoever to our precious state rights–the federal government could not do a worse job than is currently being done by IDHW. And no thanks to the governor, either–the needs of the disabled and economically disadvantaged are not only not his priority, but he also dismisses them as if they’re not responsible citizens trying their best.)

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