David Adler opines:  Aristotle, the great champion of the citizenry’s views, observed that if you really want to understand what a state values, observe how it spends its money. In an age in which politicians of every stripe and color declare, or at least feign, commitment to the “future of our children,” the universal yardstick for measuring the authenticity of their words can be measured in their support for education.

    Idaho, which prides itself as a “family values” state, ranks number 50 among states and the District of Columbia in per-pupil spending, according to a report issued by the U.S. Census Bureau. In 2010-2011, Idaho spent $6,824 per student. Idaho’s per pupil spending was 35.4 percent lower than the national average of $10,560. Only Utah, another self-described “family values” state, ranked lower, spending $6,212 per pupil.

    These expenditures betray the political and cultural portrayals and aims of the people of Idaho and Utah. Indeed, what they really reflect are the core values of the legislators whom the citizenry elects. When education expenditures occupy the bottom rung on the ladder of values, advocates of family values should ask themselves if they are getting the government they deserve.

    Last week, Idaho Voices for Children honored the iconic four-term governor of Idaho, Cecil D. Andrus, for his leadership in education, including the establishment of public kindergarten in Idaho and increased public school funding. In words that cut through the fog and smoke that mask the gulf between politicians’ rhetoric and deeds, when it comes to education, Gov. Andrus declared that it is time for Idahoans “to put our money where our mouth is,” if education is truly a top priority.

    Idahoans who truly value the future of their children can but cringe at the level of state support for education. A non-partisan goal if ever there was one, education as fulfillment of human aspirations, not to mention its utility as a stepping stone to a better life, should be enshrined on a pedestal, preserved and protected by Republicans and Democrats. Yet, Idaho’s per-pupil spending, adjusted for inflation, has fallen nearly 16 percent since 2007-2008. To place the neglect of education in sharp relief, Idaho spends $5,000 less per classroom than it did five years ago. Only four states have imposed harsher cuts in education funding since the recession unfolded across the nation.

    The implications of inadequate support for education — for Idaho’s children and the future of the state itself — are grim. It is no secret that various businesses that have eyed relocation to the Gem State have taken their jobs and money elsewhere because of their perception that Idaho’s workforce is under-trained and under-educated. The loss of jobs, with good wages and benefits, represents a stark challenge to the Idaho Legislature to reverse its recent trend of neglect.

    Governor Butch Otter’s Task Force for Improving Education has rolled out an impressive package of recommendations. The plan to restore $82.5 million in school operation funds and to boost teacher salaries by $250 million represents a solid start. The installation of wireless and broadband technologies at all schools across the state is a “must.”

    An improving state economy and a savings account of $140 million, and perhaps more, according to some economists, provides legislative leaders with a genuine opportunity to restore a measure of support for education, the central pillar of Idaho’s future. Failure to make these improvements will draw down the curtains on the declaration that Idaho is a “family values” state. It is high time for Idaho to demonstrate its commitment to education, the true measure of a state’s core values.

    David Adler is the Cecil D. Andrus professor of public affairs at Boise State University, where he serves as director of the Andrus Center for Public Policy.

    Read more here: http://www.idahostatesman.com/2013/10/24/2830731/idahos-level-of-education-spending.html#storylink=cpy



    The Times-News opines:  Idaho state government and technology contracts don’t mix.

    Yet another instance of cronyism surfaced last week, exposing the state’s broken system of insider favor and political gift giving.

    It’s the worst form of government, one that gives favor and taxpayer cash to the well connected and influential.

    Boise erupted in controversy last week when news broke that Your Health Idaho board member Frank Chan resigned from his post to accept a $375,000 consulting gig with the state health exchange. Executive Director Amy Dowd personally approved the deal with Chan, without submitting it to a formal bidding process by the health exchange.

    State House of Representatives Speaker Scott Bedke called the deal “indefensible” and state senators demanded the contract’s repeal.

    Chan suddenly withdrew from the agreement Monday as lawmakers lined up against him. The health exchange board responded Tuesday by gutting Dowd’s power to unilaterally dole out contracts, ruling that anything costing more than $15,000 must survive board vetting.

    Both are right-minded moves and we’re shocked the health exchange board permitted Dowd to have such power over the purse strings in the first place.

    But the real issue is that this sad story happened at all.

    Gov. C.L. “Butch” Otter’s office was aware of Chan’s contract, Otter’s office told us this week. But instead of demanding an open bidding process, Otter and his staff were merely concerned with making sure Chan tendered his resignation from the exchange board.

    This situation follows other allegations of cronyism earlier this year, when state Superintendent of Public Instruction Tom Luna was beaten up after awarding a broadband contract to a political ally’s firm.

    Dowd defended her move by arguing that the glitch-ridden Your Health Idaho website had to be updated as soon as possible in order to comply with the federal Affordable Care Act. Transparent government is apparently too clunky when things really need to get done, by her logic.

    Dowd built her defense while the buggy federal website was getting attacked from all sides and President Obama was trying to muster the nation’s best programmers to fix it. The White House wouldn’t have cared too much had the overhaul of Idaho’s state site been a little late.

    It is unnerving that Otter and his staff didn’t sink this from the outset. The fact that Dowd still remains in her six-figure job is upsetting. Situations like this are too often the norm in Idaho, and that is infuriating. It’s becoming increasingly clear that Idaho needs an independent oversight body that reviews state contracts and other ethical issues. Picking such a powerful oversight body wouldn’t be easy, especially if it’s to have any semblance of untainted credibility. Perhaps a representative of the majority and minority caucuses from both legislative houses and the Governor’s Office could staff the powerful oversight body we propose. That way, it would be composed of disparate political factions weighing in and keeping the public informed of the questionable deals weaving through Boise.

    Most states have public integrity or ethics commissions. Idaho — one of the few without such an oversight body — desperately needs one.

    Idaho is clearly the land of political favor. It’s time for those who have promulgated this farce to do their jobs and fix it.


    Betsy Russell reports Idaho’s tax burden per capita is 49th lowest in the nation, according to the latest results from an annual study by the Idaho State Tax Commission, and it’s the lowest among 11 western states. The study found that Idaho’s per-capita tax burden is $2,975, compared to $4,296 for the national average and a $3,648 median among western states. It compared individual and corporate income taxes, property taxes, sales taxes, and motor vehicle taxes, including fuel taxes and license and registration fees. Click below for the full announcement from the Tax Commission; you can see the full 50-page study here.

    The study focuses on fiscal year 2011, the latest year for which census figures are available. It found that Idaho’s overall tax burden was 30.7 percent below the national average. The state’s property taxes ranked 41st, at 39.3 percent below the national average; sales taxes were 38th, at 22.5 percent below average; individual income taxes, 33rd, 19.3 percent below average; and corporate income taxes 29th, 31 percent below average.



    KTVB reports:  A major contract is canceled and an investigation underway into Your Health Idaho’s handling of a recent deal.

    Last week, Executive Director Amy Dowd awarded a $375,000 technology contract to former board member Frank Chan.

    Chan did resign from his position on the board, leaving a vacant seat.

    But, the no-bid deal caused a controversy and sparked criticism by lawmakers and some board members themselves.

    On Monday afternoon, Chan himself canceled the contract.

    Then, on Tuesday, the board called a special meeting to discuss the issue.

    Chairman Stephen Weeg admitted that the board had been forced to work quickly and that has caused them to make some mistakes.

    “The decision was not unilateral, and it created a major mess for us,” said Weeg.

    It’s a mess that leaves some board members not just disappointed, but distressed over how the exchange handled this major decision.

    Board member Senator Jim Rice was clear that he viewed the deal as wrong.

    “Idahoans don’t see that as appropriate, you just don’t. That’s something that should have been recognized without a direct conjunction, it’s part of being a fiduciary,” said Rice.

    Board member Tom Shores said it’s an error they should have caught.

    “We should have caught things with Amy, there should have been some alarms going off with Frank all those things should have occurred that didn’t occur,” said Shores.

    Executive Director Amy Dowd defended the no-bid deal with the former board member, saying they are under a tight deadline to get this work complete.

    “I made the decision to contract with applied computing because they have the background and the experience needed for this challenge,” said Dowd.

    Some, like board member Kevin Settles, supported Chan and his expertise the field.

    “This is a very difficult task with very few people who know what the heck is going on, and I just thought he was a tremendous benefit to the board,” said Settles.

    It was a unanimous vote to stop Chan from doing any work with the exchange and to accept his offer to cancel the deal.

    Afterwards, board members spent another hour and a half in an executive session, without the public, or employees, including Dowd.

    Chairman Steven Weeg says they then voted to hire an attorney to review the negotiations surrounding this deal.

    “Tried to figure out who knew what about when and came to the conclusion it was premature to take any significant action, we really needed a review,” said Weeg.

    We asked Weeg if Amy Dowd’s job is in jeopardy, he said it is not. 

    The board did decide Tuesday that the executive director must now get the board members’ approval for any contract for more than $15,000.

    We also asked which board members were aware of the contract and we asked about the details behind the deal.

    Weeg said those are questions he hopes are answered by an attorney’s review of what happened.

    The board did hire executive director Amy Dowd.

    The exchange says she was working for Ernst and Young in Portland before accepting the position with Your Health Idaho.

    Dowd makes $175,000 a year.

    The board is hoping the investigation is complete before their next meeting on October 30Th.


    The Times-News reports:  State Board of Education member Bill Goesling ripped into Superintendent of Public Instruction Tom Luna’s budget proposal on Thursday, calling the 5.9 percent spending increase “unacceptable.”

    Goesling said an increase in public school funding would come at the expense of Idaho’s colleges and universities.

    “I find this to be just an unacceptable increase in numbers,” Goesling said during the board’s meeting in Lewiston. “I think at some point the board is going to have stand up and say, ‘This is not going to work for higher education.’”

    Luna’s K-12 budget proposal does not factor in higher education spending, and it does not call for any cuts in any other budgets.

    Goesling suggested board members — who are appointed by Gov. Butch Otter — make a separate recommendation to the governor.

    Although he was perhaps the most vocal critic of Luna’s proposed budget, Goesling was not alone.

    “The fact is these numbers are staggering when you look at where we are going and what we are doing and who is going to be robbed in this whole spectrum of moneys,” said board member Milford Terrell. Terrell said he understands public schools and universities are both seeking a restoration of Great Recession-era budget cuts.

    The debate flared up as Luna’s Deputy Chief of Staff Jason Hancock presented an overview of the budget proposal.

    The proposal calls for a $77 million increase in public school funding. Luna built his budget around several recommendations from Otter’s Task Force For Improving Education, including a five-year proposal to reverse cuts in K-12 operational funding, and a transformation of Idaho’s teacher pay model.

    Those recommendations were backed unanimously by the 31-member task force — which included four members of the State Board, but not Goesling or Terrell.

    Although the funding debate was passionate, it may have been somewhat of an academic exercise. The State Board does not appropriate funds – that task falls to lawmakers and Otter.

    State board member Richard Westerberg – the task force’s chairman – appeared to sense the tension in the room Thursday. On at least two occasions, he jokingly asked if members could take an early break for lunch and set the discussion aside until later.

    Westerberg stood behind the task force’s work while acknowledging the “sticker shock” reaction to the budget.

    “I don’t think anyone on the board or in the room would argue that we have adequately funded K-12 education,” Westerberg said.

    Even before Thursday, the budget proposal has drawn mixed reviews.

    When Luna unveiled his proposal on Oct. 1, Sen. Steven Thayn, R-Emmett, praised Luna for incorporating the task force’s recommendation into the budget. But Thayn, who sits on the Senate’s budget-writing and education committees, added: “I don’t think we’re going to have quite that much money over the next five years to do all of this.”

    Senate Education Committee Chairman John Goedde, R-Coeur d’Alene, also applauded Luna’s attention to the task force. But Goedde told Idaho Education News the spending increase is “a stretch.”

    Some district superintendents have called for an even bigger funding increase, saying the state isn’t working quickly enough to reverse some of the steepest K-12 budget cuts in the nation.

    And last week, former Gov. Cecil Andrus said it was time for Idahoans “to put our money where our mouth is” if education is truly a top priority.


    Boise State Public Radioreports:  Some Idaho Board of Education members fear a proposed 5.9 percent funding hike for public schools in 2015 could come at the expense of universities.

    On Thursday, board member Bill Goesling of Moscow worried the $77 million increase public schools chief Tom Luna wants for K-12 schools would siphon money from colleges including the University of Idaho, Idaho State University and Boise State University.

    The Lewiston Tribune reports Goesling said university funding cut since the recession should be bolstered, since “they’re the ones that drive the economy.”

    Starting in 2009, Idaho lawmakers reduced government spending as tax revenue dropped.

    Jason Hancock, a Luna staffer, says his boss’s proposed budget was driven by recommendations from a task force formed by Gov. C.L. “Butch” Otter to help improve schools.


    Clark Corbin reports: A first-term lawmaker is taking on a long-standing and emotional educational battle: pre-kindergarten programs.

    Rep. Hy Kloc wants the state to launch a three-year pre-K pilot program, with 55 percent of the funding coming from private sources.

    Critics have said the state cannot assume and sustain funding for pre-K — and say preschoolers are best taught at home. So while Kloc is convinced pre-K is a solid educational investment, he’s also realistic about the political prospects.

    “I fully believe it will pass — eventually,” Kloc, D-Boise, said in an interview this week.

    Idaho is one of only 10 states that do not fund pre-K programs, as the Legislature has rejected numerous pre-K proposals. Pre-K supporters perhaps came closest in 2007. The Senate passed a strictly voluntary pre-K bill — districts could decide whether or not to offer locally funded programs, and parents could decide whether or not to enroll their children. But the bipartisan proposal never made it out of the House Education Committee.

    The 2007 bill did not commit any state dollars, which may or may not be the case with Kloc’s proposal. Kloc said he hasn’t decided whether the state or districts should fund the public end of a pilot program. However, he is adamant that a commitment of private funding would have to come first, and that the preschool pilots would be voluntary.

    Kloc is proposing a three-year pilot, so Idaho can gather its own evidence about the effectiveness of pre-K. Kloc says he is convinced by the “mountains” of national studies — which suggest that pre-K prepares children for school, academically and socially, and boosts students’ chances of success later in life. However, he also believes Idaho research will help build support for an Idaho pre-K program.

    Like Kloc, LeAnn Simmons believes there is “plenty of evidence” supporting pre-K. But Simmons — the executive director of Idaho Voices for Children, a Boise-based nonprofit advocacy group — also sees the value of piloting programs in Idaho. Kloc has discussed his legislation with Simmons, but the group has taken no formal position.

    Simmons likes the private-public partnership component of the bill. Even before the recession, when Idaho imposed some of the steepest per-pupil funding cuts in the nation, some lawmakers worried about “watering down” the state’s education funding, she said.

    Historically, business groups have been among the state’s most vocal supporters of pre-K. But one lobbying group, Idaho Business for Education, is taking a wait-and-see approach to Kloc’s bill.

    “I don’t think this is the time,” said IBE President and CEO Rod Gramer, who also has been briefed on the proposal.


    Clark Corbin reports:  Former Gov. Cecil Andrus on Friday urged a crowd of more than 200 to continue his legacy of fighting for public schools and early childhood education.

    Cecil Andrus receives his Children’s Champion belt Friday in Boise.

    Andrus, the former U.S. secretary of the interior and a four-term Democratic governor, made his remarks after accepting the Idaho Voices for Children 2013 Children’s Champion Award.

    IVC officials honored Andrus for establishing public kindergarten in Idaho, increasing public school funding and fighting to make social services accessible to more children.

    “Why we are here today is because children, as we all know, are our greatest resource,” Andrus said. “We have a responsibility, we have an obligation to protect them in all manner.”

    Idaho Voices for Children is a nonprofit that works to establish policies that promote children’s health, education, safety and family and economic security. The group meets with lawmakers, researches policy initiatives and does lobbying.

    Although Andrus said his two proudest accomplishments were establishing kindergarten and seeing Meridian’s Cecil D. Andrus Elementary School named after him, he said his work is far from complete.

    He urged IVC members to fight for higher literacy rates among third-graders. He also backed early childhood education, promising Idahoans could decrease corrections spending and prison populations within two generations if early childhood education was funded and made a priority.

    “As I sat here a while ago I heard … ‘education is our highest priority,’” Andrus said. “ If education is our highest priority, then we have to put our money where our mouth is.”

    Officials gave Andrus a mock boxing championship belt, which they said he earned as the 2013 Children’s Champion.

    The gift proved appropriate because Andrus came out swinging during his 25-minute acceptance speech. While Andrus called himself  “a lumberjack and a political accident,” he also threw some jabs at legislators. “I’m going to offend a few of the legislators here, and I really don’t care.”

    His biggest gripe was that lawmakers undercut the revenue forecast from longtime state chief economist Michael Ferguson, and passed tax cuts before restoring education budgets that were cut during the Great Recession.

    He also lobbed punches at members of both political parties in Congress, Gov. Butch Otter and Superintendent of Public Instruction Tom Luna.

    Guests who crammed into a second-floor ballroom at the Grove Hotel gave Andrus a sustained standing ovation – both before and after his speech. Andrus dedicated his award to his supporters, IVC members and everyone who ever fought for education in Idaho.


    Michael Ferguson opines:  Kudos to Governor Otter for his courageous embrace of his education task force’s recommendations. With an estimated price tag of approximately $350 million, those recommendations will go a long way toward restoring cuts that have been made to Idaho’s public schools over the past decade and a half.

    During the 1970s, 80s and 90s, Idaho spent approximately 4.4 percent of Idahoan’s total personal income each year on public schools. The yearly numbers varied a bit (ranging between 4.2-4.7 percent), but the overall funding trend was remarkably steady. However, since 2000, the level of funding for Idaho public schools (as a share of our total personal income) has fallen steadily from 4.4 percent to a new low of 3.5 percent in the fiscal year 2014 public school budget. That’s a 20 percent reduction.

    To see the dollar magnitude of this reduced funding effort consider that in 2013 Idaho’s total personal income is estimated to be $55 billion. The nine-tenths of a percentage point reduction is equivalent to $495 million in 2013 terms. That’s right, if Idaho was spending the same share of its personal income on public schools today as it did in the three decades preceding the millennium, those schools would receive almost one-half billion dollars more in funding than they actually do today.

    So the task force’s recommendations (now embraced by the governor) would re-store about two-thirds of the public school funding that has been cut since 2000. And as the governor points out, it may not be possible to fulfill the task force’s recommendations in one year, or even two, but it should be possible to implement them in four or five years. That’s not an unreasonable time frame considering the loss of funding took place over more than a dozen years.

    Now that the governor has clearly and unequivocally embraced restoring a signify-cant amount of public school funding, he needs to produce a clear roadmap showing how he intends to achieve that outcome. He needs to produce a long-range Idaho budget scenario that shows the public realistic projections of not only public school spending over the next five years, but all major categories of state spending — such as higher education, health and human services, adult and juvenile corrections, and all the rest of state government programs.

    Why does a complete long-range budget projection need to be produced? Quite simply, it’s the only way we’ll know if the governor is serious in his commitment to his task force’s recommendations. A complete budget projection will reveal the likely path of other important elements of Idaho’s budget. For example, health care related expenses are changing significantly as a result of Obamacare, and corrections related expenses are being impacted by judicial rulings, incarceration rates, etc.

    Revenue forecasts must be extended as well, to show whether Idaho’s current revenue structure can meet the demands associated with providing a complete spectrum of public services, including the education enhancements the governor now embraces. Only by presenting a credible, complete budget scenario covering the full period of the phase-in will the public be in a position to assess the veracity of the governor’s commitment to Idaho’s public schools.

    As an added bonus, Idaho is long overdue to extend its budgeting time horizon be-yond a single year. Lack of long-range budget planning in general is considered a weakness in any state’s fiscal management practices. Idaho has increasingly adopted policies that either delay or phase-in major policy initiatives, and without a sufficient time horizon it is difficult, if not impossible, to fully assess the consequences of delayed or phased-in implementations.

    Michael Ferguson is the director of the Idaho Center for Fiscal Policy. He previously served as chief economist for the last six governors of Idaho.


    Betsy Russell reports:  Idaho’s state tax revenue surged nearly $16 million ahead of forecasts in September, beating the forecasted level by 6.4 percent. The extra revenue was enough to more than offset shortfalls compared to forecasts for the past two months, putting the state 1.6 percent ahead of forecasted revenue for the fiscal year to date.

    Nearly every revenue category beat its projection in September. Individual income tax receipts were 11.3 percent ahead; corporate taxes were 5.5 percent over forecasts; and sales taxes beat forecasts by 3.2 percent. You can see the state’s full general fund revenue report here for the month.

    Gov. Butch Otter touted the news when he addressed the Idaho Licensed Beverage Association annual convention today, drawing some appreciative whistles after he said, “We were off about $16 million – we brought in $16 million more than we thought we would.” He noted that income taxes were a big driver of that, even though Idaho lowered its top rates for both individual and corporate income taxes two years ago. Otter said the news “validates our belief … that lowering taxes encourages more economic activity.”

    He told the liquor purveyors that just as “you’ve seen people try to drink themselves sober,” he doesn’t buy economic theories that say “the government can spend themselves rich,” and defended tax cuts Idaho’s granted the past two straight years, cutting into state revenues despite tough economic times and forcing “some tough decisions.” Said Otter, “In the long run, it paid off because we really created a climate for growth.”


    The Press-Tribune opines:  When the Great Recession hit in 2007, Idaho lawmakers made significant cuts to state spending on public schools. But legislators promised that, when things got better, restoring that funding would be top priority.

    Now Idaho Schools Superintendent Tom Luna isn’t being bashful about taking them up on that promise. While his request for a nearly 6 percent spending increase for 2014-2015 may be a bit on the overly optimistic side, you have to appreciate his push to increase pay for hard-working teachers, and given the economy, he should get at least some of what he’s asking for.

    When the economy tanked five years ago, it didn’t mess around. Despite the fact that Idaho had some rainy-day funds to cushion the blow and the state also got some extra education money from the controversial American Recovery and Reinvestment Act (also known as “The Stimulus”), Idaho cut $82.5 million from the schools budget since 2007. According to a study released by the Center on Budget Policy Priorities and published by Idaho Education News:

    n Idaho’s per-pupil spending has fallen almost 16 percent since 2007. Only four states made deeper cuts: Oklahoma, Alabama, Arizona and Kansas.

    n Idaho is spending $930 less per student than it did in 2007.

    We are far from being alone when it comes to cutting education spending. At least 34 other states also have. And while the Gem State finally reversed the trend of cuts with an increase of $28.6 million this year, that extra money essentially maintained pace with growth in enrollment and inflation.

    Luna is far more ambitious now. He’s calling for a $77 million increase in public school funding next year, which would bring the tally from $1.308 billion this year to about $1.4 billion.

    His proposal closely mirrors the details recommended by Gov. Butch Otter’s Task Force for Improving Education — a five-year phased plan that ties significant increases in teacher pay to performance and accountability. If the plan is fully phased in, starting teacher pay would increase from its current $31,000 to $40,000 per year in six years. Veteran teachers could be boosted to tiers of $50,000 and $60,000.

    The price tag for the teacher compensation increases alone would exceed $250 million in six years. Also included in Luna’s proposed budget are $5 million for the dual credit program for high school students, $12.2 million for professional development and $2.75 million for the development of school safety programs. Another $16.5 million would go to partially restore the $82.5 million cut from the budget.

    The state’s economy has improved, but to say it’s back to pre-recession levels is optimistic at best. The federal government shutdown and showdown over the spiraling national debt have employers and investors nervous, and the effects of the Affordable Care Act (Obamacare) hover over the nation as a  huge, undetermined X-factor.

    When asked whether he thought a traditionally conservative Legislature would sign on to such a spending increase in these times, despite the fact that the state’s overall economy has steadily improved, Luna said he did. He said the fact that the teacher raises would be tied to their performance would make it a palatable sell to lawmakers.

    So far the reaction from Otter and key budget writers has been fairly positive. January is still a few months away, although preliminary discussions on budget setting often begin before that, which is why it was wise for Luna to release his proposal early.

    There’s a good chance conservative, cautious lawmakers won’t give the state’s public schools chief all he’s asking for. But odds are he’ll probably get at least some of it.  And you can’t fault him for asking. For all the work they do, good, productive teachers deserve more than $31,000 a year.

    Despite the bluster from some union representatives who tried to portray him as a “teacher hater” who relished the opportunity to cut educator pay and give Idaho kids the shaft, Luna has always been serious about giving teachers bigger paychecks to lure and keep good ones here in Idaho. And given a stronger state economy and backing from the governor’s education task force, that may finally be possible. At least to some extent.


    The Standard Journal reports:  Idaho Superintendent of Public Schools Tom Luna is asking for a budget increase of $77 million next year to help restore funding to pay for school operations and give teachers a pay raise.

    Luna is also proposing as part of his 2014-15 budget a plan to help high school juniors and seniors pay for dual-credit classes that help earn college credit before graduation.


    Luna on Tuesday unveiled details of his proposed $1.37 billion budget, which calls for a 5.9 percent hike compared to the current fiscal year, making it the highest percentage point increase since 2008.

    Of the $77 million in new money, Luna’s budget recommends diverting $16.5 million into classrooms and operations to help offset more than $82 million in cuts made during the recent economic downturn.

    The budget also proposes $42.5 million for boosting teacher salaries as part of a career ladder that would reward teachers for improving student performance, classroom management and educational leadership. The proposal would eliminate paying teachers based on length of service or additional education, and the total cost of the program over six years would be $250 million.

    Luna said his budget closely reflects guidance provided earlier this year by the education task force created by Gov. C.L. “Butch” Otter.

    In August, the Task Force for Improving Education produced 20 recommendations, including improving teacher compensation and requiring students to show mastery in a subject before moving onto another one.

    Luna, a member of the task force, said money isn’t the only solution to putting the recommendations into place. Stakeholders also need to discuss changes to the education system that don’t have large price tags.

    “This whole package needs to be implemented,” he said. “This isn’t a buffet.”

    Read more: http://www.rexburgstandardjournal.com/news/luna-asks-for-nearly-percent-funding-increase/article_f8ce22f0-2c55-11e3-803f-001a4bcf887a.html#ixzz2igmZ6SrH


    Wayne Hammon opines:  A strong construction industry fuels a healthy economy, providing high-paying jobs and promising career options for young people.

    Well-paid workers spend money on homes, furniture, cars, and services – just about everything. This “multiplier effect” further advances the economy and lifts everybody.

    Good construction jobs are available right here in Idaho, and our construction industry needs workers – qualified, well-educated workers.

    But the days when a strong back or skill with a hammer was good enough to land one of these jobs are long gone. Today we need men and women who can fit into a complex, technologically advanced process that delivers a quality product on time and on budget.

    As executive director of the Idaho Associated General Contractors, I hear a common complaint from construction companies across the state: “We’re spending too much time and money teaching new hires basic skills they should have learned by now.”

    Too often new employees are good, hard workers but lack important skills like reading, writing, math or even balancing a checkbook. They struggle with critical thinking skills, good communication and working in teams – all things they should have learned in high school.

    In the debate over how to improve Idaho’s schools, it’s important to remember that this is not just about getting more students to college (although that has its place in the construction industry, too). A good K-12 education means preparing every graduate for success in the workplace – whatever career path he or she may choose.

    Obviously, the construction industry needs to provide training through a variety of avenues, from on-the-job training to collaborating with two- or four-year colleges. What is frustrating is the need to first provide remedial education to new hires.

    By now we have all heard the statistics – that the U.S. is slipping compared to other industrial nations and that Idaho scores poorly on a variety of national measures of K-12 education.

    Most people accept that we need to do better. But what is the solution? Unfortunately, there are no easy answers. Many well-informed and well-intentioned people have differing opinions, but we can agree that we have a problem and need to find solutions.

    The Idaho AGC supports the “Don’t Fail Idaho” campaign, a statewide effort to unite all stakeholders in a productive conversation on our education opportunities and challenges.

    The construction industry is committed to doing its part. We’ll spend the time, money and effort to train our workforce. That’s a sound investment. But we need an education system that delivers young men and women with a high school education that has prepared them for success in life.

    As Idaho tackles this problem, it’s important to remember that education reform is not a liberal or conservative issue; it affects everybody. K-12 education produces the foundation for all that we do. High school is certainly not the end of education – if anything, it is just the beginning of a lifelong process of learning – but it is a critical base upon which future success is built. Students who graduate unprepared run the risk of never catching up.

    If our young people fail, if our educational system fails, then we all fail. Everyone has a stake in this issue, and everyone should be on the side of success. The answers may not be easy, but if we as a state and society take determined action, then we can succeed.

    Read more: http://idahobusinessreview.com/2013/10/03/construction-workers-wanted-quality-education-required/#ixzz2igldfOCO


    The Press Tribune reports:  Superintendent of Public Instruction Tom Luna today called for a $77 million increase in public school funding in 2014-15 – with more than half of the new spending tied to teacher pay.

    This bump would represent a 5.9 percent general fund spending increase, bringing the public schools budget from $1.308 billion this year to nearly $1.4 billion.

    The proposal calls for putting $42.5 million into a career ladder teacher pay plan, recommended earlier this year by Gov. Butch Otter’s Task Force for Improving Education. This would begin a five-year phased process to dramatically transform teacher pay, by using a licensure system and tying incentives and rewards to an accountability system.

    If the plan were fully phased in, starting teachers would earn $40,000 per year in six years, up from the current state minimum of $31,000. Tiers of $50,000 and $60,000 would also be established. Luna said the pay system could go a long way to attracting and retaining the best and brightest.

    “We’ll be spending about $250 million more on teacher compensation in six years,” Luna said. “For seven years or more, I’ve made it clear we have to find a way to pay teachers better, and the only way is to move away from the salary grid where teacher pay is based only on how long they’ve taught and their education.”

    Luna also called for an advisory committee to craft the details of the career ladder and the implementation.

    “It’s critical we find success in agreeing on what tiered-licensure will look like if we are going to have a successful rollout,” Luna said.

    His proposal also begins addressing another key task force recommendation – restoring school operational budgets, also known as “discretionary” funding.

    Luna would set aside $16.5 million to begin reversing about $82 million in recession-era cuts. The $16.5 million would increase per classroom operational spending from $20,000 this year to $21,140 next year. Per classroom spending peaked at $25,696 in 2008-09, and Luna’s plan would restore that money over five years.

    Luna delayed submitting his initial budget for 30 days in order to build it around some of the task force’s recommendations. In an interview with Idaho Education News, he said its up to task force members and those who support the recommendations to continue to champion the ideas.

    “It seems like the wheels start falling off when it comes to two areas – implementation and/or the revenue necessary to implement the recommendations,” Luna said. “The same people involved in making the task force successful need to stay involved and continue to be persistent until the recommendation are implemented.”

    The proposed budget does not identify a source for the new $77 million, but Luna has ideas. He suggested the state begin collecting taxes on Internet sales, an issue that the Legislature so far has declined to move on and which may require additional congressional approval.

    Luna called for recalibrating state endowment lands payments to focus on current beneficiaries, including public schools. He also suggested taking advantage of natural resources from state lands, like officials in Wyoming and other states have.

    “We have 90 days to work together (now), then another 90 days once the Legislature comes to town,” Luna said. “I’ve got to believe in that time frame we can find a solution to this.”

    During a speech in front of the Meridian Chamber of Commerce on Tuesday, Luna estimated the cost of implementing the task force’s recommendations could range between $350 million and $400 million over six years.

    Sen. Steven Thayn, R-Emmett, was in the audience and voiced support for the direction Luna is taking.

    “I think he’s doing the right thing as far as trying to implement the task force’s recommendations,” Thayn said.

    But Thayn, who holds key seats on the Senate’s budget-writing and education committees, said finding $400 million in new funding may be a stumbling block.

    “There’s going to be some competing budgets like the Department of Correction and also medical costs,” Thayn said. “What we need to do is come up with a way to do all of this being a little more efficient because I don’t think we’re going to have quite that much money over the next five years to do all of this.”

    Luna’s initial budget represents just the first step in a lengthy process. In January, Otter will submit his own proposal. Then, the Legislature’s Joint Finance-Appropriations Committee will spend about 90 days writing budgets for every state agency and program.

    After that, the JFAC budget will go to the entire Legislature for a vote, and then return to Otter for final approval.


    East Idaho News reports:  As next year’s election looms, State Superintendent Tom Luna is pushing for more education funding. On Tuesday, Luna unveiled a $1.37 billion budget for the 2014-2015 school year, which would amount to about a 5.9 percent increase over this year. If approved, the budget would be the biggest the state has seen since 2009. According to the National Education Association, Idaho is second only to Utah in states with the lowest average amount of taxpayer money spent per pupil in the entire country.


    Bill Roberts reports:  State schools chief Tom Luna stuck close to the education reform road map laid out by a statewide task force as he made public his 2014-2015 budget Tuesday, seeking a career ladder for teachers and restoring dollars districts lost during the recession.

    Luna also proposes helping juniors and seniors pay for dual-credit classes that could earn them college credit before graduation, and beefing up professional development for teachers as Idaho Core Standards make their way into classrooms around the state this year.

    Luna proposed a $1.37 billion budget, up 5.9 percent from this year. It would be the highest percentage-point increase since 2008 and the largest dollar amount spent on public education since 2009.

    In August, Gov. Butch Otter’s Task Force for Improving Education produced 20 recommendations such as improving teacher compensation and requiring students to show mastery in a subject before moving onto another one.

    Luna, a member of the task force, said money isn’t the only solution to putting the recommendations into place. Stakeholders also need to discuss changes to the education system that don’t have large price tags.

    “This whole package needs to be implemented,” he said. “This isn’t a buffet.”

    Luna’s education budget isn’t the only one lawmakers will consider when they meet in January. Otter will also present a budget, with his vision of how taxpayer money should be spent.

    Luna said he did not review his newest budget with the governor. But Otter has endorsed the task force’s recommendations.

    Other Luna budget highlights:

    Career ladder: $42.2 million for a down payment on boosting teacher salaries as part of a career ladder that would reward teachers for improving student performance, classroom management and educational leadership. It would eliminate paying teachers based on length of service or additional education. Total cost of putting a career ladder in place could be $250 million over six years, including raising beginning teacher salaries from $31,000 to $40,000. Luna, following task force recommendations, proposes to increase beginning salaries for 2014-2015 to $33,000. Details of a career ladder have not been worked out yet.

    Restoring revenue: $16.5 million for the first installment of replacing the $82.5 million districts lost during the recession. Luna says the money, which is used to keep school doors open, pay the electric bills and pay district health insurance premiums, would not come with any additional restrictions.

    Getting a jump on college: Giving high school juniors up to $200 and seniors up to $400 to apply toward the cost of taking college level courses while in high school. The proposal is based on a bill state Sen. Steven Thayn, R- Emmett, expects to introduce in the 2014 session. The proposal would increase funding to help pay for dual credit by $5 million.

    Teacher education: $12.2 million to help with teacher professional development, up $8.4 million from this year. “I can’t say enough about professional development,” Luna said. “That $12.2 million is ongoing. I would anticipate it would go up.”

    Read more here: http://www.idahostatesman.com/2013/10/01/2792395/luna-sticks-close-to-education.html#storylink=cpy



    Rocky Barker reports:  Because of the federal government shutdown, all of the Fish and Wildlife Service’s Idaho offices will be unable to provide support to the public, contractors, state and local agencies, and nongovernmental organizations.

    But a team of U.S. Army Corps of Engineers technical experts are on the ground in Idaho today to help state and local governments put together a request for funding to prevent flooding and landslides after the Elk, Pony and Beaver Creek wildfires. They were out in Elmore and Blaine counties today because their project funding is from the 2013 fiscal budget, not the 2014 budget that begins today, said Gina Baltrusch, a Corps spokeswoman in Walla Walla.

    “The shutdown isn’t going to affect those dollars,” Baltrusch said.

    She was going down a list of tasks to carry out an “orderly shutdown” before she goes on furlough, when she will have to leave her Blackberry behind and end contact with the media and public.

    Calls to several federal public information officers were not picked up early Tuesday, but most agencies are keeping at least one spokesman around.

    National parks and national monuments are closed, but national forests are open, without services. But if a fire starts it will be put out.

    The Bureau of Reclamation will operate its dams, and other essential services will continue.

    The Deer Flat National Wildlife Refuge’s Lake Lowell and Snake River Islands units are closed. That also bars access to fishing and upland game, waterfowl and deer hunting there.

    For programs experiencing a lapse in appropriated funding, only limited functions would continue, such as those necessary to respond to emergencies and to protect human life or property, the Fish and Wildlife Service said in its release. Fish and wildlife management activities, public programs, meetings, hearings and events will also be cancelled.

    Included in her orderly shutdown, Baltrusch was updating her passwords because they automatically end every 60 days. She’s not sure how long she will be gone or when her passwords expire.


    Julie Wootton reports: Budgets, legislative ideas and proposed changes to a rule about gun-free schools were among items addressed yesterday by the Idaho Board of Education.

    The board oversees public K-12 schools and institutions of higher education, and its meeting here drew dozens of college and university administrators from around the state.

    After a work session Wednesday, the board met yesterday at the College of Southern Idaho’s Herrett Center for Arts and Sciences to tackle an agenda with more than 50 items.

    Highlights included:

    Common Core State Standards

    State Schools Superintendent Tom Luna updated the board on preparing teachers for the transition to Common Core State Standards.

    The standards will be taught for the first time in Idaho during the upcoming school year.

    While the standards have broad support, he said, “there’s the obvious concerns about making sure resources are available.”

    The state will spend $21.9 million during the next fiscal year on professional development of teachers.

    “The vast majority of that distribution will go directly to (school) districts,” Luna said.

    Getting ahead with Credits in Middle School

    The board unanimously approved a rule change that clarifies language about graduation requirements.

    The Department of Education has programs so students can accelerate their coursework. Language changes make it clear that middle schoolers can take high school courses for full credit.

    Gun-free Schools

    School security long has been an issue, but it gained momentum after the December shooting of 20 first-graders and six educators at a Newtown, Conn., elementary school.

    Idaho Code gives local school boards the option of allowing select employees to carry a gun on campus. The rule language now is being changed, however, to clarify that students cannot be authorized to bring firearms to school.

    Board member Milford Terrell said some school districts — not necessarily in Idaho — have armed employees, which “is perfectly legitimate in the type of world we live in today.”

    Terrell said he understands barring students from carrying weapons, but said teachers could save lives by being able to react.

    State Superintendent of Public Instruction Tom Luna said the current policy has been in place for years and won’t be changed except to clarify the ban on students’ firearms at school.

    Idaho Public Charter School Commission

    Under one agenda item, the board considered 10 legislative ideas for the 2014 session.

    Seven were approved and three were dropped. Those were proposals to make the Idaho Public Charter School Commission a self-governing agency, as well as other proposals from the University of Idaho and from Idaho State University.

    Currently, The charter school commission now is governed by the state board, and board member Richard Westerberg opposed the motion to make the commission independent and in charge of its own budget and personnel.

    Before the vote, Westerberg told the Times-News that the board wants to avoid a perceived conflict of interest, as it hears the appeals from schools authorized by the charter school commission.

    College of Southern Idaho Progress Report

    CSI officials reported on a number of topics, including the college’s eight-county service area, remediation rates, dairy training and training partnership with the Chobani yogurt giant.

    Idaho Opportunity Scholarship

    The board unanimously approved changes to the Idaho Opportunity Scholarship, increasing minimum GPA requirements to 3.0 to qualify for the $3,000 annual stipend for full-time students, said Tracie Bent, the board’s chief planning and policy officer.

    New Programs

    Board members unanimously approved a new graduate certificate for a mathematics consulting teacher endorsement at Boise State University and an aerospace composite technology program for North Idaho College, which received a $2.97 million grant for the program. The board gave conditional approval for an online teaching endorsement program for Idaho State University. After the first group of students completes it, the program may gain full approval.

    Teach for America

    The board approved Teach for America as a state-approved teacher preparation program in Idaho.

    That move will give rural districts a greater ability to find teachers for hard-to-fill positions.

    Teach for America will work with rural, high-poverty school districts, said Nicole Brisbane, managing director of new site development for the program.


    Nick Groff reports: Theories range as to why, but numbers show 20-somethings are leaving the Gem State.

    State driver’s license data shows the trend started in 2011, and while the number is relatively small in a population of almost 1.6 million, it is the first time the state has seen a decrease in that age group.

    Michael Ferguson, director of the Idaho Center for Fiscal Policy, said since the onset of the economic recession, Idaho’s economy has underperformed compared to the rest of the country. The lack of performance could contribute to the leave, he said.

    “What it really comes down to, I think, is two things: Better opportunities elsewhere, and that age group tends to be more footloose,” Ferguson said.

    On the other side of the coin, the highest in-migration group is those 60 years and older, making for an older average age in Idaho.

    Bob Fick, the communications manager at the Idaho Department of Labor, said young people are often the ones that have the initiative, inventiveness and creativity a state should want working in the economy as their lives progress.

    But because the driver’s license data doesn’t track levels of education or other demographics, it’s hard to determine exactly why Millennials are leaving. Still though, Fick said the departure decreases the work force.

    Michael Ferguson, director of the Idaho Center for Fiscal Policy, said a possible reason could be higher minimum wage in neighboring states like Washington and Oregon, at $9.19 and $8.95 respectively. While the cost of living is lower in Idaho than in Washington and Oregon, according to data released by the Bureau of Economic Analysis June 12, the minimum wage gap does not equal the cost of living difference.

    “Basically Washington’s minimum wage is 27 percent higher than Idaho’s,” Ferguson said. “In order for it to be a wash, your living expenses would have to be 27 percent higher in Washington for it to not make a difference — that’s a pretty substantial increase.”

    Ferguson said young people especially are able to move where they can better their lives, even in the short term.

    “Humans are self-interested beings,” he said. “Evidence suggests that people are footloose and vote with their feet,” and if an opportunity arises, young people are willing and able to travel.



    Funding to higher education hasn’t been cut as much as the burden to pay for it has been shifted from the tax payer to student, Ferguson said. That shift makes it more difficult for students to pay for education. If young people can’t pay for college, the work force will be less-educated.

    A theory thought to play a factor in the out-migration of 20-somethings is the Idaho job market.

    Ferguson said a slight uptick in companies like call centers moving to Idaho changes the type of job available for a Millennial. Those jobs, he said, likely pay less, especially in Idaho — the urge to cross state lines becomes more pressing.

    The job market shift is at least an indirect result of a less-educated work force.

    “Fewer students able to get through college and get a post-secondary degree,” Ferguson said, “ … means you’ve got a less qualified work force and employers look at those things.”

    Marilyn Whitney, spokeswoman for the Idaho State Board of Education, said the board set a goal to get 60 percent of Idaho’s population to obtain some sort of post-secondary degree or certificate. Thirty-five percent of Idahoans between 25 and 34 hold an associate’s degree or higher, according to the U.S. Census Bureau. The national average is 40.1 percent.

    “That equals employment and earning power,” which might keep people in the state, Whitney said. “We want students more educated wherever they live, but we want to keep the best and brightest in this state.”

    It’s a self-fulfilling prophecy, she said, but an educated work force drives an economy and attracts knowledge-based jobs.

    “The education side has a broader bearing in terms of the kinds of businesses that are willing to locate here,” Ferguson said. “Then that in turn determines the jobs that are available, and that then can lead to migration affects we’re seeing.”



    More than 40 years ago the University of Washington School of Medicine WAMI (Washington, Alaska, Montana, Idaho) Program was created.

    The main goals were to create a publicly funded medical school and to increase the number of primary care physicians in the region and rural areas.

    The program, which became WWAMI in 1996 with the addition of Wyoming, admits 20 students from Idaho each year. Idaho students complete one year of medical school curriculum at the University of Idaho, transfer to UW in Seattle their second year and then complete two years of clinical rotations, oftentimes in their home state. The state pays the cost of out-of-state fees so Idaho students can attend public medical school at the in-state price.

    “A lot of times students end up remaining where they are trained,” Mary Barinaga, the Assistant Dean for Regional Affairs with the University of Washington School of Medicine, said. “If you train students in the community setting, where you hope they will someday return to practice, train them in the communities in Idaho, then they’ll have a higher chance of returning.”

    The Idaho Legislature increased funding to admit 25 students to the program for next year.

    Barinaga said the return rate of students to Idaho is 50 percent — 9 percent higher than the national average — and has a 73 percent return on investment because a number of surrounding states’ graduates practice in Idaho.

    Barinaga said there are four residency programs in Idaho, with funding for another residency opening in Coeur d’Alene. She said the reason the return rate isn’t higher is because Idaho does not have residencies in general surgery, OB/GYN or pediatrics, among other specialties. Federal funding for the programs have been slashed throughout the years, leaving Idaho without.



    The federal Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue with the teacher profession.

    If an educator teaches full-time for five complete and consecutive years, an eligible teacher’s student loans of up to $17,500 can be forgiven. In order to qualify for the program, the teacher must work in a Title I-funded or low-income school.

    Of the 755 public schools in Idaho, 591 were classified as low-income in 2012-13.

    For more information about the program and qualifications, visit


    Betsy Russell reports: Idaho lawmakers are unhappy that the state’s schools superintendent has resisted moves to add more school counselors.

    More counselors equals more students continuing their education at colleges or trade schools, they say.

    Increasing Idaho’s dismal percentage of students pursuing higher education is the state Board of Education’s top priority. The goal is that 60 percent of Idahoans ages 25-34 will have a post-secondary degree or certificate by 2020.

    The 2010 census showed 35 percent.

    “We sure have to watch that,” said Rep. Shirley Ringo, D-Moscow, who chairs the joint legislative committee that received a report on the issue Wednesday. “I think it’s a big obstacle to having our economy improve.”

    In 2010-11, Idaho had 489 students for every school counselor, above the national average of 471 and nearly twice the recommended national standard of 250 – which only three states meet. Washington’s student-to-counselor ratio is even higher, at 510.

    The recommendations to trim Idaho’s student-to-counselor ratio and add a statewide coordinator for all K-12 school counselors were made in a report from the Legislature’s Office of Performance Evaluations in 2012. They were part of an array of moves aimed at encouraging more Idaho students to go on to further education after high school. But state schools Superintendent Tom Luna rejected both recommendations.

    “The responsibility for a college-going culture should be all educators in a school, not focused on one person,” Luna wrote in a response to the report, delivered to lawmakers along with a follow-up report Wednesday. “While counselors provide excellent service, it would be difficult to add enough employees to make this recommendation meaningful at this time.”

    He cited an Idaho school district where every Friday, “the teachers and staff members proudly sport a T-shirt or sweatshirt from their alma mater,” launching conversations with students about the value of higher education. “This is just one example I have seen that could easily be duplicated across the state and that ensures every staff member is involved in the success of students after high school – not just the school counselor.”

    Sen. Dean Mortimer, R-Idaho Falls, took issue with Luna’s response. “I’m concerned,” he said. “I think we have to look at our counselors and their roles – I believe they may be doing too much (on) administrative issues, and not enough counseling. … It’s a critical portion of getting our students to go on.”

    Luci Willits, Luna’s chief of staff, said Wednesday that Luna stands by his response. “The superintendent would prefer to pay existing educators increased salaries, (rather) than spread the already decreased pie from the recession even more.”

    The state board, in its response to the legislative report, suggested the Legislature would need to identify a new source of funding if it wants schools to add more counselors; schools, instead, have been cutting staff due to budget cuts.

    Mortimer, who is vice chairman of the Senate Education Committee and also serves on the joint budget committee, said, “Something needs to change, for sure.”


    Emilie Ritter Saunders reports: Gov. C.L. “Butch” Otter is spending part of his week in Coeur d’Alene at Idaho’s largest business lobby’s annual convention. Gov. Otter’s spokesman says one of the administration’s main goals for the next legislative session is to pass a third-consecutive year of tax cuts.

    In 2012, the Legislature lowered corporate and individual income tax rates for the wealthiest Idahoans. In 2013, the Legislature overhauled the state’s business personal property tax,exempting the tax for 90 percent of Idaho businesses. As for 2014, Gov. Otter’s spokesman Mark Warbis says a tax cut could go several ways.


    In April, Otter wrote to lawmakers that their newly-minted personal property tax exemption for most Idaho businesses was just a start. AsStateImpact reported yesterday, Rep. George Eskridge (R-Dover) isn’t convinced lawmakers should fully repeal the business equipment tax, though he’s sure the discussion will happen.

    Warbis says the administration is also considering a further reduction to corporate and individual income tax rates. With the 2012 law change, the top individual income tax and corporate income tax rates are now 7.4 percent.

    The Otter administration is also looking at further economic development incentives through tax rebates for businesses.

    Warbis says Idaho was a finalist among four other states last winter to lure a company to relocate to the Gem State, bringing with it high-paying tech jobs. As the Coeur d’Alene Press reports, Idaho wasn’t able to offer the multimillion dollar incentive packages the other states could. Warbis says the company — which will remain unnamed due to a confidentiality agreement — chose not to relocate for “internal reasons.”

    Warbis describes the business as a “significant global company” that would fit well with industries that are on the rise in Idaho. It could still relocate in the future. At which point, Warbis says, “we hope to hear from them when they’re ready to grow.”


    Emilie Ritter Saunders reports: Idaho lawmakers have a new tool available to guide them in making tax policy decisions.

    The Legislature’s Office of Performance Evaluations presented a 38-page report to the Joint Legislative Oversight Committee this morning. The study, a Guide to Comparing Business Tax Policies, was requested by the 2012 Legislature.

    The report focuses on a couple of main ideas; tax rates are not the only thing (or most important thing) businesses consider when looking to expand or relocate in Idaho, and tax rate changes aren’t directly related to business investment.

    “Although businesses generally seek to maximize their after-tax rate of return, the link between tax costs and a favorable business environment is not direct. For example, businesses rely on tax-funded government services, such as infrastructure development, education, and workforce training. When these tax-funded government services and other nontax factors are weak, they often become more substantial barriers to achieving policymakers’ goals than unfavorable tax rates. Consequently, policymakers must balance the cost of lowering business taxes to incentivize investment while simultaneously adequately funding services that are also valued by businesses.” — Office of Performance Evaluation

    The report encourages lawmakers to consider the same non-tax factors businesses take into account when shaping tax policy.

    “The effects of tax rate and policy changes cannot be understood or predicted in isolation from nontax factors. Many interrelated factors determine whether a given state is an attractive place for businesses to invest. Economic performance and business investment hinge on the balance of many, often competing, tax and nontax factors.” – Office of Performance Evaluation

    • Availability of a trained workforce
    • Climate and amenities
    • Education
    • Infrastructure
    • Labor costs
    • Location-specific profits (before tax considerations
    • Market size
    • Proximity to waterways
    • Purchasing power (business cost of living)

    The Office of Performance Evaluation also came up with an interactive tool that allows lawmakers to compare Idaho’s tax rates with other states, and understand what happens to revenue streams if tax rates are changed.

    Over the last decade, Idaho lawmakers have approved several sweeping tax policy changes. In  the last two years, lawmakers cut the top tax rates for businesses and individuals, they approved new business tax exemptions, and this year legislatorseliminated the business personal property tax for the vast majority of Idaho companies.

    Lawmakers will likely consider more tax policy changes next year, as Gov. C.L. “Butch” Otter wants to oversee three-straight years of tax cuts.


    Betsy Russell reports: Idaho lawmakers are unhappy that the state’s schools superintendent has resisted moves to add more school counselors to help boost the number of students going on to higher education.

    In 2010-2011, Idaho had 489 students for every counselor, above the national average of 471 and nearly twice the recommended national standard of 250 – which only three states meet. Washington’s student-to-counselor ratio is even higher, at 510.

    The recommendations to trim Idaho’s student-to-counselor ratio and add a statewide coordinator for all K-12 school counselors were made in a report from the Legislature’s Office of Performance Evaluations in 2012 as part of an array of moves aimed at encouraging more Idaho kids to go on to further education after high school. But state schools Superintendent Tom Luna rejected both school-counselor recommendations.

    “The responsibility for a college-going culture should be all educators in a school, not focused on one person,” Luna wrote in a response to the report, delivered to lawmakers along with a follow-up report Wednesday. “While counselors provide excellent service, it would be difficult to add enough employees to make this recommendation meaningful at this time.”

    He cited an Idaho school district where every Friday, “the teachers and staff members proudly sport a T-shirt or sweatshirt from their alma mater,” saying, “This is more than just a T-shirt. It is the beginning of a conversation throughout the day, where every teacher and staff member engages students in a discussion about the importance of post-secondary education. … This is just one example I have seen that could easily be duplicated across the state and that ensures every staff member is involved in the success of students after high school – not just the school counselor.”

    Sen. Dean Mortimer, R-Idaho Falls, took issue with Luna’s response. “I’m concerned,” he said. “I think we have to look at our counselors and their roles – I believe they may be doing too much administrative issues, and not enough counseling. … It’s a critical portion of getting our students to go on.”

    The state Board of Education has set increasing Idaho’s dismally low number of students who go on to any type of higher education after high school as its top goal.

    The state board, in its response to the legislative report, wrote, “Tight budgets at the school district level may result in the reduction of personnel within the school districts. … Secondary school counselors often fall into this category. A legislative change in the school district funding formula, or a separate funding stream, would be necessary to ensure school districts have dedicated funds available to hire school counselors.”

    Mortimer, who is vice-chairman of the Senate Education Committee and also serves on the joint budget committee, said, “Something needs to change, for sure.”

    According to the most recent figures from the National Center for Education Statistics, only Wyoming, New Hampshire and Vermont fall below the recommended 250-to-1 student-to-counselor ratio.

    “In our survey of school counselors, approximately half of the respondents indicated they spent 25 percent or less of their time counseling students on college readiness and college access,” the Idaho report found. “A lower student-to-counselor ratio may assist counselors in spending more time advising students on issues such as post-secondary education and career readiness.”

    Said Rep. Shirley Ringo, D-Moscow, who chairs the Joint Legislative Oversight Committee, which received the follow-up report and responses on Wednesday, called Luna’s response “rather light-hearted given what I think is the magnitude of the problem.”

    Said Ringo, “First of all, school counselors have to deal with many issues beyond higher education counseling and career counseling, and our ratio is so terrible … just to try to deal with the everyday problems that children have I think is a huge problem.”

    The report also recommended adding a position at the state Department of Education to coordinate K-12 school counselors statewide, including coordinating training and college and career readiness efforts. Luna responded, “When we isolate the college culture to one person, it often leaves others feeling it is only that person’s responsibility.” He said if his office were to add another position, rather than one to oversee counselors, “I would suggest a coordinator who works on helping students become post-secondary ready through advanced opportunities including dual credit, Advanced Placement, or college entrance exams.”

    He added, “It would seem to me that a position focused on expanding opportunities for students, rather than focused only on communications for adults, would be a more prudent and effective use of state dollars.”

    Luci Willits, Luna’s chief of staff, said Wednesday that Luna stands by his response. She noted that the department tried unsuccessfully this year to persuade lawmakers to fund another position in the office, to oversee Indian education, that had been cut during the economic downturn; the department instead had to rely on salary savings to fund that position.

    “In terms of investing in more counselors, certainly that is an option for the state,” Willits said, “but the superintendent would prefer to pay existing educators increased salaries, than spread the already decreased pie from the recession even more.”

    The state Board of Education, since the initial report came out in January of 2012, has started a grant-funded, online counselor training program available to counselors across the state through the Idaho Digital Learning Academy. The grant lasts for two years; this year, its first year, 52 counselors enrolled in the initial round and 33 passed the course.

    “Continued use of the training resource at the end of the grant will be dependent on individual school district priorities and budget restrictions,” Tracie Bent, chief planning and policy officer for the state board, wrote in the board’s response to the legislative report.

    The follow-up report found more progress on other recommendations initially made in 2012. Those included revamping Idaho’s state college scholarships to focus limited funds more on need-based aid; legislation to do that passed this year. The state board and the Idaho Department of Labor also are working on collecting more data on scholarship recipients, tracking their progress and eventual employment, and strategizing to coordinate college-readiness efforts with the state’s workforce needs.

    Mortimer said, “We are making progress, but I would like to see a little more progress.”

    The state board’s goal is that by 2020, 60 percent of Idahoans ages 25-34 will have some type of post-secondary degree or certificate. In the 2010 Census, that figure was just 35 percent.

    Said Ringo, “We sure have to watch that. I think it’s a big obstacle to having our economy improve and being able to retain graduating students in Idaho, so I hope that we’re taking it seriously.”


    The Emmett Messenger-Index opines:  “Levy Fails” was the big headline in the Messenger Index May 29 issue. The immediate impact to the Emmett School District was planning for $1.77M reduction over our proposed budget — $500,000 of this is in major maintenance projects and the rest is in teaching and staff positions and supply budgets. Two years ago the district cut $850,000 from our budget and then went to the voters for $1M dollars to keep the district whole. These two reductions equate to just over 17 percent in two years.

    People have been saying to me, “At least we are not Nampa.” I agree in the sense their problems were created through mistakes and not planning for the many cuts all Idaho districts had to make over the past few years. However, their problem was a 9 percent shortfall and their community came out and supported two levies in one year to cover all but about 4 percent of their needs.

    During the spring of 2013, 63 school districts ran levies or bonds. Fifty-four passed with the majority receiving well over 60 percent yes votes. With this defeat, we are proposing a budget that is lower than any budget for the past 11 years.

    The question for Emmett is what type of future do we want for our students and community? There is plenty of evidence to show that the economic strength of the community is tied to the quality of the schools. Preparing our students to be ready to enter the work force or college requires that we invest in our buildings, teachers, staff and operations.

    The state has continued to underfund Idaho schools. We are the 49th out of 50 states in funding of education. Emmett’s elementary reading program is so old that we were told by the state supplier this year that they no longer carry the student materials that have to be replaced every year. The state stopped providing funding for textbooks four years ago, so we continue to push our textbook adoptions out into the future.

    Local communities across Idaho have had to step up and fill the gap to maintain their local schools. We will have to run another levy on Aug. 27 to fund ESD for this coming year. Even if the levy passes, we will be cutting over $200,000 out of our budget for next year. Year after year of staff reductions, cutting salaries, deferring maintenance and not purchasing textbooks is harming the quality of education we can offer. So, what future do we want for our students and their education in Gem County?


    Emilie Ritter Saunders reports: Idaho’s largest business lobby is hosting its annual policy meeting in Coeur d’Alene this week. According to theCoeur d’Alene Press, Gov. C.L. “Butch” Otter is attending the Idaho Association of Commerce and Industry retreat, along with about 60 legislators and 130 IACI members.

    Sure to be on IACI’s 2014 legislative agenda is a complete repeal of Idaho’s business equipment tax. It was partially repealed this year, exempting the tax for about 90 percent of small businesses while keeping the bulk of the revenue stream in-tact.

    When Gov. Otter signed the tax exemption bill into law back in April, he wrote to legislators that it was just a start. “I would strongly encourage the Legislature to continue the work of relieving all Idaho businesses of this burdensome and onerous tax,” Otter wrote to lawmakers.

    The Coeur d’Alene Press reports Rep. George Eskridge (R-Dover) also wants the personal property tax exemption expanded. However, Rep. Eskridge says that isn’t accurate.

    He tells StateImpact Idaho the revamped personal property tax law solved the problem it set out to. “It gets them [small businesses] out of the onerous reporting,” says Eskridge. “In my mind, I’m not sure I want to go any farther.”

    Eskridge says a full repeal of the personal property tax, or exempting the tax for larger businesses will undoubtedly be discussed in 2014. He’s just not convinced it’s the right thing to do.

    The Coeur d’Alene Press also notes healthcare will be an agenda item for IACI. The paper notes lawmakers will likely talk about expanding Medicaid for more low-income Idahoans.


    The Lewiston Tribune opines:  Idaho needed candor from Duane Nellis as he departed the University of Idaho presidency on his way to Texas Tech in Lubbock.

    Nellis didn’t provide it.

    In a farewell essay published in the Idaho Statesman (May 28), Nellis wrote:

    “If I could give one final piece of advice to my friends in the state Legislature, it would be to invest in these people (faculty and public employees). I would hope that your highest priority next year is CEC – Change in Employee Compensation.”

    Faculty and state workers have taken it on the chin these past few years as first the bottom fell out of the state budget, and then lawmakers opted to funnel what little new money they received into tax cuts for the well-off and corporations.

    But is that really the primary crisis facing Idaho education?

    Take a high school graduate with the ability to perform college-level work. If he comes from a family with the means to pay for it, he has a 75 percent chance of going to school.

    If that same student – same skill set, same motivation to succeed – comes from a low-income family, his chances of attending college drop to 44 percent.

    Which scenario sounds more like Idaho?

    This is, after all, a place where per capita income has fallen eight notches in the last decade and is second only to Mississippi’s.

    This is an economy that produced a higher proportion of minimum-wage jobs than any other in the U.S.

    A state where the wage gap has expanded from 15 percent behind the national average to 23 percent.

    Where people working in many occupations earn a median income below their peers in every – or nearly every – other state.

    Yet, the state leadership has relentlessly balanced the budget on the backs of its college students. Five years ago, Idaho tuition covered about 30 percent of the cost of instruction. Today, it’s 47 percent and climbing.

    Since 2008, state support for Idaho’s colleges and universities has dropped $48.6 million. In that same time, tuition has jumped $89.5 million.

    Idaho likes to think it delivers higher education for a bargain. But when you factor in Idaho’s relatively high rate of poverty coupled with its scant investment in needs-based scholarships, the net cost of attending an Idaho institution is relatively high.

    Hence, graduates emerge with huge debts. Last year, the average graduate debt load was $24,134 – higher than half the states and all but one of Idaho’s neighbors.

    But you didn’t hear Nellis say anything about that.

    Nor did he delve into Idaho’s backsliding.

    The Lewiston Tribune opines: Idaho’s college enrollment is ninth from the bottom. The proportion of its high school graduates heading directly into college is better than only three states. And only four states do a worse job in retaining college students for their second year.

    It adds up to this: One in 10 Idaho ninth-graders will graduate from college. Idaho is one of 17 states where today’s younger workers are less well-educated than the earlier generation – and Idaho’s performance on that measure is the fifth worst in the country.

    Someday, Idaho will break free from this state of denial. Somewhere a leader will emerge who tells Idahoans what it will cost them to adequately fund a higher education system available to all its young people – and the price to be paid for failing to provide it.

    Nellis had one final opportunity to be that voice.

    And he squandered it.

    Read more here: http://www.idahostatesman.com/2013/06/10/2610307/westviews-opinions-from-newspapers.html#storylink=cpy



    Emilie Ritter Saunders reports: After a month of larger-than-expectedstate tax collections, the revenue report for May shows collections came in just shy of the forecast.

    The Division of Financial Management released its monthly general fund status update Friday afternoon. It shows state tax collections were down 2.4 percent below expectations.

    This month’s General Fund showing reflects mixed performances by its five components. The sales tax was $3.4 million above the $86.2 million predicted for May 2013. Product taxes of $3.8 million topped its forecast by $0.3 million. However, the excess revenue from these two categories was more than offset by the lower-than-expected individual and corporate income tax collections. — DFM

    DFM reports individual income tax collections came in $5 million under forecast and corporate tax collections were $1.9 million under.

    Even though May tax collections were lower than anticipated, overall collections for the fiscal year are still beating projections. The state is expected to end the fiscal year next month above revenue forecasts.


    Emilie Ritter Saunders reports: The lawmakers who shape Idaho’s annual budget will tour the northern part of the state this week to get a glimpse of their policy decisions in action.

    Members of the Joint Finance Appropriations Committee, or JFAC, will spend three days at north Idaho businesses, landmarks, and schools.

    Legislative budget and policy analyst Keith Bybee says it’s a chance for lawmakers to see how budget policies and decisions are working, instead of just hearing about it when they’re in a committee room at the Capitol in Boise.

    Bybee says it’s important for lawmakers to understand how staffers like him spend the legislative off-season. “We spend a lot of time writing reports and making sure they [legislators] have the best information possible,” says Bybee.

    The 20-member budget panel will start at the Beck Road Interchange on I-90 near Post Falls, Idaho. That’s where a massive Cabela’s sporting-goods store was built in 2007, thanks in-part to a sales tax break the shopping-center’s developer receivedfor building the costly highway interchange. The Legislature approved the sales tax deal in 2007, and then revamped it in 2009.

    Lawmakers will spend time at North Idaho College, tour Farragut State Park where a new sewer system was recently installed, tour a couple of private businesses, and they’ll get briefed on the state’s finances,

    With April tax collections coming in well above projections, the Spokesman-Reviewreports the state is looking at $184.9 million in reserves by the end of the month.

    Bybee says even if tax collections just meet, not exceed, expectations for May and June, revenue is expected to be up 5.6 percent over the last fiscal year. “All economic signs are pointing toward good things, nothing has fallen off the table,” says Bybee.


    Audrey Dutton reports: Gov. Butch Otter wants to make it harder for people to benefit from Medicaid unless they make healthy choices. It’s one of the options he’s weighing as he ponders whether to add Idaho’s poorest adults to the program.

    A plan in the works by the Idaho Department of Health and Welfare carries the same theme – personal responsibility – but takes a different path.

    During the last legislative session, Otter said he wouldn’t support going along with the national expansion of Medicaid right away. That means Idahoans won’t be eligible when the expansion kicks in next year and offers coverage to all adults up to 138 percent of the poverty line.

    The state wouldn’t pay more than 10 percent of the cost, but Otter demurred. He had assembled a Medicaid work group that ultimately recommended the expansion, but with caveats that Idaho’s program needs tweaking.

    “We have time to do this right, and there is broad agreement that the existing Medicaid program is broken,” Otter said in his State of the State prepared remarks.

    The program currently covers about 230,000 people and costs about $1.65 billion a year, and the federal government pays about 70 percent of the medical claims. An expansion would raise enrollment by roughly half. It would save Idaho taxpayers money that is currently spent on catastrophicmedical bills for the poor.

    Otter told the Idaho Statesman’s editorial board last week that he wants Medicaid to require more personal responsibility and better health outcomes.

    “If you’re smoking, you gotta quit smoking,” he said. “And if you don’t quit smoking, some part of the benefit, or all of it, goes away.

    “If you’ve got a history of diabetes in your family, and you’re told to change a certain lifestyle, and you don’t do it, then you don’t get (benefits) anymore.”

    He said those two things exemplify “what’s wrong with the present Medicaid system.”

    People “don’t have any responsibility or personal stake,” he said. “It’s not based upon success, it’s actually based upon a failure.”




    Otter isn’t the first to demand such changes. Elected officials in states such as Maine andMichigan have pitched similar ideas. And his criticism echoes that of many in the health care industry. The dominant model for health care in the U.S. is “fee for service,” which ends up paying more for medical emergencies than it does for prevention.

    Idaho’s Medicaid program is already shifting away from that and toward a system that considers how well a doctor or medical team performs in keeping the patient healthy.

    Otter also wants to bring more accountability to medical providers, such as reimbursing them based on patient outcomes, said his spokesman, Jon Hanian.

    “The governor believes incentives can be used to motivate people who may otherwise avoid taking some personal responsibility,” Hanian said in an email. “That is an important distinction, especially when taxpayers are shouldering more and more of these costs.”




    Medicaid has been a federal-state partnership since Congress created it in 1965. It covers low-income children and specific groups of adults, mainly those with disabilities and chronic illnesses.

    Whether Idaho opts to expand the program or not, about 35,000 more Idahoans are expected to join Medicaid next year because they already are eligible.

    The optional expansion would mean that Medicaid would cover nearly one in four Idahoans.

    Hanian said Otter wants to consider options along the lines of one that already exists for Idaho’s Children’s Health Insurance Program, which covers children whose family incomes are too high for Medicaid. Some lower-income families who have CHIP coverage can opt to receive a $10 monthly credit to offset their $10 or $15 premiums. The premium credit hinges on whether the child is up to date on shots and receives regular wellness checks.

    “We saw a 60 percent increase in parents seizing upon that incentive,” Hanian said.




    The U.S. Department of Health and Human Services said in December that states can include personal-responsibility options, depending on how they’re designed.

    “We note in particular that states have considerable flexibility under the law to design benefits for the new adult group and to impose cost-sharing, particularly for those individuals above 100 percent of the federal poverty level, to accomplish these objectives, including Secretary-approved benchmark coverage,” the agency said.

    With that in mind, the Department of Health and Welfare is drafting a skeletal plan called “Healthy Idaho” to have something ready to roll out if the Legislature expands Medicaid.

    The plan has two parts.

    The first targets health care providers, pushing them to work in ways that would be cheaper for Medicaid by paying them for overall care, not for each service, and possibly by rewarding them with a share of the money saved.

    The second aims at patients, rewarding them with credits toward future copays when they take preventive steps such as receiving mammograms or vaccinations or giving up tobacco.

    An office-visit copay for someone on Medicaid is less than $4 now. But that can be a deal-breaker for people who earn little enough to qualify, said Denise Chuckovich, deputy administrator for Medicaid, behavioral health and managed care.

    Offering credits for that $4 could be Idaho’s investment in keeping its residents healthy and out of the hospital, she said.

    “We’ve been having conversations with (the Centers for Medicare and Medicaid Services) about this design and making tweaks as we talk with them and find out what they will and won’t allow us to do,” she said.

    Read more here: http://www.idahostatesman.com/2013/05/30/2595854/carrots-and-sticks-for-medicaid.html#storylink=cpy



    Emilie Ritter Saunders reports: Nearly 4,000 uninsured Idaho veterans would be eligible for health insurance if the state expanded Medicaid coverage. That’s according to new analysis from the Urban Institute, reported by Stateline.

    Idaho isn’t expanding Medicaid coverage to more low-income residents, although the governor has said he isn’t ruling it out.

    As Stateline reports, in states that expand the program, adults at 138 percent of the federal poverty line (that’s earning $15,415 annually) will be eligible for health care in January through Medicaid. But not in Idaho.

    Many people assume that the nation’s 12.5 million non-elderly veterans receive health benefits through the Department of Veterans Affairs (VA). But only two-thirds of those veterans are eligible for VA health care and only one-third are enrolled.

    Nationwide, there are about 1.3 million uninsured veterans.

    In a recent report, the Urban Institute estimated that if every state embraced the new Medicaid rules, as many as 535,000 uninsured veterans and 174,000 veterans’ spouses would become eligible for Medicaid coverage. – Stateline

    Idaho is one of 23 states that is not expanding Medicaid to more low-income people. Six states haven’t made a decision, 21 states will expand coverage.


    Dan Popkey reports: Gov. Butch Otter is rejecting the notion that a projected $162 million in surprise revenue means the 2014 Legislature should boost spending growth.

    Otter said he’s “bound and determined that the government is not going to grow back at the same rate that the economy grows” and said the lessons of the Great Recession prove that government can do with less by exercising fiscal discipline, co-locating agencies andengaging in partnerships outside of government.

    “That all suggests to me that there’s no reason to go back to the old way of doing things – because we got a little extra money, let’s spend it,” Otter said in a Tuesday meeting with the Idaho Statesman editorial board.

    Last week, Otter’s retired chief economist, Mike Ferguson, produced the $162 million figure as an estimate from fiscal 2013 – which ends June 30 – and fiscal 2014. Ferguson, an advocate of increased investment in public education and other infrastructure, said the new money has “profound implications for fiscal decisions that will be made in the next legislative session.”

    Ferguson, an economist for six governors, now heads the Idaho Center for Fiscal Policy.

    For the first 10 months of the 2013 budget year, revenue was $79 million above projections, according to Otter’s chief economist, Derek Santos, Ferguson’s former subordinate. April revenue alone was up $56 million in a $2.7 billion budget.

    The Legislature’s budget office, however, notes that $86 million is already committed because existing law requires transfer of the money to the state Budget Stabilization Fund by June 2014 as insurance against a future downturn. An estimated $59 million will come from fiscal 2013 surplus and $27.3 million from fiscal 2014.

    Otter acknowledged he will have more leeway in proposing a 2015 budget to lawmakers in January than he has had since the economy faltered in 2008. But maintaining a robust savings account is central to keeping state operations stable, the governor said. He noted that he trimmed spending by about 26 percent during the downturn.

    “Remember, in 2007 I had $400 million in accumulated savings, plus the surplus that year, that we refused to spend,” Otter said. “So I don’t see that $80 million is going to put us over the threshold” of prudent savings.

    Otter said he doesn’t want to risk midyear holdbacks in spending, which he said he’s experienced 10 times in his 14 years as lieutenant governor and six-plus years as governor. “Nothing is more dysfunctional,” he said.

    Read more here: http://www.idahostatesman.com/2013/05/23/2587042/otter-says-surplus-not-license.html#storylink=cpy

    Dan Popkey reports: Gov. Butch Otter is rejecting the notion that a projected $162 million in unexpected revenue means the 2014 Legislature should aim to boost spending.

    Otter said he’s “bound and determined that the government is not going to grow back at the same rate that the economy grows” and said the lessons of the Great Recession prove government can do with less by exercising fiscal discipline, co-locating agencies and engaging in partnerships outside of government.

    “That all suggests to me that there’s no reason to go back to the old way of doing things: because we got a little extra money, let’s spend it,” Otter said in a Tuesday afternoon meeting with the Idaho Statesman editorial board.

    Last week, Otter’s retired chief economist Mike Ferguson produced the $162 million figure as an estimate of unexpected revenue for fiscal 2013, which ends June 30, and fiscal 2014. Ferguson, an advocate of increased investment in public education and other infrastructure, said the new money has “profound implications for fiscal decisions that will be made in the next legislative session.”

    Ferguson, an economist for six governors, now heads the Idaho Center for Fiscal Policy.

    For the first 10 months of fiscal 2013, revenue was $79 million above projections, according to Otter’s Chief Economist Derek Santos, Ferguson’s former subordinate. April revenue alone was up $56 million in a $2.7 billion budget.

    The Legislature’s budget office, however, notes that $86 million is already committed because existing law requires transfer of the money to the state Budget Stabilization Fund by June 2014 as insurance against a future downturn.

    Otter acknowledged he will have more leeway in proposing a fiscal 2015 budget to lawmakers in January than he has since the economy tanked in 2008. But maintaining a robust savings account is central to keeping state operations stable, said Otter, noting he trimmed spending by about 26 percent during the downturn.

    “Remember, in 2007 I had $400 million in accumulated savings, plus the surplus that year, that we refused to spend,” Otter said. “So I don’t see that $80 million is going to put us over the threshold” of prudent savings.

    Otter said he doesn’t want to risk mid-year holdbacks in spending, which he said he’s experienced 10 times in his 14 years as lieutenant governor and 6-plus years as governor. “Nothing is more dysfunctional,” he said.


    Read more here: http://blogs.idahostatesman.com/otter-to-ferguson-keep-your-hands-off-idahos-surplus/#storylink=cpy

    Dan Popkey reports: Former chief state economist Mike Ferguson’s analysis of the big jump in revenues for the year’s most important month means the 2014 Legislature will have $162 million more than contemplated when lawmakers adjourned early last month. That figure represents about 6 percent of state general fund spending.

    But the Legislature’s budget office noted last week in its 2013-04 Budget and Revenue Monitor that the booming revenues won’t simply fall into lawmakers’ hands for new spending. Existing law requires that more than half that amount — $86.3 million — be transferred to the Budget Stabilization Fund by June 2014. The Legislature automated transfers in high-growth years to rebuild savings accounts that helped the state weather the recession.

    “The April revenue results have profound implications for fiscal decisions that will be made in the next legislative session,” writes Ferguson, who heads the Idaho Center for Fiscal Policy and advocates increased investment in education, transportation and and other public infrastructure.

    “While the numbers will change (for example, we don’t yet know actual May and June revenue numbers, and we don’t know what revised forecast growth rate will be used for FY 2014), it is clear there will be substantially more revenue available than policymakers thought less than two months ago,” Ferguson writes. “How this additional revenue is utilized will depend on Idaho’s public policy priorities.”

    Ferguson projected state revenue for six governors: Democrats John Evans and Cecil Andrus, and Republicans Phil Batt, Dirk Kempthorne, Jim Risch and Butch Otter.

    Click here to read the Idaho General Fund Revenue Report issued last week. The general budget lawmakers wrote for fiscal 2014, which begins July 1, is $2.8 billion.

    Read more here: http://blogs.idahostatesman.com/ferguson-extra-162-million-has-profound-implications-for-idaho-budget-writers/#storylink=cpy



    Emilie Ritter Saunders reports: In the largest unexpected increase of the fiscal year, Idaho state tax collections were up 13.2 percent above projections in April.

    The Division of Financial Management reports tax collections totaled $483.9 million during the largest tax-collecting month of the year. DFM forecast April collections wouldn’t exceed $427.4 million.

    “Thanks to this string of strong revenue months, the state’s April 2013 fiscal year-to-date General Fund receipts are $79.1 million higher than anticipated, $2,319.8 million compared to the predicted $2,240.7 million.” – Division of Financial Management

    Of the three main tax categories, individual income taxes came in the highest above projections.

    “Individual income tax collections for the month were $337.4 million, which was 11.6% more than was predicted. This category’s strong showing reflects the surge in filing collections that far exceeded expectations. April filing collections of $313.7 million eclipsed the forecast $278.1 million by $35.6 million. This strong showing is consistent with the huge payment of dividends, interest, and rents in the fourth quarter of CY 2012. This quarter’s growth was the strongest in over three decades, and it is not expected to be repeated in the near future.”  – Division of Financial Management

    The revenue projections are used by state lawmakers to write budgets.

    *We originally reported corporate income tax collections came in the highest above projections, when in fact it was individual income tax collections.


    Emilie Ritter Saunders reports:  A bill that would give a sales tax exemption to pregnancy resource clinics that don’t offer abortion services has passed the House. In a 58-12 vote, Idaho lawmakers approved Rep. Kelley Packer’s (R-McCammon) proposal.

    Packer introduced the bill on behalf of Boise’sStanton Healthcare, after the organization purchased two ultrasound machines and were charged a sales tax. The organization didn’t think it should be subject to sales tax because it is a non-profit, and because it’s a health related entity, which are largely tax exempt in Idaho.

    “That little amount of money to the state creates a huge concern for them,” Packer says. According to Packer, Stanton’s tax bill on the ultrasound machines was $6,000.

    Rep. Grant Burgoyne (D-Boise) says the Legislature shouldn’t make policy based on one organization’s misunderstanding of the law. “We’re backing our way into a policy because someone got caught up in a mistake,” Burgoyne says.

    More than one lawmaker, including Burgoyne, suggested maybe it’s time Idaho look at the sales tax policy, and perhaps broaden exemptions to include all non-profits, rather than selecting exempt entities piecemeal.

    “There are many other organizations that are also worthy of an exemption,” Burgoyne added. “Clinics that deal with the mentally ill, those who deal with suicide issues, those who deal with things like Alzheimer’s and diabetes and nutrition.”

    It’s unclear how much sales tax revenue Idaho stands to lose if this exemption becomes law. Rep. Packer’s bill estimates the state could lose $10,000 annually.

    The tax exemption proposal now heads to the Senate for consideration.


    Peter Crabb Column:  More health care choices may be coming to your neighborhood, courtesy of Washington, D.C.

    Idaho’s Legislature is debating the establishment of a state-run health insurance exchange. But with a federally run health insurance exchange, we all may end up with more choices and better service.

    Gov. Butch Otter supports the creation of a state-run health insurance exchange as directed under the federal Patient Protection and Affordable Care Act, otherwise known as Obamacare. The costs of operating such an exchange at the state level are high and the potential benefits, if any, uncertain.

    Perhaps more important, a federally run exchange could be the best thing to happen to health care consumers in quite awhile. A federally run health insurance exchange is more likely to lead a to national market for the sale of health insurance. A national market will lead to more competition and better service.

    Economic theory predicts and historical evidence shows that prices decline as markets open to more competition. Just as countries benefit when they open their borders to international trade, trade between the states is good for everyone. Selling health insurance across state lines can improve choices and lower prices.

    Insurance companies need large markets to achieve economies of scale. Many businesses seek the cost advantages that come from spreading their fixed costs over a higher level of output. For health insurance providers, the fixed costs of setting up policies and establishing relationships with doctors and hospitals can be very high. Allowing insurance companies to operate across state lines is one way to spread out these costs.

    Many consumers complain that their health insurance premiums are too high and their policies too hard to understand. But similar complaints are rarely heard about car and life insurance, which can be purchased across state lines from large firms operating in a very competitive market.

    Two years ago, researchers from the University of Minnesota published a study showing that an interstate market for health insurance would increase coverage and lower premiums. Their data show that Idaho could expect a 17 percent increase in health insurance coverage if a national market were established. With more buyers of health insurance, the risks to the insurance company fall and premiums decline.

    Recent experiments in interstate sales of health insurance have brought little or no change. Georgia’s market is open to outside insurance carriers, and Wyoming put forth a proposal for an interstate exchange, but both states have seen little action from insurance companies. Without a national market, there is little incentive for insurance companies or health care providers to make the capital and labor investments needed to support interstate transactions.

    The situation is analogous to interstate banking. In 1975, Maine opened its markets to branch banking and saw little change in services or prices. It was not until all states followed in the early 1990s that the benefits of interstate banking became evident. It will take time and many state-law changes, but a more open market will lead to better consumer choices and lower prices.

    There’s no need to bother with a state-run exchange. Washington can bring lower health insurance premiums and better coverage to us.

    Read more here: http://www.idahostatesman.com/2013/02/12/2448061/a-federal-exchange-will-bring.html#storylink=cpy



    Hannah Furfaro reports:  The Senate Education Committee agreed Monday to introduce three revised bills aimed at giving Idaho school boards authority to reduce teacher salaries and more bargaining leverage during contract talks with the teachers union.

    The three measures mirror versions introduced in the same committee last month. They were submitted again Monday to reflect changes brought about by six hours of negotiations between school board officials, the teachers union, lawmakers and other education stakeholders.

    The bills, being pushed by the Idaho School Boards Association, would change the nature of negotiations that occur each year on so-called master contracts – the broad agreements that cover salaries and benefits, as well as issues such as length of school year and teacher duties outside the classroom.

    Karen Echeverria, ISBA executive director, said the version introduced Monday would allow for two-year extensions on master agreements dealing with non-salary issues. Salaries and benefits, she said, would be negotiated annually. Not everything in the revised bills has the support of the Idaho Education Association.

    “We knew there were going to be issues we simply were not going to be able to agree upon,” Echeverria said of the talks. “I had really hoped we had more of a consensus.”

    The other two bills introduced Monday would:

    - Give school boards authority to make across-the-board cuts in teacher salaries, in direct challenge to a 1963 law that prohibits pay cuts for public school teachers. Echeverria said changes were made to soften concerns that a district would reduce a single teacher’s salary in an attempt to force that teacher out.

    - Keep school boards from placing teachers on no more than 60 days of unpaid leave if they are under internal investigation by their school district.

    The new bills earned praise and criticism from teachers, administrators, parents and school board members during a two-hour public hearing held by the House and Senate education committees. Some of the foes criticized the school boards for bringing back contract statutes that were approved in 2011 as part of the Students Come First overhaul but ultimately repealed at the ballot box last November.

    More than 250 people filled the Capitol Auditorium, the second of two forums dedicated to gathering input from the public on education reform legislation, and a hundred more filled seats in committee rooms across the hall to watch the hearing on video screens.

    But lawmakers were also urged to consider greater funding for charter schools, classroom sizes and teacher effectiveness.

    Several school principals testified that years of budget cuts have led to personnel cuts and a resulting increase in class sizes.

    Eagle High School teacher Gail Chumbley said her class sizes have increased since 2008, leaving her with a sense of hopelessness. She encouraged legislators to keep good will and have a sense of common purpose at the forefront when debating education funding this year.

    “(Cuts have) prohibited my ability to maintain my standards of excellence,” said Chumbley, who added she plans to retire at the end of the school year. “I can’t do what I know is needed, and I cannot lower my standards in my classes.”

    Some who testified urged legislators to give school districts more local control over their finances.

    Scott Rogers, superintendent in the Minidoka County School District, said his district has absorbed increasing insurance and utility costs over the last several years. He said a reduction in teaching staff and higher operating costs are increasing class sizes and forcing tough choices on programing.

    “I’m no farmer,” he said, “but I do know if you starve a pig, it will die.”

    Read more here: http://www.idahostatesman.com/2013/02/11/2448105/education-reform-bills-approved.html#storylink=cpy



    Laurie Welch reports:  County and city officials across Mini-Cassia urged their residents Friday, Feb. 8, to fight a legislative effort to modify Idaho’s personal property tax on businesses.

    Legislators are currently looking at a complete repeal of the state’s personal business property tax, which helps fund counties, cities and other taxing districts. A second option would be to put in a $100,000 exemption, which would eliminate it for nearly 90 percent of businesses that currently pay it.

    The $100,000 exemption became state law in 2008, but with a catch — a trigger of 4 percent growth in state revenues that on the heels of the recession, means it’s never taken effect.

    Cassia County Clerk Joe Larsen said Friday that if the entire tax is repealed, the county and other taxing districts within it will lose nearly $2.9 million in funding. Replacing that funding would increase property taxes for residents and small-business owners, unless the Legislature provides an alternative revenue source.

    Larsen said the only two property categories to benefit from the repeal of the tax would be commercial and industrial property.

    Minidoka County would lose an estimated $800,000 in funding annually, according to figures presented Friday. The city of Burley would lose $191,818 and Rupert would lose $170,000.

    If the tax is entirely repealed, the estimated reduction in funding statewide is $140 million, said Bob Moore, Minidoka County commissioner.

    “Our legislators only hear us for a small amount of time and then they tune us out,” Moore said.

    Larsen said residents and business owners need to contact their legislators and let them know how they feel about the issue.

    The officials also calculated what losing the personal property tax would mean for participants in the state’s Property Tax Reduction Program. Known as the “circuit breaker”program, it reduces property taxes for low-income residents who are blind, elderly, widowed, disabled or meet other qualifications.

    Changes to levy rates if the business tax had to be replaced would increase what the program’s participants pay by as much as 63 to 97 percent, according to the figures presented Friday.

    “Large business will be the only ones to benefit from this. It’s a misconception that mom-and-pop operations will benefit,” Rupert City Administrator Kelly Anthon said.

    Idaho Gov. C.L. “Butch” Otter has proposed setting aside $20 million to help mitigate the loss, said Bob Moore, Minidoka County commissioner.

    But, local officials argue, the amount is only a one-time stipend and the loss to the cities and counties will occur annually.

    Burley City Administrator Mark Mitton said the repeal of the tax would essentially take away his city’s urban renewal agency’s incentives to bring in new business.

    He said personal property tax never comes up when a company is negotiating a deal to come to Burley.

    Mitton said some of the companies in the state to benefit most from the repeal are Idaho Power, Union Pacific Railroad, Century Link, Micron and Intermountain Gas.

    Bob Dempsay, who is on the Association of Idaho Cities board for the district, said a recent Boise trip left him the impression that “the train had already left the station” in regards to legislators passing some form of the repeal.

    Dempsay said repealing the tax will give legislators the opportunity to show their support for big business.

    “This has been characterized as a Republican issue but as a conservative Republican this will be devastating to our community,” Anthon said.


    Molly Messick reports:  Not long ago, Sen. John Tippets (R-Montpelier) found himself in a peculiar spot. This summer and fall, influential lawmakers and the Idaho Association of Commerce and Industry made it clear that phasing out or eliminating Idaho’s tax on business personal property would be a focus of the 2013 legislative session.

    Tippets is a public affairs manager for fertilizer producer Agrium. It’s the parent company of Nu-West Industries, which pays the biggest business personal property tax bill in Caribou County. Tippets represents the company on the board of the Idaho Association of Commerce and Industry (IACI), which has championed getting rid of the tax.

    Still, Tippets’ view on the issue was clear. More than any other county in Idaho, Caribou County depends on personal property tax revenue. He had to support his constituents.

    “My position was that I would not support repeal of the personal property tax if it’s going to negatively impact the services that cities, counties, schools and other local taxing districts are able to provide,” Tippets said.

    Agrium went along, even though the company could save more than $600,000 each year if the tax goes away. Another multinational company with a presence in Caribou County, Monsanto,has also come out against a repeal.

    Only one other of the state’s top personal property tax payers reached by StateImpact has said it opposes eliminating the tax. That company is utility Avista, which is not an IACI member. Its regional business manager said in a Lewiston Tribune op-ed that the company “does not support the elimination of property taxes at the detriment of communities in Idaho.”

    Many of the companies StateImpact contacted have kept their cards closer to the vest. “With our substantial presence in Idaho, Union Pacific would receive a proportionate benefit should the Legislature decide to end the personal property tax,” reads part of an emailed statement from a Union Pacific spokesman.

    A Simplot spokesman passed on offering comment. The company is the top personal property tax payer in Power County, which relies heavily on personal property tax revenue.

    Anheuser-Busch and ConAgra — parent companies of some of the state’s largest payers — said they are IACI members but have not been active on this issue. Several other companies, including Idaho Milk Products, Glanbia Foods, Inc., and Sorrento Lactalis, Inc., did not return calls.

    Only a few top payers we contacted have indicated they favor eliminating the tax. Those are Micron Technology, Idaho Power, and Clearwater Paper Corporation.

    “We have a policy from the 1900s being applied to the 21st century,” Micron government affairs spokesman Mike Reynoldson said.

    Idaho Power was less direct. “Since there’s no bill at this point, we don’t have anything to say about the issue,” said spokeswoman Stephanie McCurdy in a voice mail message. “I would say talk to IACI, because they speak for the industry on this issue.”

    Clearwater Paper spokesman Matt Van Vleet says the company supports the eventual elimination of the tax, but with an eye toward the welfare of local government.

    “For us, the tax requires a significant amount of time and resources to process,” he said. Not only is the tax an administrative burden, he said, but it’s unfair. “All of our shipping and receiving equipment, we pay sales tax on that,” he explained. “And then we pay personal property tax on that.”

    According to an estimate from the Idaho Center for Fiscal Policy’s Mike Ferguson, Idaho Power could save more than $15 million in personal property tax if the tax goes away. Micron paid well over $3 million in personal property tax in 2011. Clearwater Paper paid more than $2.5 million.

    Sen. Tippets says he thinks lawmakers lately have become more cognizant of the purposes those tax dollars serve at the local level.

    “I think that the worst-case scenario for taxing entities is probably off the table at this point,” he said. “There was talk early on that the tax could be repealed and there would be no replacement. I don’t hear much talk about that at this point.”


    Sean Ellis reports:  An expected push to repeal the state’s personal property tax this year has some farm leaders alarmed because of concern about how it could affect agriculture.

    “It’s a possibility and we should take it seriously,” said Sen. Bert Brackett, a Republican rancher from Rogerson. “It’s been talked about a lot.”

    Agriculture equipment in Idaho is exempt from the personal property tax, which applies to business machinery, tools, furnishings, equipment and some fixtures and brought in $141 million for local governments in 2012, according to the Idaho State Tax Commission.

    The tax accounts for a larger share of revenue in rural areas than in the state’s larger urban areas and ag leaders are concerned that eliminating it could result in the tax burden shifting to agriculture.

    Idaho Grain Producers Association Executive Director Travis Jones said the state’s ag community will pay close attention to the debate on personal property tax repeal during the 2013 legislative session.

    “Idaho farmers have a lot of money wrapped up in personal property and they want to know if there will be an impact on producers in any way, shape or form,” he said.

    The repeal effort is being led by the Idaho Association of Commerce and Industry, one of the states most powerful lobby groups.

    Gov. Butch Otter tackled the issue in his annual state of the state address. He called the tax something “nearly everyone agrees is an unfair drag on our economy” and said he believes there is consensus that accomplishing repeal should be a priority for the legislative session.

    But Otter also noted how important the revenue generated by the tax is to local governments and said a plan has to be in place that “considers our counties’ financial stability.” He offered the possibility of granting counties local-option taxing authority.

    Idaho farmers are concerned that an increase in local tax rates would result in increased taxes for agriculture. Some rural counties, such as Oneida and Power, are heavily reliant on the personal property tax — both get about 40 percent of their total revenue from it — and they’re also heavily agricultural.

    “If they repeal the personal property tax, counties such as Power, which I represent, will lose a considerable amount of tax revenue,” said Sen. Jim Guthrie, a Republican cattle rancher from McCammon. “If they lose that, they will either look to the state or shift the tax to somebody else, which could include agriculture….”

    Otter’s proposed fiscal 2014 budget sets aside $20 million for easing counties’ transition should the tax be repealed. But that still leaves a sizable hole that will have to come from somewhere and farmers worry they’ll be a target.

    “That’s a big concern we have,” said Dar Olberding, a lobbyist for the wheat industry.


    Betsy Russell reports:  The House Revenue & Taxation Committee has voted overwhelmingly in favor of HB 88, the governor’s bill to revise and expand the Hire One More Employee (HOME) tax credit. Only Rep. Lenore Barrett, R-Challis, opposed the move, which sends the bill to the full House for debate. There was extensive testimony in favor of the bill, and just one person speaking against it, Parrish Miller of the Idaho Freedom Foundation, who read a statement from the group’s head, Wayne Hoffman, objecting that the bill creates “winners and losers.”

    Among other changes, the tax credit bill adds an additional $1,000 credit if the new employee is a veteran; removes a requirement for employer-provided health insurance for the new job to qualify for the credit; changes the amounts and wage levels; and removes ties to the employer’s rating with the state Department of Labor for use of the unemployment insurance program.

    Rev & Tax members had lots of questions; the Otter Administration responded by bringing in extensive financial information about the credit, including detailed charts. “We had some good, positive testimony,” said Rep. Gary Collins, R-Nampa, Rev & Tax chairman.


    Jennifer Swindell reports:  The governor’s Education Task Force will not make recommendations to the 2013 Legislature, leaving $34 million in legislative limbo.

    Gov. Butch Otter and Superintendent of Public Instruction Tom Luna both allocated in their education budgets $34 million to pay for task force recommendations.

    Meeting with reporters Friday morning, Otter said his budget has no Plan B for the $34 million — and he indicated that the money could now be up for grabs.

    “Outside the task force, we have a lot of recommendations for what to do with the $34 million,” Otter said at an Idaho Press Club forum.

    Luna said the money should stay in education, but there is “no meat on the bones of a Plan B” yet.

    Sen. John Goedde, R-Coeur d’Alene, a member of the task force and chair of the Senate Education Committee, said he hopes the money is kept in the education budget and assigned to one-time expenditures so it can be given back to the task force in 2014.

    “We can use the money for additional professional development or hardware,” he said. “That’s my hope.”

    Rep. Reed DeMordaunt, R-Eagle, a member of the task force and chair of the House Education Committee, agreed that the money should stay in education and that task force members have brought up good ideas to consider, such as professional development for Common Core implementation.

    “I’m only one vote but that’s what I’m going to fight for,” DeMordaunt said of keeping the money in education.

    The Legislature ultimately has the responsibility of spending that money with options that include giving it to K-12, putting it into an education savings account or directing it to another agency.

    Education Task Force Chairman Richard Westerberg said the group will get public input from around the state before making recommendations, and that will take months. The plan is to set up public hearings and an electronic bulletin board.

    The 31-member task force met all day Friday on the Boise State University campus. The members split into five focus groups — professional development, teacher effectiveness, fiscal stability, technology and structure. The groups meet most of the day and developed ideas from their topics. Those ideas were shared and vetted with the whole group. (Highlights of those ideas are at the bottom of this report and will be posted in full next week on the State Board website).

    The task force will meet again on March 15 to discuss the ideas developed on Friday. Anyone and everyone will have the opportunity to offer feedback and that feedback will be considered with the full task force later this year, Westerberg said.

    The task force began its Friday meeting by listening to presentations about preparing teachers in Idaho Common Core State Standards from Jennifer Snow (Boise State University) and Paula Kellerer (Northwest Nazarene University). Also presenting was Allison Henken of the State Board of Education, speaking on successful teacher preparation models, and the State Department of Education’s Nick Smith about professional development plans around Common Core.

    Highlights of ideas developed by the task force:

    Professional development — The  No. 1 priority is the Common Core, Smarter Balance and technology.

    Teacher effectiveness — Should be changed to teacher and administrator effectiveness. This includes increasing mentoring and creating effective evaluation. With that comes accountability, and increasing the amount of training and use of tools in practice.

    Fiscal stability — The priority is identifying a funding model that follows the student, but the focus of funding should be on student membership, not attendance. Another goal: gaining consistency with the salary model.

    Technology —First, identify what Idaho needs. Make sure every student has access to any course he or she wants to take. Review what resources exist and identify what’s needed.

    Structure — Decisions should be made as close to the student as possible. Unleash capacity at the local level. Identify the skills students must have to be successful. Create an accountability system, and with that comes consequences.

    Members of the task force:

    Richard Westerberg, Chair State Board of Education
    Doug Baker University of Idaho
    Laurie Boeckel Idaho Parent Teacher Association
    Roger Brown Governor’s Office
    Cheryl Charlton Idaho Digital Learning Academy
    Linda Clark IASA, Joint School Dist. No. 2 (Meridian)
    Penni Cyr Idaho Education Association (IEA)
    Reed DeMordaunt (R) Idaho House of Representatives
    Karen Echeverria Idaho School Boards Association (ISBA)
    Ken Edmunds State Board of Education
    Wayne Freedman ISBA Past President
    John Goedde (R) Idaho State Senate
    Steve Higgins IASA, Grangeville School Dist.
    Mary Huff ISBA, Melba School Board Member
    Teresa Jackman IEA, Pocatello
    Alex LaBeau Idaho Association of Commerce and Industry
    Mike Lanza IEA, ID Parents & Teachers IPATT
    Rod Lewis State Board of Education
    Bob Lokken Idaho Business for Education
    Tom Luna Superintendent of Public Instruction
    Alan Millar Idaho Charter School Network
    Phyllis Nichols Counselor, New Plymouth School Dist.
    Katie Pemberton Coeur d’Alene School Dist.
    Roger Quarles Idaho Leads Project
    Mary Ann Ranells IASA, Lakeland School Dist.
    Anne Ritter ISBA President, Meridian School Board Member
    Brian Smith IEA, Sandpoint
    Geoffrey Thomas IASA, Madison School Dist.
    Janie Ward-Engelking (D) Idaho House of Representatives
    Cindy Wilson IEA, Meridian
    Rob Winslow Idaho Association of School Administrators (IASA)

    Emilie Ritter Saunders reports:  For cookie connoisseurs, this might be the best time of year. It’s Girl Scout cookie season. Starting next week, Idaho Girl Scouts will be canvassing neighborhoods and their parents’ offices to take orders for boxes of Thin Mints, Samoas, and all the rest.

    Each box sells for $3.75, and 22 cents of that goes to the state. Idaho and Hawaii are the only two states in the country to tax the sale of Girl Scout cookies. That’s according to the Girl Scouts of Silver Sage, the council of Girl Scouts in southern Idaho, northern Nevada and eastern Oregon.

    The council is behind an effort to exempt the cookies from sales tax in Idaho. All together, their Scouts in Idaho sell about $2.5 million in cookies each year, $140,000 of which goes to the state.

    Julie Hart is lobbying the Legislature on behalf of Idaho’s Girl Scouts. She says the cookie fundraiser should be exempt from Idaho’s sales tax because money raised goes toward building life skills.

    “No matter how much the Girl Scouts tack on to a box of cookies, that’s still money they are not able to keep for the program,” says Hart. “The State of Idaho should not balance the budget on the backs of Brownies.”

    The Girl Scout cookie sale isn’t the only fundraiser taxed in Idaho. In fact, most are. Tax policy specialist at the Idaho Tax Commission Saul Cohen says unless specific fundraisers or entities are exempt from Idaho’s sales tax, they’re paying it. That means Boy Scout fundraisers are taxed here. School fruit or candy sales are also taxed. One specific exemption goes to 4-H or FFA clubs. Those groups don’t have to include a sales tax when they sell an animal at a local fair.

    There is a bill draft floating around the Capitol to exempt the Girl Scout cookie sale from Idaho’s sales tax. Hart expects the proposal will be in front of the House Rev and Tax Committee sometime next week. Still, chairman Gary Collins (R-Nampa) isn’t sure of the bill’s fate. “There are plenty of things looking for exemptions,” said Collins.


    Emilie Ritter Saunders reports:  Idaho Republican Party chairman Barry Peterson says the GOP’s position on creating a state-based health insurance exchange is “clear and irrefutable”. In advance of this afternoon’s Senate Commerce and Human Resources Committee vote on Gov. C.L. “Butch” Otter’s health exchange proposal, the party sent this statement to media and lawmakers:
    The Idaho Republican Party today reminded the Idaho State Legislature that the state’s Republicans stand opposed to the creation of a state health insurance exchange. The reminder comes as the State Senate is considering Senate Bill 1042, which would create an insurance exchange under the Patient Protection and Affordable Care Act.
    “The Idaho Republican Party’s position is clear and irrefutable. We want no part of Obamacare. We want the state to reject the implementation of a health insurance exchange. We want the state to appropriate no money for an insurance exchange, and we want Idaho to be among the growing number of states that have refused to go along with an insurance exchange,” said Idaho GOP Chairman Barry Peterson.
    Peterson added, “We have a great respect for Governor Otter and the work he is doing. We believe he is sincere when he says he wants a state Insurance exchange to protect Idahoans from the federal government. However, the party is not convinced by Governor Otter’s arguments. A state insurance exchange doesn’t protect us from the federal government; it invites further federal control.”
    Peterson noted that Governor Otter personally asked the Central Committee’s Resolution Committee to reject the resolution opposing a state insurance exchange, but the committee voted overwhelmingly in support of the resolution. Members of the Central Committee were also told of the Governor’s objections, but they too approved of the resolution.
    “This is not about our Governor,” Peterson said. “This is about cementing in place a law that we believe will do great harm to our state and country. This issue is bigger than any one person. The Central Committee is asking that the state maintain its opposition to a state insurance exchange. Remember, the Idaho State Legislature passed the ‘Idaho Health Care Freedom Act’ in 2010, opposing any and all Obama healthcare programs. We whole-heartedly accept and support that law. If Idaho’s Republican lawmakers decide to embrace Obamacare, Idaho will be making it difficult for other states to continue their resistance.” – Idaho Republican Party

    The Senate committee will take public comment on the health exchange today. A vote is expected at the panel’s 1:30 meeting. A live web-stream will be available here.


    Emilie Ritter Saunders reports:  Gov. C.L. “Butch” Otter’s health insurance exchange plan will move forward for a full vote in the Idaho Senate.

    Lawmakers on the Senate Commerce and Human Resources Committee spent more than 90 minutes listening to a second day of public testimony and debating the proposal before voting 8-1.

    The overriding theme: Idaho will be able to create and manage a more affordable and effective health insurance exchange than the federal government.

    The one dissenting vote came from Sen. Branden Durst, a Democrat from Boise. Durst voiced concern over the 16-member, governor-appointed board that will oversee the online marketplace. He says there should be more legislative oversight.


    Each Republican on the panel who spoke said they disagreed with the Affordable Care Act, often called Obamacare, and were disappointed the U.S. Supreme Court upheld the law. But each recognized the health care law is here to stay, for now, and said state control is better than federal control.

    Sen. Dean Cameron (R-Rupert) owns and operates an insurance agency. He’s previously said a health insurance exchange will hurt his business, yet he voted in favor of Gov. Otter’s state-based exchange.

    “Abandoning the battlefield does not make the federal government weaker, it makes them stronger,” says Sen. Cameron. “I believe the motive of the Affordable Care Act is to move us to a single-payer system…the state refusing to set up a state exchange empowers the federal government and allows the federal government to move us toward that single-payer system quicker.”

    Senate Bill 1042, which would create a state-based exchange, now goes to the full Senate for a vote. If it passes, the proposal still has to work its way through the House.


    Molly Messick reports:  Gov. C.L. “Butch” Otter made a little news yesterday with his uncertainty about whether lawmakers will come up with a plan for phasing out or eliminating the state’s tax on business personal property.

    “Whether we’re going to get anything done this year or not, I can’t predict that,” he said.

    He was speaking to county leaders, a crowd that has pushed back against the idea of eliminating the tax. Nevertheless, it was a notable statement. The governor and others have made the issue a top priority for this legislative session.

    Asked about Otter’s comment today, House Revenue and Taxation Committee chairman Gary Collins (R-Nampa) said discussions on the personal property tax are ongoing. 

    “I don’t know that we’ve stopped, or anything like that,” Collins said. “There is no piece of legislation. I can say that much.”

    He wouldn’t share details about the particular hang-ups, but indicated big questions remain. “It’s just – trying to decide where we’re going to go and how,” Collins said of the current process.


    Betsy Russell reports:  Idaho state Corrections Director Brent Reinke, who is making his budget pitch to lawmakers this morning, noted that just yesterday, he withdrew the request for a new $70 million, bond-funded secure mental health facility. “The need is here, to meet the needs of mental health, but what I’m hearing from legislators in this building and what we’ve heard from folks we’ve talked to, NAMI and lots of individuals, it’s great to have a secure mental facility, but what do we need in the community leading up to this?” Reinke said a “systemic” approach is needed. “What I’ve asked for is an opportunity to be able to retool this, bring back a plan for next year.” The idea, he said, is to examine mental health services and the whole criminal justice system, “so you don’t have to be a felon to receive services in the state of Idaho.”

    Reinke said the prisons have seen increasing numbers of inmates with mental health needs; in fiscal year 2012, 2,136, or 27 percent of all inmates, fell into that category.

    The prison system requested a 17.9 percent increase in state general funds next year, but Gov. Butch Otter is recommending a 6.6 percent boost.

    “Idaho’s inmate population is actually lower than it was at the beginning of this fiscal year,” Reinke told JFAC. “That’s something we should pause and celebrate. … This morning we were at 8,026 in custody.” Last year, the inmate population averaged 8,097; from July to December of this year, it’s averaged 7,986. In fiscal year 2006, it was 6,976. The average Idaho inmate stays for two years and seven months, so many are coming and going; more than 13,000 cyled through the state’s prisons last year. “98 percent of all of our inmates leave the state’s custody,” he said.

    Reinke said Idaho is on the verge of settling the Balla lawsuit that’s been ongoing for decades; as part of a stipulated agreement in the case, the Idaho State Correctional Institution would add five mental health staffers and seven correctional officers, and monitoring would continue for two years.


    Molly Messick reports:  Gov. C.L. “Butch” Otter this morning told a crowd of county officials he’s not sure the Legislature will be able to come up with a plan to eliminate Idaho’s personal property tax.

    “Whether we’re going to get anything done this year or not, I can’t predict that,” he said. “There’s probably more options out there than there are legislators.”

    Otter spoke at a conference of the Idaho Association of Counties. County leaders and other local officials have been some of the most vocal opponents to doing away with Idaho’s tax on business personal property, given the effect that tax cut could have on local government. The $140 million the tax brings in annually funds local services. 

    The governor noted the range of ideas that have been on the table, from phasing the tax out over a period of years to replacing some of the lost tax dollars by improving the state’s process for collecting taxes on internet sales. He also said he’s “painfully aware” of what eliminating the business personal property tax could mean in areas that derive a sizable fraction of their revenue from the tax.

    Otter called on lawmakers to create a plan for getting rid of Idaho’s tax on business personal property in his State of the State address last month. He also included $20 million in his budget to offset the local impacts of cutting the tax. Lawmakers have yet to put forth a bill.


    Emilie Ritter Saunders reports:  The debate among Idaho lawmakers started in earnest today over whether the state should create its own health insurance exchange.

    At its heart, the debate is an ideological one: does Idaho work within the confines of the federal health care law to establish its own exchange? Or, does Idaho continue to fight the law and reject the exchange, defaulting to a marketplace run by the federal government?

    The Otter administration is pushing for the first option. Even though the governor has opposed, what he and others call Obamacare in the past, he supports creating a state-based exchange so Idaho has as much control possible over the online marketplace to purchase insurance.


    Gov. C.L. “Butch” Otter’s chief of staff David Hensley told lawmakers, “Do we want in on the ground floor? Or do we want to inherit what the federal government sets up for the state of Idaho?”

    Hensley told the Senate Commerce and Human Resources Committee the administration estimates 278,800 Idahoans don’t have health insurance. That’s just under 20 percent of the population.

    “If we can help it, we don’t want to leave those individuals and small businesses at the mercy of the federal government,” Hensley says. “Even with the restrictions of Obamacare, we know we can do a better job at this than the feds.”

    The Otter administration estimates it will cost $20 million to start an Idaho-based exchange, which will be paid for through a federal grant. The ongoing, annual cost is estimated at $10 million.

    Hensley told lawmakers their plan is to charge members of the exchange a “premium fee.” That could be monthly fee of $4.80, which amounts to an annual cost of $57.60. A federal exchange, says Hensley, would charge monthly fees, on average, of $13.55, or $162.60 a year.

    “If we can save Idahoans money, which we believe we can by operating this in a more efficient manner, we should,” says Hensley.

    The head of the group leading the opposition to a state-based health insurance exchange doesn’t dispute that Idaho would save money if it created its own marketplace. But the conservative lobby group Idaho Freedom Foundation’s executive director Wayne Hoffman says it’s not about the money.

    “You’re implementing a form of phony federalism that will hurt your constituents in the long run,” says Hoffman.

    Hoffman has long been an outspoken critic of the federal health care law, and has urged the state to reject all aspects of it. When it comes to the health insurance exchange, Hoffman says state control is an anomaly. He says an Idaho-based exchange won’t give the state a seat at the table with the federal government, because there is no table. “The federal government sets the rules, and you comply with it,” Hoffman says.

    According to the Kaiser Family Foundation, 19 states, including Idaho, have declared intent to build a state-based exchange, while 25 have defaulted to a federal exchange and seven are planning a state-federal partnership exchange.

    Sen. Todd Lakey (R-Nampa) asked Hoffman if there would be a benefit to the state creating an exchange now, seeing how it works over the next year, and then possibly transitioning to a partnership or a federal exchange if things aren’t going as planned.

    That’s an option — states can switch — but Hoffman is skeptical of that route.

    “But that’s also true of Medicaid, and food stamps, and all the other entitlement programs you’re administering that you wish you could get out of, but you can’t, because you have people who are determined to get that benefit or entitlement,” says Hoffman.

    During the question and answer segment, the Senators repeatedly tried to pin Hoffman down on state sovereignty.

    “Do we both agree on the general conservative concept, better the state than the feds on a vast majority of things?” asked Sen. Lakey. “Why should we not be acting…like sovereign states?” asked Sen. Dean Cameron (R-Rupert).

    Hoffman said there is nothing about a state-based health exchange that protects state sovereignty. “Businesses already are at the mercy of the federal government.  This doesn’t shield them from anything,” he added. “You’re helping implement the thing that is hurting Idahoans.”

    For more than an hour, lawmakers listened to Otter’s chief of staff David Hensley and the Freedom Foundation’s Hoffman, and asked them both a litany of questions. That left just 25 minutes for public comment. Six people were given three minutes each to speak. In the standing-room-only auditorium, that left a lot of people without time to weigh in.

    On Thursday, the panel will continue its hearing on the exchange, and it’s likely the full 90 minutes will be available to hear from the public.


    Emilie Ritter Saunders reports:  Two studies released this week on Idaho’s workforce show state employees make less than their counterparts in neighboring states.

    The Office of Performance Evaluations and the Division of Human Resources each released studies this week focused on understanding state employee pay and turnover. That’s after the Legislature requested the reports last year.

    The study from the Division of Human Resources finds state worker pay is below market wages. The study says Idaho state employee wages are on average 10.7 percent lower than when compared to similar jobs in Arizona, Colorado, Montana, New Mexico, Nevada, Utah, Washington, and Wyoming.

    The Office of Performance Evaluations’ study looks at compensation and turnover. It doesn’t include state employee’s benefit packages.

    The study found 90 percent of Idaho’s classified employees earn less than the average market wage, or policy pay rate. Of those employees, nearly half make up to one-third less than market wage. The main reason for that: the recession. As Idaho cut funding for government agencies, employee pay wasn’t increased in four of the last 10 years.

    The study also found about a quarter of current Idaho state employees say they’d leave their job for something else within the next two years.

    In response to the report, Gov. C.L. “Butch” Otter wants to create a commission to study state worker issues, including compensation.

    “Capable, motivated employees are critical to the success of State government,” Otter wrote in response. “It is important that we reward them for their dedication and performance.”

    The governor said it was his intent during his first term to increase pay and benefits for state workers. He did that in fiscal years 2007-2009, but then pay was frozen for three years post-recession. Otter doesn’t include money in his 2014 budget for state employee raises.


    George Prentice reports:  There are very few Idahoans who can speak with great authority about Gem State spending. Mike Ferguson is at the top of the list. After more than a quarter of a century serving Republican and Democratic governors as Idaho’s chief economist, Ferguson now leads the Idaho Center on Fiscal Policy, crafting nonpartisan information and analysis.

    You would think that Ferguson would be the primary source of independent analysis when Idaho lawmakers play their annual guessing game, aka crafting a state budget.

    “If a legislative committee asks me to testify, I’m more than happy to do that, but I don’t go and testify in favor of, or against, specific legislation,” Ferguson told Boise Weekly. “My role is to provide fact-based analysis into the public realm and let them deal with it as they see appropriate.”

    In particular, BW spent some time talking with Ferguson about an idea from Republican lawmakers—including Gov. C.L. “Butch” Otter—to eliminate the business personal property tax.

    “Frankly, it makes no sense,” said Ferguson.


    Molly Messick and Emilie Ritter Saunders report:  In 2011, more than 53,000 Idaho companies paid the business personal property tax. Half of those businesses paid less than $90.

    Who stands to benefit from getting rid of the tax? Click around the map to see the top five payers in each county. The darker blue counties are more reliant on the personal property tax, and the map ranks their reliance by number.

    Idaho’s business personal property tax is often portrayed as the scourge of small business owners. It’s described as burdensome and unfair.

    The Idaho Association of Commerce and Industry (IACI) has fostered those characterizations in its formidable push to repeal the tax. It’s a message that appears to have traction. In his State of the State address, Gov. C.L. “Butch” Otter said he believes there’s a consensus among lawmakers that eliminating the tax “should be a priority for this legislative session.”

    The governor did not specify how the Legislature should go about getting rid of the personal property tax, but he did set aside $20 million in his budget to offset the losses local government will bear if the tax is repealed. In 2012, the personal property taxgenerated more than $140 million for cities, counties and local taxing districts.

    Given all of this, we wondered: Who will gain if the personal property tax goes away? This map has the answers. Along with the top five payers of personal property tax in each county in 2011, it shows the total number of payers in each county, the median payment, and the amount each county received in personal property tax revenue. The counties’ rate of reliance on the personal property tax as a fraction of total property tax revenue is based on a recent report from the Idaho State Tax Commission.

    The data tell a pretty interesting story. In Ada County, Micron is the top payer. If the personal property tax goes away, so does the company’s $2.9 million personal property tax bill. MP Mask Technology Center, LLC — a joint venture of Micron Technology, Inc. and Photronics, Inc. — has the third highest personal property tax bill in the county, at more than $900,000. Photronics, Inc. is itself the county’s fifth highest payer.

    In one county alone, Power County, J.R. Simplot Company would be relieved of a $1.7 million personal property tax payment if the tax is eliminated. That’s more than 60 percent of the county’s personal property tax revenue.

    We publish this map with one big caveat: It’s not complete. It does not include the personal property tax dollars that come from a category called “operating property.” That’s the term for property owned by entities like utilities and railroads. Unlike other kinds of property, which are locally assessed, operating property is centrally assessed by the Idaho State Tax Commission.

    In 2012, more than $42 million of the nearly $141 million in total personal property tax dollars paid in the state were paid on operating property. That $42 million is not accounted for in our map, because the tax commission has not compiled operating property tax payments by company and county.

    There is a workaround. Analysis by the Idaho Center for Fiscal Policy’s Mike Ferguson based on Tax Commission data shows which operating property tax payers will benefit most if Idaho’s business personal property tax is eliminated. At the top of the list is Idaho Power, which paid about $10.5 million in personal property tax in 2012.

    That $10.5 million is based on the Tax Commission’s judgment that 55 percent of electric utilities’ total property is personal property. IACI is pushing for that rate to be bumped to 80 percent. That would result in greater savings for electric utilities if lawmakers eliminate Idaho’s personal property tax.

    The table below shows the 10 centrally assessed companies that stand to gain the most if the tax goes away, and if the higher percentage of electric utilities’ property is categorized as personal property.

    Company Potential Tax Savings
    Idaho Power $15,372,835
    UP Railroad $5,431,319
    Avista $4,897,796
    Pacificorp $4,634,867
    Qwest $2,850,015
    Northwest Pipeline $2,682,262
    Intermountain Gas $2,179,244
    Gas Tansmission NW $1,754,655
    United Water $1,082,325
    Frontier $1,002,664


    By exempting the first $100,000 worth of personal property, lawmakers could free nearly 90 percent of personal property tax payers from paying the tax, while still allowing local government to retain 80 percent of the revenue. But IACI, Idaho’s most powerful business lobby, is pushing to get rid of the tax entirely.

    Listen to our two feature stories on Idaho’s business personal property tax here andhere.


    Molly Messick reports:  Rep. Gary Collins, a Republican from Nampa, heads the Revenue and Taxation Committee.  It’s a powerful position, because all tax bills originate in the House.  What’s more, there’s bound to be particular attention focused on the committee this session as the Idaho Association of Commerce and Industry, the state’s most powerful business lobby, pushes for a repeal of the personal property tax.

    In Idaho, the personal property tax only applies to personal property used for business purposes.  According to a recent estimate from the Idaho State Tax Commission, revenue from the personal property tax totaled $141 million in 2012.  Nearly all of Idaho’s property tax revenue is collected and spent by local governments.

    Collins began by talking about the possible courses of action with respect to the personal property tax when we met in mid-December.  This interview is one of several conducted by StateImpact to preview the 2013 legislative session, which begins Monday.

    A:It’s not a new subject to Revenue and Tax.  We passed a piece of legislation back in 2008 that would have exempted the first $100,000 worth of personal property, which would have covered a large percentage of the businesses here in Idaho.  But one of the things we had to do in order to get it passed by both bodies was to put a trigger on it.  Since the economy has went in the tank since then, the trigger has never been met.

    There’s talk of taking the trigger off of that particular piece of legislation.  There’s talk of maybe moving it to $250,000.  The $100,000 – and these figures could vary – we’re looking at around  $18 million as far as a hit to the counties.  And the $250,000 would be in the neighborhood of about $10 million more than that, approximately.  Then there are those who have expressed that they want to take it off of everything.  I haven’t talked a lot to our caucus to get the feeling, and I can’t speak for the Speaker.  He was on the committee and voted for the initial bill.

    It’s going to be one of the bigger issues on Rev and Tax, but we have to decide which way we’re going to push.  We’ll try to make a decision on which is the most feasible, and that’s what we’ll go with.

    Q:When you say “which way we’re going to push,” do you mean the $100,000 exemption, the $250,000 exemption, or exempting personal property entirely?

    A:Yes, exactly.

    Q:There must be bills floating around for each of those ideas, at this point.

    A:I’m sure there are.  I haven’t seen them yet, but I’m sure there are.  And of course, the $100,000 is already a piece of legislation.  We would just have to tweak it a little bit.

    It’ll be an interesting topic.  I’m much in favor of it.  The counties have a good point.  There are counties that it’s as low as one or two percent of their total budget, but there are counties that are the low 40s, as a percent of their budget, so something is going to have to be worked out.  We can’t just pull that out from under them and leave them to figure it out on their own.

    Q:When you say that you’re in favor of it, do you mean you’re in favor of one of these three options, or is there a particular one that you favor?

    A:I’m in favor of taking as much of the personal property tax off as we possibly can.  I’m not going to come out in favor of one particular thing right at this time, but like I said, I voted for the $100,000 one, so I obviously supported that.

    I’ve been to a number of different meetings over the last couple of months, and I’m sure I’ll be to a few more, from the counties as well as proponents of taking it clear off.  The counties are in favor of it, but they have a big concern about taking the whole thing off.

    With any tax issue that we do, there’s always some type of a shift.  With $18 million, the lower one, that’s not a huge amount when you spread it across the state.  But $140 million — that’s a big hit.

    Q:It sounds like you favor replacement revenue of some sort.  Is that right?

    A:I don’t know that I would say that I am in favor of replacement, but I am in favor of trying to work out something so that those counties that really rely on the personal property tax don’t end up shifting the tax someplace else.  That would defeat the whole purpose of it, in my opinion.  If it got shifted from personal property to property tax, for example.  I am against that.

    Q:In your mind, what would be the options for helping out the taxing districts that are heavily reliant on the personal property tax, apart from just creating a formula for replacing that revenue using state funds?

    A:Well, of course we took the personal property tax off of agriculture a few years ago.  That amounts to about $12 to $13 million a year, and we replaced that.  Of course, if we’re talking about $140 million, the budget has been dramatically reduced over the last couple of years, so there is not $140 million that could be put out to replace the whole thing in the counties.

    I hate being pessimistic, but I feel that – especially with the mess our federal government is in right now – we don’t have the money.  Maybe for the $100,000 or $250,000 exemption, but the total amount?  I don’t see that.  Let’s say it was $140 million over a six-year period — that’s still a hefty chunk of money that would have to come out of the general fund each year.

    Q:You’re saying that’s a conundrum.

    A:Yes, it is.  And that’s what we ‘ll have to deal with.  I’m sure we will work something out, but the particulars of it – I couldn’t say, right now.

    Q:A couple of people  – Alan Dornfest at the tax commission, along with Speaker Bedke – have talked about the importance of clearly defining what personal property is.  Is that something you think you all have to take up?

    A:We had a little bit of that with the last piece of legislation.  That was a problem at that time – defining what is going to be taxed by Idaho and what isn’t.  It’s a huge thing.

    The tax commission is a resource for us.  They’re the ones that enforce our tax laws, so they’re going to have to weigh in a little bit.  They will give us their opinion and we will decide whether we think it’s right or not.  It’ll come down to the legislature deciding what we think is real property and what isn’t.

    Q:There are other issues that are expected to figure heavily this session, like whether to create a state-based health insurance exchange and expand Medicaid.

    A:Well, the health insurance exchange has been something that we’ve been talking about for many years, since long before the Affordable Care Act was put on the books.  I was in favor of it at that time.  Of course, I had an insurance agency for many, many years, and I still have an insurance license.

    The governor has weighed in.  He kind of supports it, I think.  He’s in the same position that we are, in that the rules are being written as we sit here today.  We really don’t know how much control we’re going to have, how much control the federal government is going to have.

    I’m co-chair of the Health Care Task Force.  We had a piece of trial legislation that we passed out of the committee last year, but things changed after we passed that.  A lot more information came out, and it didn’t go anywhere.  It never even got a hearing.

    Q:Was it really that a lot of things changed in that time, or was it just that lawmakers were hoping the Supreme Court would overturn the Affordable Care Act, or the election would overturn it.  Were people just saying, “Let’s see if this whole thing goes away”?

    A:To be honest about it, it’s probably the fact that a lot of us were hoping we’d have a different president.  A lot of us were hoping, first off, that the Supreme Court would do away with the mandate.  So it will be a major issue.

    The Medicaid expansion is not supposed to be tied to that, but in a sense it is, because the health insurance exchange is, in my opinion, a portal to put people in Medicaid.  Basically they would go to the insurance exchange, fill in the information, and if they qualify for Medicaid it just kicks them into Medicaid.  I think that would also be an issue.  Our caucus will have to decide which way we’re going to go.

    Q:Do think there will be an attempt to come to a decision on the Medicaid expansion this session, even though there isn’t the same kind of deadline pressure that we have with the health insurance exchange?

    A:Not as much as there will be with the health insurance exchange.  I do think they’re tied together a little bit, but it depends on how fast things move as far as getting a piece of legislation and moving it through committee.

    The Department of Health and Welfare, in their reports, has been moving along regardless of what we’re doing right now, to try to improvise and put in force what they have to do in order to do it.  And that, again, is a proposition that’s in motion all the time, because the rules are changing all the time.

    Q:What’s your thinking about the Medicaid expansion?  Do you think it’s something the state should do?

    A:Well, the proponents say it looks good on paper.  So much of it hinges on what the federal government will reimburse us for.  Not being one who has a lot of faith in what’s going to happen federally as far as our budget – sure, the piece of legislation says they will reimburse us 100 percent for a certain length of time and then it will go to 90 percent from there.  But it doesn’t take a rocket scientist to figure out how much is going to be transferred back to the Idaho taxpayer, eventually.

    The only other thing we would have a choice on is the type of benefits we would offer.

    Q:Do you mean the state should establish a stripped-down benefits package for people who become eligible under the expansion?

    A:That’s what we’ve always tried to do, even now with the Medicaid packages that we have.  We try to keep it as bare bones as possible, but try to take care of people in a way.

    Because the federal government is paying the major share of it, they control what we do, to a certain extent.  They’re constantly pushing to cover more and more.  It’s a constant thing.  I would like to see as many people insured as possible, but it all costs money, and I don’t see where the federal government is going to come up with the dollars.

    Q:Stepping back, what other issues should we be thinking about?

    A:I haven’t been exposed to anything else big that’s coming down.  I will have a very different committee than what we’ve had over the last few years.  I’ve got a lot of new people. Probably what we’ll do the first week or two is try to get those people up to speed.

    Of course, the gorilla in the room is the budget.  Where are we going to be and what are we going to do?  Things look better, but they’re far from being good.  Far from being good.


    Emilie Ritter Saunders reports:  State Sen. John Goedde is a Republican from Coeur d’Alene. He’s chairman of the Senate’s Education Committee. It’s a panel that will be closely watched during the upcoming legislative session as lawmakers figure out what to do now that voters rejected three sweeping education laws.

    We spoke with Goedde earlier this month to get his take on a few issues sure to be hot topics during the session; education, the personal property tax, and health care. Much as it is annual, Goedde says his number one focus will be watching the budget.

    A:A huge part will be the budget. We’re not living up to our projections from our last budget session. We’re going to have to take a close look at what kind of growth we might expect this time around and be very, very careful. The worst thing we can do, and I understand that now from 12 years of experience, is to over-forecast and then have to do hold-backs mid-term. That’s terrible. We have to deal with the Affordable Care Act, which is Medicaid expansion or not. And the establishment of a state health exchange, or to accept by default a federal exchange. Those issues will be hotly debated, and it will take us a lot of time to get through that.

    Of course the other issue is education. We had sweeping bills that were passed two sessions ago, and were repealed this fall.  There were parts of those bills I believe that can be resurrected and passed again this year. And I think those parts can be done with consensus from at least most parties. So I look forward to that process.  I understand the governor announced the formation of a fairly large committee, which I think will be good to get public input. My concern is, large committees don’t function very quickly. I don’t know that they’re going to have results or recommendations this legislative session.

    Q:Do you feel like this session will be a cooling off period on education, or are there things you need to address right away?

    A:There are some immediate issues that need to be resolved, just to bring us back to the status quo. You’ll see a number of bills that address the use-it or lose-it provisions. The math and science teachers, professional development, and so on. Beyond that, I think there’s an impetus to move forward.

    We’ll identify those parts of reform that we have some consensus on. I believe you’ll see a difference in focus though. You’ll see local districts taking up the torch, either the Idaho School Boards Association or the school administrators. One of the ‘no’ campaign focus, was this was top-down, and there was no local control.  Certainly, we can turn it the other way around – start at a local control standpoint, and come to the same conclusions, or at least partly the same conclusions. I look forward to that opportunity.

    Q:The state has been in and out of court over the last couple of decades over the way schools are funded. There is a new lawsuit working its way through the court system that contends Idaho is shirking its constitutional duty to provide free and uniform public schools. Is Idaho funding education to the best of its ability?

    A:The Supreme Court decision dealt with buildings only. We solved our maintenance and operation issue in the late 80s, early 90s. That solution came from a lawsuit. I guess there are two issues. Since the Supreme Court decision, the Legislature has done some things to try to help those property-poor districts fund buildings. Interest forgiveness, and even partial principle forgiveness for example. I don’t know how much further we can go down that road, unless the state starts to assume building construction. If we do that, my guess is we’re going to develop plain-Jane plans, and this is the building you’re going to get, regardless of the district you’re in. And there won’t be opportunities to enhance that with local money because again, then you’re crossing the line.

    From the maintenance and operations standpoint, we are developing a problem. We’ve allowed districts to supplement what we’re paying them for programs in their districts. Again, those districts that are property-rich, it’s much easier to pass levies to do that. We’re creating an inequity between those that can pass levies and those that can’t. There are property rich districts that can’t pass levies. And I don’t know where that goes.

    We are strained additionally with increases in Corrections and Health and Welfare.  And in my opinion we are using state money as efficiently as we can. We have a constitutional requirement to balance the budget. So, the only other option then would be to raise taxes. When we’re trying to raise ourselves out of a recession, that’s a very hard thing to do.

    There is one hope. Congress is looking at the Marketplace Fairness Act. Legislators from around the country are lobbying in hopes the Senate would move that through. This would be an opportunity to collect sales tax on internet sales – and certainly that would be an additional revenue source for states if Congress will allow it.

    Q:Sticking with education funding, the Legislature attempted to fix funding issues when it replaced funding schools with sales tax dollars, instead of primarily using property tax dollars – did that work?

    A:That goes back to the days of Governor [Phil] Batt. Prior to Governor Batt, local districts were allowed to levy 4 mils for maintenance and operation, that was property taxed based. Governor Batt was able to take one mil off, so there were 3 mils. Then, we eliminated the property tax component in favor of sales tax, which funded most of it. There was still a little bit of a gap there we took from the general fund.

    Q:That was meant to address the inequity, right?

    A:I’m going to answer it from a perception standpoint, because I’m not sure that it did. The perception of the Legislature, and certainly what I heard personally, is the property tax is the most onerous tax the state collected. You pay property tax once, or twice. You pay sales tax whenever you make a purchase. And you have income tax withheld from your paychecks. So it was the perceived biggest hit. It certainly was my impression there was a lot of support for removal for the 3 mils for schools, at the time we did it. There are some segments of our population that say it was a bad thing to do. I’m not sure that’s the case yet.

    Q:What do you have left in the toolbox to make things more equitable?

    A:Well, we started down that road. I believe that digital opportunities are one of the biggest tools, the best tools, to solve inequity problems. Particularly, when you’re looking at opportunities for urban students verses opportunities for rural students. You’re going to have a really difficult time providing a good calculus teacher in every high school in this state. But if you, as a group of districts in southwestern Idaho have done, have one really good calculus teacher in a district that offers then distance education in four other districts.  And a good French teacher in another district, who then offers French classes to five other districts.  That’s an efficiency we’ve got the ability to take advantage of now, if we’ve got the desire to do it.

    The former principal at Notus High School, when he came to the high school, there were three elective classes available for the high school – that’s all, everything else was a requirement. He set up a computer lab and he had 33 classes available the next year.  That’s a huge difference. In urban areas, distance learning offers students the opportunity to take required classes that conflict with electives they’d like to take. You can take an English class at night or early in the morning, whatever your schedule fits. Then take that poetry class or art class that you really have an interest in, when it’s offered. So, there are huge opportunities there if we can get past the perception that we’re replacing teachers with mobile devices.

    Q:So, having schools on board would go a long way in going that direction…

    A:And we have some schools on board. We have schools in this state that have one-to-one laptops, and use them very effectively. We also have schools that educators don’t have the knowledge base to use those devices. So we need to provide more professional development for teachers, so they can really understand what they’ve got. That, I believe will continue to be funded.

    Q:When you’re looking at the budget for next session – do you plan to continue to put money back into education that had been cut over the last few years?

    A:We put back about $30 million into the education budget last year. When the reform bills were originally passed, all the pay for performance money came from salary based apportionment. We said we’d keep the 1.63 percent, but we’re going to replace the rest of that with general fund money. Now that the reforms have been repealed, that money is not available. It will be up to this Legislature to determine what happens with that.

    Q:Any guesses?

    A:I truly don’t know yet. I will say this Legislature is more conservative than the last. And will be very, very careful with their money.

    Q:StateImpact spent a big chunk of the fall reporting on Idaho’s doctor shortage, and some of the contributors to the shortage. One of which is the limited options for medical education in Idaho. I understand there will be a proposal this session to increase the number of medical school seats through the WWAMI program. Would you support that?

    A:There was an effort at one point to look at a medical school for Idaho – and there is no question the WWAMI program is the most efficient use of tax dollars to bring doctors to Idaho. I really support WWAMI. They’ve given us the option of expanded seats, at one point they offered us an option to double our seats. It’s a funding issue – and I hope we can find a way to do that.

    There is another issue, the residency programs. There is more correlation to where a doctor does his residency than where he goes to medical school. Coeur d’Alene is looking at a general practice residency program, and I’m sure they’ll be coming to the state for some funding of that, though a lot of it will be funded locally.

    Q:What do you want to see happen with expanding Medicaid and the health insurance exchange?

    A:I was on the governor’s workgroup on the health exchange. There is still a perception among some people that we don’t have to do anything – that we can just not address the issue, and the exchange won’t happen. That is not the case. Exchanges are coming. The Department of Health and Humans Services last week issued three or four rules, hundreds of pages in preparation for implementation. So it’s going to happen one way or another. I would personally like to see an exchange with as many state-based opportunities as possible. It’s fairly prescriptive. So we don’t have a whole lot of wiggle room.  But any wiggle room we’ve got, I’d like to see exercised here. Our health insurance costs are some of the lowest in the country and our mandated coverage are the fewest — that helps to drive down cost. I’d hate to see us pooled with other states, and then have to bear the burden of costs there.

    Q:Do you think your colleagues will agree with you?

    A:There is a very apparent divide, and I think in both houses, the Senate and the House, on that issue. I think there is probably a greater divide on the Medicaid expansion issue. I’m not privy yet to the information that led the Medicaid work group to make the recommendation they did.

    Q:Do you want to see Idaho’s personal property tax phased out, or eliminated all together?

    A:I think the business personal property tax, is not the tax itself, but the cost of accounting for business personal property and cutting the check. A fairly good sized business owner in my district said it cost him as much in accounting as it was to pay the tax. He was talking in excess of $10,000. So there may be a more efficient way to collect that tax burden. I recognize that local units of governments in some counties and cities rely heavily on property tax. There are some cities where it’s 30 percent of their budget. I don’t see how we can, in any fairness, just eliminate that revenue stream for those local governments. There has to be something there to support them.


    Molly Messick reports:  The Idaho Legislature convenes January 7.  Over the last month, StateImpact sat down with lawmakers to discuss the most anticipated issues of the coming session.

    Rep. Scott Bedke is a rancher from Oakley, Idaho.  He was elected Speaker of the House in December, defeating Rep. Lawerence Denney, who had served in that post for three terms.

    The new Speaker has said he seeks to be a consensus builder, and doesn’t want to lead the House in a top-down manner.  That approach was on display last month, when we began by talking about the likelihood of a state-based health insurance exchange.  Gov. C.L. “Butch” Otter hadissued his cautious endorsement of a state-based exchange a day earlier.

    Q:The governor says he favors a state-based health insurance exchange.  How do you view that recommendation?

    A:That’s a multifaceted question.  Number one: I view my job as Speaker as a guarantor of the process.  In other words, every other person in the House of Representatives is brand new, and I think it’s incumbent upon the leadership offices – whether it’s the Speaker’s office or any of the other leadership positions – to not drive that discourse down into these new legislators.

    I appreciate what the governor has done, and I appreciate his seeming willingness to keep the state’s options open.  Having said that, I don’t view my position as the Speaker of the House to go down and get his votes for him, or to go get any of the proponents’ votes for them, or the opponents’ votes, either.  My job is to ensure that the process works.

    Every one of these legislators represents 47,000 people back home someplace.  And those 47,000 people think that person they elected is the best person to represent their interests in Boise.  It’s incumbent upon me to create a venue where those new legislators can make an informed decision and put their ideas out into the arena of ideas that we call a legislature.  If the ideas grow legs, fine.  And if they don’t grow legs, then that’s got to be fine, too.  And that’s how I view my role.  We don’t want to just listen to a few disparate voices on this subject.  We need to listen to everybody.

    Now, I certainly will have a strong opinion.  I represent 47,000 people, too.  And I’ll make a vote, and at the appropriate time I will speak up.  But I don’t think it’s appropriate for me to do that at the start, particularly given the newness of the Legislature.  I think that’s not my place as a Speaker.

    Q:You’re saying you want ideas to percolate up from your membership, and have the majority vote carry the day.

    A:That’s exactly it.  I think we need to reach a consensus.  In order for any group to reach a consensus, every member has got to contribute.  My role as Speaker is to facilitate a venue where everyone is comfortable laying their cards on the table.  From those collective cards, we find what the consensus of the House of Representatives is, and then proceed forward.

    Q:As you said, you represent 47,000 people out there in your own district.  What do they lead you to think is the best decision?

    A:I think it’s safe to say my constituents are very leery of “Obamacare,” and they are leery of the state entering into obligations with regard to Obamacare.  I think that my constituents are realistic.  I think they understand the difference between the federal government enforcing federal law and the state government being the liaison between the constituent and federal law.

    It plays out in many different venues within my legislative district.  I think we’re marginally better off having a state Department of Environmental Quality that enforces federal laws with regard to air, water quality, those types of things, than having those laws be administered out of Region 10 in Seattle.

    I think my constituents understand the uncomfortable place the state is in.  Obviously, it’s a very Republican district.  They were very supportive of Gov. Romney in his campaign, and they understand that elections have consequences. I think we will all reason together and see what is the best course for the state.  My view will have a Cassia County-Minidoka County color to it, and hopefully that will blend into the rest of the discourse from around the state.

    One of the earliest marketing concepts that’s driven into each of us is that we don’t buy pigs in pokes.  And this has an element of that.  We don’t know exactly what we’re getting into.  We don’t know what all the rules will be.  We don’t know how the rules that are written will be interpreted.  And I think if we read the governor’s statement carefully, you’ll see that he’s very aware of that as well.  In many ways it’s a states’ rights issue.  We need to be at the table.  If no one sits at the table, then there will be no modifications to it.

    You’re getting a stream of consciousness here, and I think that that’s indicative of – we have not made a decision yet.

    Q: So you also have not made a decision at this point?

    A: I think that’s accurate, yes.  I haven’t made a decision at all on this.

    Q:This issue is complicated.  Is the Medicaid expansion discussion even more complicated, because there isn’t, in that case, the pressure of a deadline?

    A:I think that’s accurate.  The few things we do know about the Medicaid expansion: the State of Idaho provides indigent care, and the way we do it now is costly.  The county has part of the responsibility, and the state has part of the responsibility, and it’s costly for taxpayers. If there is a way to do that at a reduced cost to the taxpayers of Idaho, we should be interested in looking at it.  Making no commitments one way or the other, we should vet that issue thoroughly.

    Q:More than one lawmaker has predicted to me that the Medicaid expansion will not win approval, at least in this session.  Do you feel comfortable making a prediction, at this stage?

    A:No.  I don’t think it’s healthy for the Speaker to get out in front of his caucus.

    Q:The business personal property tax is anticipated to be one of the key issues of the session ahead.  How do you expect that debate to proceed in the House?

    A:The business community wants it removed, and the counties do not want that removal to harm them in any way financially.  The state is not flush with money.  If we were, then it would be easy for the general fund to replace that money in the counties’ budgets.  That’s not an option because we don’t have that kind of money.

    So then the next turn will be, “Well, can we do this in some incremental way?”  That’s fine, but this legislative body cannot obligate future legislative bodies.  It’s impossible to predict a timetable that we can absolutely stick to, because we don’t know what the situation’s going to be in 2014 or subsequent years.

    I think, frankly, the state is better off, the business community is better off, our ability to attract and keep new businesses is enhanced without a personal property tax.  It’s just how to change the policy, now, in a way that doesn’t disrupt taxing entities or the counties who are obligated to provide services.  The Legislature is not bashful about telling them what to do, or what services to provide.  If we then remove some of their financial ability to do that, we’ve got to replace that, or take some of that burden back to the state.  That’s why it’s a tougher issue, and that’s why it hasn’t been solved at this point.

    Q:We’re dealing with a budget that has already been strained by the recession.  Does the state have the money to do away with the personal property tax right now?

    A:The short answer is no. Do we have $130 million ongoing that we can just plug into the counties’ budgets year in and year out?  No, I would say that we do not.  Given the budget as presently constituted, I guess you could go in and carve it out.  But that would come at the expense of other government services, and I just don’t see the legislature going there.

    Q:Is there a big business-small business tension in this?  Some will point out that the state could exempt the first $250,000 of personal property from taxation and save a large percentage of businesses in the state from the headache of this tax, while still keeping quite a lot of the revenue. How do you view that?

    A:I’m a big proponent of equal protection under the law.  “Big versus little” should not come into play here.  Having said that, that has never stopped legislative bodies from playing that game.  I suspect that if the past is any indication of the future, we’ll see that rise up again.  But I don’t know that it’s good policy.  I think the more fairly you can treat all players, the better off we are, and the better policy that is long-term.  We ought to be about the business of making our whole tax structure fair, predictable, flat.  And treat all comers exactly the same.

    Having said that, I’ll use an analogy.  If I plant a sapling oak tree next to the house, and I leave it there, and in 30 years it becomes evident that it was a foolish idea to plan the tree that close to the house – if I just hook up to that tree with a bulldozer and pull it out, I will probably do structural damage to the house.  That does not mean that the tree is in the right place or that the tree should not be removed.  I’m advocating a surgical removal of the tree.

    Many counties, all of their finances are heavily dependent on the personal property tax for their budgets.  If we just yank that out, then we will cause problems.  I think we’ve got to do this in a thoughtful way.

    Q:What does that mean, in terms of policy? What is the way that you think works?

    A:Well, there’s probably got to be two prongs to it.  If everything stays equal, then it is a shift.  One set of taxpayers no longer pays it, and a new set of taxpayers then pays it.  We all have our own opinion on whether that’s good policy or not.  I guess it depends on whether you’re in the new set of taxpayers or the old set.

    The personal property tax on farm equipment was removed.  We were able to do that, and the world didn’t come to an end.  That was much smaller in scope, but the principles that drove that decision should drive this.  I think we need to do some definitional changes.  What is personal property?  I think we all understand that in an office setting, the chairs and desks and fixtures are personal property.  But in an industrial setting with specialized equipment, is that equipment personal or is it real?

    Because it was exposed to the same mil rates, we’ve never had to struggle with those definitions until now.  It didn’t make one bit of difference, one way or the other.  Now it does.  I think we’re going to have to agree to definitions first, and that will give us the scope of the financial hole that we need to fill.  Then, we need to methodically dissect this problem. Frankly, we’ve not really done that yet, in my opinion.

    I think that’s in our future, and what little influence I have as a Speaker, I might use that to drive this and get some hard definitions.  See what that’s going to cost, under the new definitions, and go from there.  But it’s an elephant, and we’ve got to eat it a bite at a time.

    Q:Are you advocating a more limited definition of personal property, or are you simply saying that you want lawmakers to sit down and consider that question?

    A:I think that we need to consider that question.  We’ve got a very experienced group of new legislators, many of which have been county commissioners or commissioners on other taxing districts.  They get this.  I’m interested to hear their ideas, because heaven knows this issue could stand a little change-up.  We’ve gone around and around and around on this.  There needs to be something that changes the way we’re viewing this.

    Maybe that comes from the new legislators.  Maybe that comes from a definitional change.  I don’t know what it is, but it seems to me that this is déjà vu all over again.  We’re hearing the same things, and yet there’s been no big game changer here.  “Get on your mark, get set, go!” And we race around the mulberry bush again.  The issue needs some type of a game-changer.

    Q:Based on what you’re saying, it sounds like there’s not a single personal property tax bill that already has a lot of support.

    A:A lot of bills are floating around, and I think that we can use parts of them.  But I think everyone agreeing on what is going to be taxed and what is not going to be taxed is the starting point.  Otherwise, this is too slippery of a subject, and there’s too much money at stake.

    It gives me some pause that the personal property tax roles seem to have ballooned with our discussing this. I think that might come from the phenomenon that if taxing districts think we’re going to replace that in their budget it’s better to have a higher number than a lower number.  Much like if we’re going to enter a weight-loss contest, before we weigh in, it’s okay to drink a lot of water.

    Now, I’m not accusing anyone of gaming any systems, but it seems to me there’s been this, “When in doubt, classify it as personal, because down the road we’ll get more reimbursement.”  That may be a hair unfair, but I think there’s an element of that.

    Q:The other thing I want to talk about is education. What do you anticipate, in terms of policy, given the success of Props 1, 2 and 3?

    A:The ideas there are all across the board.  The legislature fully funded the changes in education law that were overturned in Propositions 1, 2 and 3.  So there’s 40-some odd million dollars of ongoing commitment that the legislature has made that now there’s no accompanying policy.

    This is a competitive environment when it comes to money, and so there are other entities outside of the education arena, outside of the public education arena, that are looking at that money.  That’s to be expected.  If the money is not spent and it’s not put in any other budget, it will just flow through into the public education stabilization fund, which is not all bad because we always can replenish our savings accounts, particularly in public schools.

    There seem to be some common themes that are starting to develop on what the path forward will be with regard to education.  I think there were some things embedded in Prop 1 that, for many legislators, if they are not in there, those will be deal-breakers.  Others feel very strongly about some kind of a pay-for-performance component as well as technology.

    Some of the things that were addressed in Prop 1 are important for me.  I think a locally elected school board should be accorded the same privilege as a legislative body, in that the actions of the 2013 Legislature in no way bind the actions of the 2014 Legislature, or 15, 20 or 25.  Yet we have allowed, in the past, that the actions of one school board have forever bound future school boards.  I think evergreen clauses, some of the issues surrounding tenure — those things need to be included, from my perspective, in whatever bill goes forward.

    Q:So, a bill that would limit union power?

    A:I would call it empowering the local elected school boards to take care of the business end of running the school district.  You cannot have a contract that you can never revisit and properly run a school board from a financial end.  Things change.  We’ve seen that.  We’ve gone through the Great Recession. We’ve had less money, and substantively less.  The state sent less money to the school districts, and they need to be able to react to the economic realities of the day.  You can’t do that by tying their hands, contractually.

    Q:It’s alleged that the state is not meeting its constitutional mandate in terms of funding education.  What do you think about that?

    A:I think that, by and large, we are meeting our constitutional mandate.  What is a thorough education?  If we want to go by test scores, and compare kids’ test scores out of one school district that is a “rich” school district versus one that is a “poor” school district.  I think you’ll see those correlations fall to the side very quickly.

    Money certainly is an important part of the education apparatus, but, like I say, I think that we’re doing a thorough job when it comes to educating our kids, or at least having kids have access to a thorough education.

    Q:Not withstanding the school fees that families and students pay in some districts?

    A:Well, I think there’s a bright line that school districts shouldn’t cross.  But again, that’s the beauty of local control.  If they get too close to this line, then their local patrons need to remind them that the line is there.  I don’t know that that’s a state issue.

    Q:The line being that districts shouldn’t charge for core requirements.

    A:That’s correct.


    Michael Ferguson Reader’s View:  Now that the election is over, we have an answer on the Students Come First laws. Hopefully, we will see a renewed commitment to collaboration among the various stakeholders in this most important of our state’s responsibilities.

    Two critically important issues need to be factored into this discussion: How much of our financial resources are we devoting to the education of our children; and how are we allocating those resources among those children?

    To answer the first question, Idaho is spending less and less on public education. After decades of stable funding at roughly 4.4 percent of Idaho’s personal income, since fiscal year 2000 Idaho has been devoting progressively fewer resources to its public schools — down to just 3.5 percent of Idaho’s personal income in fiscal year 2013. That’s a 20 percent decline in our effort level. It’s also a factor in Idaho’s decline from 48th among states in spending per student in fiscal year 2000 to 50th in 2010.

    To answer the second question, Idaho’s spending on public education is becoming more unequal. In 2006 the Idaho Legislature changed the funding sources for public schools. An equalized property tax levy of 0.3 percent was eliminated, and the Idaho sales tax was increased from 5 percent to 6 percent to bolster the general fund. In theory, the state general fund would now cover the entire cost of a “general, uniform and thorough system of public, free common schools.” Reality is turning out to be much different.

    Since the 2006 funding swap, Idaho’s school districts have dramatically increased their reliance on property taxes. In 2012 voter-approved, unequalized supplemental levies have increased from $140 million to $169 million, a 20-percent increase. The problem is property tax capacity per student varies widely across Idaho’s school districts.

    At the extremes, in fiscal year 2010 property values varied from $4.696 million per student in the McCall-Donnelly school district, to just $153,437 per student in the Snake River school district. A levy of 0.1 percent ($100 per $100,000 of taxable value) would raise $4,696 per student in McCall-Donnelly, while the exact same levy would raise just $153 per student in Snake River.

    Snake River had no property tax levy. It got by with strictly its state allocation of just $5,362 per student. McCall-Donnelly did have a property tax levy (of 0.142 percent) that produced an additional $6,657 per student, giving it a total of $13,208 to spend per student.

    Among Idaho’s largest school districts, the variations are not as dramatic, but no less meaningful. Coeur d’Alene had $889,772 in taxable value per student versus just $261,037 per student in Pocatello. Coeur d’Alene actually levied 0.092 percent and raised $820 per student from the property tax. Pocatello actually levied at over twice the rate of Coeur d’Alene (0.199 percent), but raised less than two-thirds the revenue ($519 per student) from the property tax.

    The widest funding disparity among Idaho’s largest school districts comes more from the willingness of the district’s patrons to tax themselves. Boise had $713,400 in taxable value per student versus $284,477 in Nampa. Boise levied at a rate of 0.428 percent, while Nampa levied only 0.039 percent. Boise had $3,053 in additional funds per student from the property tax, while Nampa had only $110 in additional funds per student from the property tax.

    These are just a few examples of the wide variations in resources available to Idaho school children. The details change from year to year, but the disparities don’t. They remain enormous.

    So ask yourself this: If the Idaho Constitution places a duty on the Legislature “…to establish and maintain a general, uniform and thorough system of public, free common schools” (and it does, in Article 9, Section 1), how’s that going? My answer is not so well.

    Michael Ferguson, a former state economist, is director of the Idaho Center for Fiscal Policy.

    Read more here: http://www.idahostatesman.com/2012/12/09/2374897/idaho-needs-to-honor-its-constitution.html#storylink=cpy

    Idaho Statesman Editorial:  Let’s restate what should be the obvious: Idaho’s schools are hardly flush with money.

    Idaho’s per-pupil spending remains mired at next to the last in the nation, exceeding only Utah.

    The state’s K-12 budget is still struggling to make up ground lost during the Great Recession. The 2012-13 general fund budget for K-12 is $1.28 billion, or $11.8 million less than 2007-08.

    In an attempt to backfill the budgets, school districts have been forced to seek local property tax levies — provided voters are willing to say yes. In many cases, and much to their credit, voters have stepped up. As former state economist Michael Ferguson points out in a Reader’s View today, supplemental levies totaled $169 million in 2012, up 20 percent from the previous year.

    And on Wednesday, even Gov. Butch Otter was forced to fess up. During a speech at the Associated Taxpayers of Idaho’s annual conference, Otter fielded a question from the floor — and from none other than Ferguson. The question: Is Idaho meeting the state’s constitutional requirement to “maintain a general, uniform and thorough system of public, free common schools?”

    Said Otter, “I would say that we’re probably not, but we’re doing the best job we can and we’re going to continue to do the best job that we can.”

    Nowhere does the Constitution suggest grading on effort. But even at that, doing “the best job that we can” should mean Idaho prioritizes public school funding over cynical gambits that use public money to subsidize the private education system.

    One such gambit surfaced during the 2012 legislative session — and could return in 2013. This bill would provide an income tax credit to people and companies who donate to private schools’ scholarship funds.

    It is, pure and simple, a money shift. Every dollar donated under this scheme — every dollar handed back to Idahoans in the form of tax credits — is a dollar that wouldn’t be available to fund state programs. And since K-12 is the single largest recipient of state general fund dollars, it stands to reason that K-12 would bear the brunt.

    The state’s public schools cannot afford this hit.

    Neither can property owners, who would inevitably foot the bill for the Legislature’s “charity.”

    That’s where this shell game inevitably leads. Chip away at state support for K-12, and districts will be left little resource but to go back to the voters, and the unpopular property tax.

    It’s a question of priorities, and what the Legislature does with budgetary breathing room. State tax collections are continuing their gradual rebound — $874.7 million for the first four months of the budget year, up from $842.3 million the previous year.

    Does Idaho use that money to continue to build back the K-12 budget? Or does it use tax policy to foster the privatization of Idaho education?

    Then there is the matter of the Constitution.

    First, there is the constitutional mandate to provide “general, uniform and thorough” public schools. Remember? This is the mandate Otter says the state is “probably not” meeting.

    Second, there is an open question of whether this tax credit plan is even constitutional, or a violation of the Constitution’s ban on putting public money into parochial schools.

    As Senate Education Committee Chairman John Goedde, R-Coeur d’Alene, told the Associated Press: “You can do workaround to the Constitution all you want, and at some point, you destroy the soul of that document.”

    Maybe this “workaround” is constitutional, or maybe not. Two attorney general’s opinions, from 1995 and 1997, reach two differing conclusions. Sounds like this legislation is a test case waiting to happen.

    There is no question, though, about what the Constitution has to say about funding public education. So let’s put our dollars there.

    Read more here: http://www.idahostatesman.com/2012/12/09/2374827/a-tax-subsidy-idahos-schools-cannot.html#storylink=cpy



    Emilie Ritter Saunders reports:  The 2013 Idaho Legislature is ready for business.  Now that the organizational session has wrapped up, and committee assignments have been made, lawmakers will launch into what’s sure to be a packed session one month from today.

    Here’s a list of committee assignmentsfor the Senate.  One of the panels we watch closely is the Joint Finance Appropriations Committee, or JFAC.  That’s the committee that puts together Idaho’s annual budget.

    On the Senate Finance side of JFAC, Sen. Dean Cameron, R-Rupert, will continue to chair the panel.  Although, as the Spokesman Review reports, the Finance Committee has a large number of new members.

    Among them: Sens. Steve Vick, R-Dalton Gardens; Sheryl Nuxoll, R-Cottonwood; Cliff Bayer, R-Boise; Dan Johnson, R-Lewiston; Steven Thayn, R-Emmett; Dan Schmidt, D-Moscow; and Roy Lacey, D-Pocatello.  Sen. Shawn Keough, R-Sandpoint, continues as vice chair; and Sen. Dean Mortimer, R-Idaho Falls, will continue to serve on the panel.

    Vick, a second-term senator, said he’s wanted to get on the joint committee since he arrived in the Senate. “Not everybody likes to do it, because it is a lot of work and a lot of numbers,” he said. “I spent eight years in the appropriations committee in Montana.” Vick said the panel, which writes the state budget, is “the most important committee,” and said his goal there will be to “keep government spending low.” — Eye on Boise, Spokesman Review

    On the House side, 13-term Rep. Maxine Bell, R-Jerome, will continue to chair the Appropriations Committee (that’s the House part of JFAC).

    Here’s a list of all the House Committee assignments.


    Molly Messick reports:  The personal property tax is shaping up to be one of the key issues of the 2013 legislative session.  For years, the Idaho Association of Commerce and Industry has lobbied for the tax to be repealed or phased out.  Lawmakers and Gov. C.L. “Butch” Otter appear to have decided that this is the year to get down to brass tacks.  Counties and cities are pushing back.

    The governor summarized the main questions about getting rid of the personal property tax in an appearance at the Associated Taxpayers of Idaho conferencethis week.  “What is the process that we should use?” he asked.  “Should we take a multiple year approach to it?  Should we replace the funds, and if so, how?  Where is that revenue stream going to come from?”

    If those questions leave you baffled, read on.  This is your guide to the personal property tax in Idaho.


    Local taxing districts collect taxes on both real and personal property.  Real property is, more or less, real estate.  It’s the big, immovable stuff, like land and homes and buildings.

    Personal property, on the other hand, describes the smaller, tangible things we all own.  It’s your furniture, your clothing, your bicycle.  Idaho’s personal property tax only applies to personal property used for business purposes.  A state tax commissionguide describes it this way:

    Taxable personal property consists of items used commercially, such as furniture, libraries, art, coin collections, machinery, tools, equipment, signs, unregistered vehicles, and watercraft. Taxable personal property also includes items used commercially for convenience, decoration, service, or storage. Examples are store counters, display racks, desks, chairs, file cabinets, computers, typewriters, office machines, and medical/scientific instruments.

    Complicating that, Idaho has exempted certain categories of commercially used personal property from taxation.  For example, machinery and equipment used strictly for agricultural purposes are exempt.  The personal property tax also does not apply to livestock, business inventory, and certain hospitals’ medical equipment, among other things.  What’s more, the definition of taxable personal property can vary somewhat from county to county.


    There are three main sources of tax revenue in Idaho: income, sales and property taxes.  There are also more than a dozen smaller tax categories, such as the state’s cigarette, beer and wine taxes.  Nearly all property tax revenue collected in Idaho is collected and spent by local governments.

    Together, Idaho’s income, sales and additional tax revenue totaled more than $3.26 billion in the 2012 fiscal year (which ran from July 2011 through June 2012).  Property tax revenue totaled $1.43 billion in the 2012 calendar year.  With a little math, we can gather that revenue from property taxes comprises about 30 percent of the total tax revenue collected by state and local government.

    Where do personal property tax collections fit into that total tax revenue picture?  In 2012, revenue from the personal property tax totaled $141 million, according to the Idaho State Tax Commission.  That means about 10 percent of property tax revenue comes from the personal property tax.  That’s about 3 percent of total tax revenue collected in Idaho.

    Personal property tax revenue can be considered as a portion of the state and local tax revenue pie.  It can also be considered in the context of state spending on key public services.

    For example, the $143 to $153 million in personal property tax revenue collected this year dwarfs the magnitude of the controversial cut in Medicaid funding authorized by the Idaho Legislature in 2011.  That cut saved the state $35 million in ongoing general fund revenue.  About $1.5 million dollars of that funding was restored in 2012.


    The Idaho Association of Commerce and Industry (IACI) is the most prominent opposition to the personal property tax in Idaho.  The association’s argument centers on the impracticalities of the tax. “It is one of the most difficult to administer and comply with for government and business alike,” reads IACI’s introduction to the personal property tax.

    The association maintains that getting rid of the personal property tax will result in economic growth.  “It is a barrier to economic development,” IACI’s statement about the tax continues, “and studies indicate that the elimination of the tax not only benefits business, but will increase the personal income of Idaho citizens.”

    Many lawmakers and others who favor doing away with the personal property tax say the tax is unfair because it is unevenly applied.  They also note that businesses wind up paying two taxes — sales tax, which goes to state coffers, and personal property tax, which is collected and spent locally — on many of the items businesses use, day to day.


    There are a lot of reasons why doing away with a particular revenue source might produce consternation.  Getting rid of the personal property tax directly affects Idaho’s taxing districts — there are 1,105 of them, and 964 levied property tax in 2012 — by taking away one of their sources of income.

    Property tax revenue, on the whole, made up about a quarter of local government general revenue in 2010.  That average masks a great deal of variation across local taxing districts with respect to personal property tax collections.  Some taxing districts rely heavily on personal property tax revenue, while others take in very little.  The amount depends on the kind of industry that exists within a district.

    Cities and counties have proven to be the most codified opposition to repealing or phasing out the personal property tax.  They claim that, without personal property tax revenue, they will struggle to meet their statutory and constitutional responsibilities.  “Eliminating the business personal property tax without providing replacement funding will shake the foundation of our local communities,” reads a pamphlet created by the Idaho Association of Counties.

    Some lawmakers argue that the personal property tax repeal will come about through a tax shift.  In other words, they say the dollars lost by local taxing districts will have to be replaced with dollars from some other revenue source, such as a reimbursement from state coffers.

    However, Sen. Brent Hill (R-Rexburg) this summer circulated a letter to local leaders suggesting otherwise.  The letter indicates that one proposal under consideration would not reimburse local governments for lost revenue, if the personal property tax is repealed.  Hill’s letter indicates that plan would also prohibit local governments from raising levy rates on real property in order to make up the lost tax dollars.

    Idaho would be in the minority of states if it were to abolish the personal property tax, according to research conducted by the Idaho State Tax Commission.  That research finds that 14 states have done away with the personal property tax, or are in the process of doing so.


    Adam Cotterell reports:  This week we’ve been following a new lawsuit that alleges Idaho is not meeting its constitutional duty to adequately fund schools. Also this week Governor Butch Otter turned heads when he was asked if the state was living up to the constitution in that area.

    “I would say probably not, but we’re doing the best job that we can,” Otter responded.

    Idaho’s constitution requires maintenance of a “general, uniform and thorough system of public, free common schools.” And it gives that job to the legislature. That’s lawmakers like Republican Senator Shawn Keough of Sandpoint, vice chair of the finance committee. Keough says education funding is important to her. We asked her if the legislature is doing its job for schools.

    “I’m not one that says you gotta have X amount of money per student and that makes it OK,” Keough explained. “I used to think it was black and white, and I don’t think that anymore. So, I don’t know the answer.”

    Keough says defining terms like thorough would go a long way to finding the answer. Every time this issue comes up the words of the constitution are scrutinized and debated. And it has come up before.

    In 2005 Idaho’s Supreme Court ruled the legislature didn’t pass muster funding safe buildings. We’ve heard from people this week who say lawmakers haven’t fixed that problem. But senate education chair John Goedde, a Republican from Coeur d’Alene, says they’ve made a lot of progress helping local districts replace old buildings.

    “Interest forgiveness and even partial principle forgiveness for example.” Goedde says. But he adds Idaho is developing another constitutional funding problem.

    “We have allowed districts to supplement what the state is paying them for programs,” he says. “So we’re creating inequity between those that can pass levies and those that can’t.”  

    In 2006 lawmakers changed the funding structure for schools. They switched it from a property tax to a sales tax and dropped a program to send more money to poor districts. Mike Ferguson with the Idaho Center for Fiscal Policy says, since then districts have dramatically increased local tax levies. To show why that’s a problem Ferguson compares two districts, McCall-Donnelly and Snake River near Blackfoot.

    “The variation in their funding capacity is 30 to one,” Ferguson says. “That means it would take thirty times more levying to raise the same amount of revenue in the Snake River District as can be raised in the McCall-Donnelly District.”

    So McCall-Donnelly has more than twice as much money to spend per student than Snake River because of a modest levy.

    Senator John Goedde says he doesn’t know how to fix these inequities because the constitution also requires a balanced budget and the legislature only has so much money to go around. 


    Mike Vogel reports:  The Nampa school district recommends another levy to make up for a shortfall of several million dollars. The district is teetering on the edge of its own financial cliff. That has a lot of parents asking what’s next, and wondering if bankruptcy is a possibility. No school in Idaho has ever declared bankruptcy.

    It’s a word that no one wants to even say out loud. We decided to find out what the worst case scenario for the Nampa School District is. And, could it even file for bankruptcy if it wants to?

    The former chief economist for Idaho says our call prompted him to find out. He says bankruptcy is not an option.

    “A failed school district would be absorbed per instructions from the board of education, into other school districts, and the obligations would then pass on to the district to assume those responsibilities,” said Michael Ferguson, the former Chief Economist for Idaho and current director of the Idaho Center for Fiscal Policy.

    That answer leaves some parents with more questions.The PTA president for Ronald Reagan elementary says parents aren’t sure what to do. but, she says there’s a lot the community can do to get involved and it doesn’t have to just be for attending meetings.

    “Set an outlook calendar, a reminder, check the district’s website, check the meeting notes, if you can do so, attend a meeting, see where they’re at in the decision making process because those crucial votes are going to come. There’s a lot of issues on the table, if you want a voice, make it heard,” said Robin Campagna, PTA President for Ronald Reagan Elementary. 
    She doesn’t blame the school district, but she says parents need more information. She suggested using Skype to broadcast meetings and post more information online.

    The district has explored every option. Everything from cutting salaries to reducing maintenance costs. At this point it’s unclear what the district will do.

    The state board of education also says, it’s unclear if a school could declare bankruptcy. If it did, it’s most likely the state schools superintendent would step in.


    Molly Messick reports:  Gov. C.L. “Butch” Otter said today that he expects a difficult legislative session.  He spoke at the Associated Taxpayers of Idaho’s annual conference.  The session will be a hard one, Otter said, “because of the decisions we have to make.”

    The governor discussed what’s ahead for state education policy, given that votersresoundingly rejected the package of laws known as Students Come First.  He predicted that elements of the failed laws will come back for consideration in 2013.

    Gov. Otter also touched on the health insurance exchange and Medicaid expansiondecisions that the state now faces, as well as the issue of personal property taxes.  “I understand the plight of the counties,” the governor said, while indicating that he supports efforts to cut or phase out the tax.  Some local taxing districts rely heavily on personal property tax revenue.  

    Here’s a recording of the governor’s full remarks:

    The most interesting moment of Gov. Otter’s talk may have come during the brief time allotted for questions.  Mike Ferguson, the governor’s former budget director, stood up and asked whether the state is meeting its constitutional requirements with respect to education funding.

    Ferguson now heads the Idaho Center for Fiscal Policy, and this spring authored a comprehensive report analyzing more than 30 years of state education funding.  The Idaho Supreme Court found in 2005 that the state was not meeting its constitutional requirements.  A recently filed lawsuit raises the question again.

    Ferguson’s question begins at 22:30 in the above recording.  It’s hard to hear, but this is what Ferguson asks: “Do you believe that the state of Idaho is maintaining a general, uniform and thorough system of public education, and, if so, how do you square that with the dramatic increase in unequalized property taxes to fund public schools in Idaho?”

    The notable part of Gov. Otter’s response comes at the very end.  “I would say that we’re probably not, but we’re doing the best job that we can.  And we’re going to continue to do the best job that we can.”


    Adam Cotterell reports:  A group of parents filed a lawsuit in October over fees in Idaho schools. They say charging fees for classes like science or art violates the state constitution. But to take on the state to change the education system they needed the right lawyer. They found Robert Huntley. 

    “Well, my first thought was here I go again charging at windmills,” Huntley says. He spent more than 15 years charging at one particular windmill. In 1990 Huntley took a case in which several school districts challenged the constitutionality of Idaho’s school funding mechanism.

    He corrects himself. “It isn’t a windmill. It’s a labor of love so to speak.” A labor of love he says, because he didn’t get paid for much of the work he did on that case. And it’s not a windmill because that implies the problems surrounding school funding aren’t real or solvable, a reference to the book Don Quixote.

    A mountain might be a better analogy. Huntley’s office walls are covered with pictures of him on mountain climbing trips. You can see a much younger Huntley grinning with Mount Everest looming behind him. The 80 year old long ago gave up climbing physical mountains. But he did succeed in his longest legal summit. He won the case over school funding, several times in fact as it bounced from court to court. One of those courts belonged to district judge Deborah Bail.

    “I ruled that the current system for educational funding was unconstitutional,” explains Bail, “in that it did not allow the local districts to fulfill their obligation to provide safe buildings.”

    Idaho’s Supreme Court upheld Bail’s ruling in 2005. Huntley, a former state Supreme Court judge himself, says that lawsuit started as a challenge to the entire funding structure. But after years in court it was narrowed to building funds. Huntley says that was easy to prove.

    “We had a building in Pocatello where the foundations had eroded away and you climb in the basement and you can climb out through the wall,” he says.

    That case wasn’t isolated. In the same time period many states faced similar lawsuits over school funding. The same year as Huntley’s victory in 2005, Montana’s Supreme Court ruled its legislature was not meeting its constitutional requirement to fund schools. A case in Washington State wrapped up earlier this year with a similar decision.

    Huntley’s current case began as a challenge to class fees. Now there’s a second complaint which looks a lot like the case Huntley started on in 1990. It’s a broad challenge to the way the state funds schools.  Huntley says a new suit is needed because schools are still dangerously underfunded.

    “Everyone pretends that Supreme Court Decision in 2005 never happened,” he says, “Yes things have changed. They’ve changed for the worse.”  

    The head of the Idaho Center for Fiscal Policy says the state has cut as much as $300 million in education funding in the last dozen years. Mike Ferguson is not involved with the case, but he has researched school funding since he left his job as the state’s chief economist two years ago.

    “It matters a lot where a child lives what kind of resources are available to fund their public education,” Ferguson says.

    Ferguson says as the state has cut school funding, voters in local districts have dramatically increased the amount they’ve taxed themselves. Those local levies are based on property taxes. So areas with valuable property have a lot more money to spend.

    “The poorer districts that don’t have that resource are finding it nearly impossible to fund a healthy education system,” he says.   

    Ferguson says from an economist’s perspective the state doesn’t seem to be meeting its constitutional requirement to maintain a “uniform and thorough system of public, free common schools.” That’s the constitutional article the Supreme Court and district judge Deborah Bail said the state was violating by not providing enough funding for safe schools. Bail says she’s seen no evidence that the problem has been fixed. And she did put a system in place to fix it.

    “I had appointed a master to survey Idaho schools and then make recommendations as to which schools were in gravest disrepair, and what would be needed to address that,” she says. “And that process began and then was halted.”    

    Five years ago, the state asked the Supreme Court to toss out Bail’s plan. The court did while reaffirming its 2005 ruling that the system to fund schools was unconstitutional. But the justices said it was not the court’s job to tell the legislature what to do.

    Compare that to Montana. When its Supreme Court declared school funding unconstitutional it ordered the state legislature to fix the problem and told them how to do that. Idaho’s justices on the other hand wrote “We are firmly convinced the Legislature will carry out its constitutional duties in good faith and in a timely manner.”


    Idaho Constitution

    Credit openlibrary.org

    But Robert Huntley says lawmakers won’t fix the problems on their own. “[The court] trusted the legislature would take appropriate action but that trust has been abused.” That’s why, he says, he’s taken this new case challenging the school funding system.

    Our efforts to speak with lawmakers about this have so far been unsuccessful. But Wednesday Idaho Governor Butch Otter spoke to a large group about the coming legislative session. Otter took questions afterward and Mike Ferguson asked if Idaho was meeting its constitutional obligation to fund schools. After nearly three minutes talking about connecting rural schools through the internet, Otter finished his response this way.

    “I would say, we’re probably not but we’re doing the best job that we can.”

    Meanwhile 80 year old Huntley says he probably doesn’t have enough time to fight another lengthy battle. He’s asked a court for a summary judgment: a ruling in his favor without a trial based on the 2005 decision. A district judge could take that up next month. This time Huntley hopes judges won’t leave it to the legislature. He wants the court to craft a system to fix Idaho’s school funding problems.


    Betsy Russell reports:  When Gov. Butch Otter asked for questions at the end of his luncheon speech to the Associated Taxpayers of Idaho today, the first one came from former longtime state chief economist Mike Ferguson. “Do you believe that the state of Idaho is maintaining a general, uniform and thorough system of public education?” That’s the standard required by the Idaho Constitution. “And if so,” Ferguson asked, “how do you square that with the dramatic increase in unequalized property taxes to fund public schools in Idaho?”

    Otter first said, “I’m not prepared to answer that question, to be quite frank with you.” He noted the “rural nature of the state,” and how that’s led to differing course offerings in remote school districts, vs. more urban ones. Otter also said he thought the Idaho Education Network was helping with that, by offering distance education to remote rural districts.

    “I would say we’re probably not, but we’re doing the best job that we can, and we’re going to continue to do the best job that we can,” the governor said.


    Betsy Russell reports:  Gov. Butch Otter, in his luncheon address to the Associated Taxpayers of Idaho today, challenged county commissioners to bring him a list of state-mandated services they provide that they’d like to do away with. “I’d be remiss if I didn’t open the floor to the question of what are we going to do about personal property taxes,” including proposals to eliminate them. “I’ve made no mystery of the fact that I’ve been a supporter of that,” Otter said, “but I also understand how 44 counties … the question is always what are you going to do with that share of our budget which we get in our counties from personal property tax, and I said frankly I don’t know.” He said, “I want to engage in those discussions.”

    He said the budget will be challenging in the upcoming legislative session, and the latest tax revenue figures are forcing a downward revision in projections. “I will tell you we do not have a placeholder for $130 million in that budget,” to offset elimination of the personal property tax. “We will have those discusssions, and I hope that we can come up with a plan. … I understand the plight of the counties, when it represents in some counties upwards of 35 percent of their budget.”

    Otter said two years ago, he asked for a list of “those things which you think you can do without in your county that we mandated, and I’ll be your champion to get rid of those services, to stop those services and to relieve you from that financial burden, because I understand that. But I have yet to see the list.”


    Betsy Russell reports:  Idaho needs to invest $5.2 million for a major computer upgrade in its tax collection system, state tax officials say, and it’ll pay off big not far down the road.

    The upgrade, which state tax commissioners plan to pitch to lawmakers in January, could pay for itself within its first full year of operation, officials estimate, by allowing the state to better pursue fraudulent returns and tax lien debt.

    The proposal comes as the state’s four-member Tax Commission has been working to boost public confidence and employee morale, two years after a former director resigned amid scandal and charges that the commission was cutting secret deals with influential taxpayers. Current Chairman David Langhorst, a Democrat, said the commission is working toward “a more open and transparent way of doing business, and better communication within our own ranks.”

    A longtime state tax auditor filed a 17-page whistleblower report in 2008, and in 2009, the Legislature unanimously passed a new law to end the practice of a single tax commissioner approving secret deals to excuse all or part of taxes owed. That law required at least two commissioners to sign off on settlements over $50,000, though the whistleblower, Stan Howland, said it didn’t fix the problems.

    Langhorst said the commission has far exceeded that law’s requirements. “We assure that all four commissioners sign off on every decision and every settlement, regardless of size – even if they’re $50,” he said.

    Plus, he said, “We engage the audit staff more – we encourage discussion between policy people and our auditors.”

    Commissioner Tom Katsilometes said, “It really helps all of us understand each of the cases.” He said it also assures the commission’s auditors “that they know that we’re looking at these cases seriously and in-depth – we’re not just arbitrarily deciding them. … We’re not bypassing their work.”

    A 2010 lawsuit filed by Rep. Shirley Ringo, D-Moscow, charged that influential taxpayers were getting reductions in their taxes over auditors’ protests, and confidentiality rules prevented the public from finding out. The lawsuit was dropped in 2011, after then-Tax Commission Chairman Royce Chigbrow resigned.

    In connection with the lawsuit, numerous whistleblowers stepped forward with allegations similar to Howland’s.

    Langhorst, speaking at the commission’s annual meeting Tuesday, said things have improved since then. “Don’t take my word for it – if you know a Tax Commission employee, just ask ‘em,” he said.

    Over the past three years, a compliance initiative that added auditors allowed the commission to collect $52 million in taxes that were owed, but weren’t being collected.

    Now, the computer upgrade could boost that, officials say.

    “The problem is that our software is based on 10-year-old technology,” said Doreen Warren, revenue and operations division administrator.

    While fully replacing the system used for processing 2.3 million tax returns, payments and other transactions a year would cost $25 million, the upgrade the commission is proposing would cost $5.2 million, and in its first year of full operation, could bring in between $2.6 million and $6 million in additional collections.

    Tax Commissioner Ken Roberts said, “Idaho needs to be proud of our tax system.”

    Warren said if the computer system, known as GenTax, isn’t upgraded and modernized, it will become increasingly difficult to maintain and could hamper tax collection efforts.

    The request for funding will go to lawmakers and Gov. Butch Otter for possible inclusion in the fiscal year 2014 state budget, which will be set in the legislative session that convenes in January. The new system would take 18 months to reach full operation.


    Now that the election is over, we have an answer on the Students Come First laws. Hopefully we will see a renewed commitment to collaboration among the various stakeholders in this most important of our state’s responsibilities.

    Two critically important issues need to be factored into this discussion: How much of our financial resources are we devoting to the education of our children; and how are we allocating those resources among those children?

    To answer the first question, Idaho is spending less and less on public education. After decades of stable funding at roughly 4.4 percent of Idaho’s personal income, since fiscal year 2000 Idaho has been devoting progressively fewer resources to its public schools — down to just 3.5 percent of Idaho’s personal income in fiscal year 2013. That’s a 20 percent decline in our effort level. It’s also a factor in Idaho’s decline from 48th among states in spending per student in fiscal year 2000 to 50th in 2010.

    To answer the second question, Idaho’s spending on public education is becoming more unequal. In 2006 the Idaho Legislature changed the funding sources for public schools. An equalized property tax levy of 0.3 percent was eliminated, and the Idaho sales tax was increased from 5 percent to 6 percent to bolster the general fund. In theory, the state general fund would now cover the entire cost of a “general, uniform and thorough system of public, free common schools.” Reality is turning out to be much different.

    Since the 2006 funding swap, Idaho’s school districts have dramatically increased their reliance on property taxes. In 2012 voter-approved, unequalized supplemental levies have increased from $140 million to $169 million, a 20 percent increase. The problem is property tax capacity per student varies widely across Idaho’s school districts.

    At the extremes, in fiscal year 2010 property values varied from $4.696 million per student in the McCall-Donnelly school district, to just $153,437 per student in the Snake River school district. A levy of 0.1 percent ($100 per $100,000 of taxable value) would raise $4,696 per student in McCall-Donnelly, while the exact same levy would raise just $153 per student in Snake River.

    Snake River had no property tax levy. It got by with strictly its state allocation of just $5,362 per student. McCall-Donnelly did have a property tax levy (of 0.142 percent) that produced an additional $6,657 per student, giving it a total of $13,208 to spend per student.

    Among Idaho’s largest school districts, the variations are not as dramatic, but no less meaningful. Coeur d’Alene had $889,772 in taxable value per student versus just $261,037 per student in Pocatello. Coeur d’Alene actually levied 0.092 percent and raised $820 per student from the property tax. Pocatello actually levied at over twice the rate of Coeur d’Alene (0.199 percent), but raised less than two-thirds the revenue ($519 per student) from the property tax.

    The widest funding disparity among Idaho’s largest school districts comes more from the willingness of the district’s patrons to tax themselves. Boise had $713,400 in taxable value per student versus $284,477 in Nampa. Boise levied at a rate of 0.428 percent, while Nampa levied only 0.039 percent. Boise had $3,053 in additional funds per student from the property tax, while Nampa had only $110 in additional funds per student from the property tax.

    These are just a few examples of the wide variations in resources available to Idaho school children. The details change from year to year, but the disparities don’t. They remain enormous.

    So ask yourself this: If the Idaho Constitution places a duty on the Legislature “…to establish and maintain a general, uniform and thorough system of public, free common schools” (and it does, in Article 9, Section 1), how’s that going? My answer is not so well.

    Michael Ferguson, a former state economist, is director of the Idaho Center for Fiscal Policy.


    Louis Jacobson reports:  Many of the results on Election Night fit comfortably with expectations about how voters in certain states tend to vote. But the evening also delivered results that were a bit more surprising.

    Labor unions, for example, chalked up big wins in deep red Idaho and South Dakota. Voters in fiscally conservative Alabama easily reauthorized funds for environmental protection. Liberal California rejected labeling requirements for genetically modified foods. Oregonians broke with their peers in Washington state and Colorado by rejecting a marijuana-legalization initiative. And voters in North Dakota passed a smoking ban more typical of big cities.

    Looking more closely at each of these five examples reveals logical reasons for why voters in these states acted the way they did. Collectively, these examples suggest a few factors that can make an issue campaign successful (or unsuccessful) even in the unlikeliest of places.

    Here are brief analyses of what went down on Election Day.

    Failure of education reform in Idaho and South Dakota

    The education reform movement tried to make headway in two solidly conservative states in 2012, but it ran into trouble amid opposition from teachers’ unions.

    In South Dakota, teachers’ unions managed to secure a popular vote on a law proposed by GOP Gov. Dennis Daugaard and passed by the Legislature that would have established merit bonuses, implemented teacher and principal rating systems, and curbed teacher tenure. By a two-to-one margin, South Dakotans voted to reject the law.

    Meanwhile in Idaho, voters weighed a trio of ballot measures that amounted to an even more far-reaching reform agenda. Each sought to overturn a law backed by Republican Gov. Butch Otter and approved by the Legislature in 2011. Collectively, the enacted laws would have shifted control to local officials, curbed tenure and collective bargaining rights, instituted a merit pay system, and spent money on technology and online teaching. Each of these laws was soundly rejected, with between 57 and 67 percent voting against them.

    In South Dakota, those opposed to the law tapped into concerns that pitting teachers against each other to claim bonuses would harm the collaborative atmosphere in schools. According to a lobbyist in Pierre, there was also some concern that the new laws might raise costs.

    The price tag was an even bigger concern in Idaho, particularly plans to give each high school student a laptop. Union adsdepicted kids ruining their state-funded laptops, suggesting costs would rocket out of control.

    But the laws were in trouble even before that, sources in the state said, because they were closely tied in the public mind to Tom Luna, the state’s elected superintendent of public instruction, who has high negatives with many voters despite his GOP affiliation.

    In both states, the opponents’ sizable war chests helped stir residents’ latent worries about the laws. While New York CityMayor Michael Bloomberg gave at least $200,000 to support the Idaho measures, the National Education Association sent $1 million into the state and its state affiliate spent another $280,000. In South Dakota, the NEA gave almost $525,000.

    Jason Richwine, a senior policy analyst with the conservative Heritage Foundation, said the challenge in cases such as these is to spread a message that’s persuasive enough to overcome voters’ deeply ingrained respect for teachers.

    “The trouble is that what is rapidly becoming the consensus among reformers is still largely unknown to the public,” Richwine said. “Even though states like Idaho and South Dakota may not be friendly to explicit appeals for more union power, citizens there are likely to hold conventional beliefs about education policy — that more money is always good, that teachers can’t be evaluated by a computer and so on. The challenge for reformers is to get the facts about education policy out to the public in a way that can adequately counteract unions’ appeal to intuitive-but-wrong ideas about how to reform education.”

    Failure of a California measure to require the labeling of genetically modified foods

    California Proposition 37 would have required labeling food made from genetically modified (GMO) plants or animals and prohibited labeling or advertising such food as “natural.”

    In liberal, health-obsessed California, a late-September Los Angeles Times poll found Proposition 37 ahead by a two-to-one margin. But just six weeks later, it failed to pass, with 52 percent voting against it.

    What happened?

    One factor had to do with the measure’s seeming inconsistencies, said Garry South, a Democratic consultant in the state. The proposition included multiple exemptions — food that is certified organic, food that includes GMO material unintentionally, animals raised on GMO feed, food with small amounts of GMO material, meals sold in restaurants and alcoholic beverages.

    “It was written to maximize the coalition that would support the initiative, not so that it would make overall sense,” South said. Questionable wording and parameters were cited as factors in newspaper endorsements that weighed against the measure, including by the Los Angeles Times and the San Francisco Chronicle.

    A concerted and deep-pocketed campaign by the opposition was also a crucial factor in torpedoing the measure. According to California Watch, major food producers spent $44 million on the effort to derail Proposition 37, compared to $7.3 million for the campaign backing the measure. Monsanto, DuPont, PepsiCo, Nestle, ConAgra, Coca-Cola and General Mills were among the companies to fund the opposition, which had a compelling case to offer many voters: “The most effective argument against it is that it would raise food costs, in a state that just experienced its first $5-a-gallon gasoline,” South said.

    Passage of a measure to ban smoking in North Dakota

    Bans on smoking in public places are most closely associated with big cities and their liberal elected officials. Now, thinly populated, conservative North Dakota has made the leap as well.

    It passed the Initiated Statutory Measure No. 4 by a two-to-one margin, prohibiting smoking in public places and most places of employment in the state, including certain outdoor areas.

    Groundwork laid by a 2008 ballot measure became a major factor in th measure’s victory. In 2008, Measure 2 passed with 54 percent of the vote. It established a committee to develop and fund a statewide tobacco prevention and control plan, and it created a tobacco prevention and control trust fund to receive tobacco settlement money.

    The infrastructure created by the 2008 measure enabled outreach to North Dakotans on the dangers of smoking, said Donna Thronson, health communications coordinator for the North Dakota Center for Tobacco Prevention and Control Policy, a government entity created by the 2008 measure.

    “We reach every local public-health unit in all counties,” Thronson said. “Because of this strong outreach, local public-health units are able to organize grassroots coalitions that are really the ones that put forth the initiated measure.”

    Rudie Martinson, executive director of the North Dakota Hospitality Association, which opposed to the 2012 ballot measure, acknowledged that the legacy of the 2008 measure made this year’s proposed ban hard to beat. The “anti-smoking bureaucracy,” Martinson said, “gets a great deal of money to push changes like this one.”

    Simply put, “most people looked at the measure, agreed that smoking was bad, and voted ‘yes.’”

    Passage of a long-term reauthorization of a land conservation measure in Alabama

    In solidly conservative Alabama, voters don’t generally like spending money, especially on environmental protection. Yet a measure to do just this passed by a resounding, three-to-one margin on Election Day.

    Voters approved a Legislature-referred measure to extend payments to the Forever Wild Land Trust for the next 20 years. The trust, created in 1992, funds the acquisition of land for conservation and recreation by allocating a portion of the investment income from royalties from natural gas companies drilling in state waters. The royalty fund currently holds $2.5 billion in principal; the Forever Wild program takes 10 percent of the annual investment income, up to a maximum of $15 million a year.

    Since its creation, the program has enabled more than 227,000 acres to be set aside for recreation areas, nature preserves, state parks and wildlife management areas. Notably, the measure attracted such diverse supporters as the National Rifle Association and the Sierra Club, as well as many business groups and the League of Women Voters.

    The fund has made possible “activities ranging from hunting and fishing to bird watching, mountain biking, canoeing and many others,” former Republican state Sen. Bradley Byrne, an unsuccessful candidate for governor in 2010, wrote in an op-ed endorsing the measure. Byrne stressed that the program was fiscally responsible, drawing its funds not from taxpayers but from “a depleting natural resource.”

    Richard Fording, a University of Alabama political scientist, said that both of Byrne’s arguments melded nicely for voters in the state.

    “The Forever Wild Program does not use money from state tax revenues, so between that and all of the hunting and fishing enthusiasts who support the mission, it passed easily,” Fording said.

    Failure of marijuana legalization in Oregon

    This year’s election was a landmark for marijuana legalization efforts. Rather than just managing to pass measures that legalized marijuana for medical purposes, two states — Colorado and Washington state — approved measures that effectively decriminalized marijuana for recreational purposes, even for people without a medical justification.

    But voters in Oregon — where the public is considered at least as liberal as voters in Washington state, and more liberal than those in Colorado — rejected a measure that would have decriminalized marijuana for recreational use. The measure attracted only 47 percent support.

    A key difference in the initiatives was that those in Colorado and Washington state were backed by the pro-legalization “establishment” while the Oregon measure was not.”Early polling showed little support for full legalization in Oregon, so the big reform money stayed out,” said Mike Riggs, who writes about drug policy for Reason, a libertarian magazine. “Overhauling a law requires a campaign strategy and money, and if you don’t have the Drug Policy Alliance or the Marijuana Policy Project on your side — both of which stayed out of Oregon — you don’t have a chance. Those two groups have money and knowledge. They know how to run campaigns and how to sell the issue, and they play a very long game.”

    Substantively, the Oregon measure was also more far reaching than those in Colorado and Washington state, a fact that likely spooked some voters, observers in the state said.

    As ABC News reported, the Colorado and Washington laws empower state boards to license, regulate and tax the commercial marijuana industry. By contrast, Oregon’s measure would have had the state buy marijuana from licensed sellers and processors, then package it, label it with a potency grade and sell it to customers for a profit.

    Further raising concerns for some voters was the pedigree of the main sponsor of the law, Paul Stanford. He runs the Hemp and Cannabis Foundation, a chain of clinics where doctors write prescriptions for individuals who say they need medical marijuana. Some media reports have raised questions about Stanford’s business history, though others applaud his practices. There was also concern that the measure could have increased Stanford’s already significant foothold in the state’s marijuana market.

    Earlier in the year, a second legalization measure in Oregon failed to qualify for the ballot; it had received more mainstream support, including nearly half a million dollars from the Austin-based Foundation for Constitutional Protection. If it had made the ballot, observers say,

    it might well have passed muster with voters.

    “It’s widely expected that a simpler, cleaner measure would be likely to pass in the near future,” said David Sarasohn, a political columnist with The Oregonian.

    And for Oregon, the “near future” could come as soon as 2014.


    Adam Cotterell reports:  Idaho’s Department of Education says the repeal of the Students Come First education laws means a $23 million cut for the state’s schools. It took the department time to come up with that number after voters rejected the laws early this month through ballotpropositions 1, 2 and 3. Then school districts had to figure out what it means for their budgets.

    For most districts the biggest impact comes with a catchy name; use it or lose it. That’s budget speak for money the state gives districts to hire teachers. If a district doesn’t hire enough teachers it gets less money. That’s how it was before the Students Come First laws and that’s the law again. But for the past year and half districts have been allowed to hire fewer teachers and pocket some of that money.

    “We used those dollars to balance the budget,” says Alex Simpson, finance director in Meridian, Idaho’s largest school district.  In 2008 Meridian got about $200 million from the state.

    “Last year I believe we were at about 160,” Simpson says. “So we’ve cut over $40 million out of the budget.”

    Simpson says that use it or lose it money came in handy backfilling a little from those years of cuts. But now it’s headed to a state rainy day fund and not into district accounts.  And there’s other money that’s not coming to the districts, like for classroom technology. There is some money the laws took away that now comes back. But altogether Simpson calculates about a $4 million loss for Meridian, or about 2.3 percent of the district’s total budget. Simpson says that won’t be easy for Meridian.

    “Tough times for the rest of this year and it’d be a tough year next year,” he says. “You would have to start looking at what you would do to save money, period.”  

    But not all districts are in the same boat. Mike Chatterton is business manager for the Blaine County School District, home to Sun Valley, Ketchum and Hailey.

    “It’s not going to change any kind of direction that the Blaine County School District is headed,” Chatterton says. “And it won’t have material impact on anything that we’ve got going now.”

    Blaine County has more teachers than the state minimum so use it or lose it is not an issue. That’s because Blaine County has levies in place that allow it to get more money from local taxpayers than from the state. Chatterton says his district is fortunate.

    “A lot of these state funding cuts over the past several years haven’t had a detrimental impact to us like it has 95 percent of districts in the state,” he says.

    Blaine County will lose some technology money but, Chatterton says that’s easily absorbed by district rainy day funds. A few districts are in even better shape when it comes to the repeal. Boise stands to gain more than half a million dollars. But Boise and Blaine are outliers.

    Most of the state’s school districts are in the same position as Meridian. But Meridian won’t make any cuts yet. They’re waiting to see what the legislature does in January.  Lawmakers could send some or all of the money to districts. Or they could leave it in the rainy day fund where it went after the repeal; a fund that’s been seriously depleted in the last few years.


    Melissa Davlin reports:  This week, Magic Valley lawmakers are gearing up for the legislative session by visiting with local government officials and Chamber of Commerce members.

    Legislators will meet with the Twin Falls City Council tonight to discuss issues likely to come up that may affect the city.

    On the table: A personal property tax repeal.

    Personal property tax is paid by businesses owners on moveable property, such as equipment, shelves and furniture. Lawmakers like Rep. Stephen Hartgen, R-Twin Falls, say it is especially burdensome for small business owners. But the Legislature also has to remember that the tax provides a key revenue source for some cities, counties and other taxing districts, Hartgen noted.

    “The trick with that is to not front-load it” by giving benefits to business owners without generating money necessary to run local government, Hartgen said

    In 2012, the city of Twin Falls collected $954,953 in personal property taxes, nearly 6 percent of its property tax collections. With Chobani coming to town, that amount will go up.

    Twin Falls City Councilman Shawn Barigar said he is interested to hear legislators’ take on the state budget.

    Both Barigar and Hartgen said the local option sales tax will likely come up. A local option tax allows cities to add an additional sales tax within city limits. Currently, resort towns are the only Idaho cities allowed to do so. Twin Falls has long pushed for the authority to raise sales taxes within city limits.

    Hartgen, who is opposed to local option sales tax, said cities have other means to raise revenue for needed projects, such as bonds, and that an increased sales tax may drive business to neighboring counties.

    Barigar disagreed.

    “The toolbox is pretty light on what we can do locally to address those needs,” Barigar said.

    This week, legislators are likely to discuss upcoming health-related decisions, Hartgen said, such as whether to expand Medicaid and establish a state-based insurance exchange, as well as what to do with education after voters struck down Propositions 1, 2 and 3.


    The Twin Falls City Council meets with lawmakers at 5 p.m. today at the Twin Falls City Council Chambers, 305 3rd Ave. E. in Twin Falls.

    On Wednesday, lawmakers are meeting with the Twin Falls County commissioners at 4 p.m. at the Twin Falls County Courthouse, 425 Shoshone St. N.

    On Thursday, lawmakers tour Canyon Ridge High School at 9 a.m., then meet with Twin Falls Area Chamber of Commerce members for lunch.

    All meetings are open to the public. RSVP is required for the Thursday Chamber event; call 733-3974.


    Maureen Dolan reports:  The need to ask voters to approve a supplemental levy early next year and a looming $3 million budget shortfall have Coeur d’Alene school board members and the district’s administration taking a harder than usual look at the district’s finances.

    Trustees met Monday for a workshop to acquaint the board’s newest members, Jim Hightower and Ann Seddon, with the budget and the budgeting process as they begin considering how much money they will ask voters to approve at the polls.

    “Are there areas in there that we can find maybe a new way of looking at things that free up some revenue to allow us to perhaps look at a reduction in a supplemental levy amount?” said board chair Tom Hamilton.

    The district’s $60.2 million annual general fund budget includes $12.9 million in property taxes representing one year of a two-year supplemental levy voters approved in 2011. That levy expires at the end of June. Voters will be asked to approve a replacement levy in March, and between now and January a levy amount must be determined.

    Voter-approved supplemental levies are in place in districts throughout Idaho, and are used to fill the gaps between state funding and the cost of running school districts.

    The Coeur d’Alene district relies on levies to pay for student activities and athletics, salaries for teacher aides and other support staff, and various programs for academically advanced learners and those who are struggling.

    The funds from these supplemental levies can only be used to support a school district’s maintenance and operations costs. They cannot be used to build or make major renovations to school facilities, so districts must ask taxpayers to support other ballot measures if they need to go into debt to finance buildings. The funds from the $32.7 million bond Coeur d’Alene voters passed on Aug. 28 can only be used on the building projects it was requested for. No part of those funds can be used on any school operations costs.

    This upcoming supplemental levy campaign will be the first for all the trustees now sitting on the board. Hamilton and Terri Seymour took office after the 2011 levy election and Hightower and Seddon were just appointed this year. The five-member board is down a member since Trustee Jim Purtee’s Nov. 15 resignation. They hope to have a new trustee appointed by January.

    The $3 million shortfall the district is facing exists because those funds originally came into the district’s budget as one-time federal stimulus dollars.

    Superintendent Hazel Bauman said the $3 million gap will remain even if the $12.9 million supplemental levy is replaced at the same level.

    “If we were to reduce the supplemental levy by $1 million, there would be a $4 million shortfall. If we were to reduce the supplemental levy by $2 million, it would be a $5 million shortfall,” Bauman said. “So we need to be really cognizant of that by balancing the needs of the district with the needs of the taxpayers.”

    Bauman said district taxpayers have always been supportive. She pointed to the $12.9 million per year that voters approved in 2011. That amount includes a $5 million annual increase over the levy it replaced. Voters approved a facilities levy to build KTEC, the new professional-technical high school on the prairie. The taxpayers agreed at the polls last summer to finance a $32.7 million bond to renovate five aging schools and modernize the infrastructure of schools throughout the district.

    “Our community continues to amaze me. Their largesse and their support of our school system is beyond anything I could have ever dreamed about … Having said that, I don’t think it’s an infinite wealth,” Bauman said.

    During Monday’s workshop, Hamilton said the supplemental levy currently represents about 23 percent of the district’s general fund budget.

    “That’s a serious number if you consider the fact that there may come a day that the community doesn’t give that support, so when we look at the supplemental levy number … and keeping very much in mind what Hazel said, which is that our community overall is overwhelmingly supportive of education, but I do believe that tolerance probably has a limit,” Hamilton said.

    Several budget areas were discussed as potential spots where changes could possibly be made to increase revenue: restructuring the employee benefits package, privatizing the school district’s transportation service, furlough days and reducing the number of employees in the district.

    Hamilton said the trustees are also going to take a look at the recommendations made in 2008 by a finance advisory committee for additional ideas.

    Wendell Wardell, now the district’s chief operating officer, served on that committee as a private citizen.

    During Monday’s meeting Wardell said that 17 European countries are now in recession and economists think that continent’s downturn will “come ashore” in the U.S. next year.

    “It is possible economic conditions will be working against us as we move forward. That’s something everyone here should keep in mind,” Wardell said.


    Coeur d’Alene Press editorial:  Tom Luna stepped in it again.

    At least, that’s what some critics claim after Idaho’s superintendent of schools called anew for stronger teacher evaluations and rewards before the dirt on education reform’s grave had properly hardened.

    Respectfully, we disagree. Idahoans enthusiastically bent the three prongs of the state’s ed reform fork, but even the propositions’ most ardent antagonists agree there’s room to do things better.

    The quality of instruction – teachers – is as good a starting point as any, if for no other reason than teachers are the single most important factor in the delivery of quality education.

    Luna might be freshly vilified for suggesting that teacher performance should take center stage in the coming legislative session, but we think there’s no better time to seriously talk about this than right now. Every minute wasted is cheating kids out of the education they deserve and depriving families and society in general of the benefits.

    Before the tired cries resume – you know, evaluations are unfair because they only assess students’ ability to take tests, and rewards are unfair because they don’t accurately measure student progress – we recommend anyone interested in this issue read an article by Amanda Ripley published in The Atlantic.

    Ripley’s story, “Why Kids Should Grade Teachers,” paints a fascinating picture of the reliability of a survey being used in a growing number of school districts. As the headline suggests, the survey is a tool for students to evaluate their teachers, and as the story explains, its effectiveness is due largely to the questions it asks.

    What’s astonishing is the accuracy of the survey – created a decade ago by Harvard economist Ronald Ferguson – in evaluating the impact of teachers compared to any other measure. What’s also amazing is that the survey results are consistent with students as young as 5 years old.

    Of course, there’s already resistance to the survey from select quarters, but there’s enough empirical evidence of its effectiveness to warrant serious investigation by Idaho legislators and education officials. By a large majority, Idahoans believe there’s more to judging teachers than their students’ standardized test scores. This might be one valuable option.

    For teacher vacancies, consider what Coeur d’Alene Charter Academy does. In addition to administrative assessments, Charter adds an important step in the hiring process that includes evaluations by students of prospective teachers. Here’s how Principal Dan Nicklay explains it:

    We have all finalists teach a sample lesson in front of real students. Our thought is that many people can interview really well, and have really good subject-matter knowledge, but might not connect with kids. My personal view is that between knowledge and “connection,” the latter is far more important – at least up through middle school. If you can have both, you’ve got a winner.

    Ferguson’s survey with Charter’s evaluation could be a winner for Idaho.


    Spokesman-Review Editorial:  Ever since the U.S. Supreme Court’s decision to turn the Affordable Care Act’s Medicaid mandate into a voluntary matter, states have had to decide whether to take the federal deal to expand health care coverage for poor people. Idaho chose a deliberative path by commissioning two studies by out-of-state consultants at a cost of $195,000.

    We think the choice is obvious, because the federal government is picking up 100 percent of the costs in the early years and 90 percent thereafter. In fact, the argument for Idaho is stronger than in other states, given the way the current system is structured to deal with catastrophic health care costs for poor people.

    Nonetheless, if state leaders needed to see those cost savings on a spreadsheet, fair enough. But if they reject the Medicaid deal after reading the bottom line, then this exercise will have been a total waste of time and money.

    You don’t need two studies to reject the deal on principle.

    Gov. Butch Otter put together a 15-person working group to study Medicaid expansion. After reading the reports from the Leavitt Group and Milliman, the panel voted unanimously on Friday to accept the expansion of Medicare.

    And why not?

    Over a 10  ½-year window, “You save $6.5 million if you expand. It would cost you $284 million if you don’t,” a Milliman consultant told the working group. Milliman notes that the savings continue in the long run.

    The Idaho Hospital Association reports $407.4 million in savings over the same time frame. The Spokesman-Review’s analysis in September estimated the six-year savings to be $380 million.

    Though the amounts vary, one fact remains constant: Idaho would punish its own citizens and taxpayers if it rejected this deal.

    The reason Idaho would benefit so much is tied to the unique way it currently finances coverage for the poor. Local property tax dollars are funneled to the state’s general fund, and money is sent back to local governments to disburse. Under federal reform, many of the people the state currently subsidizes would be shifted to Medicaid.

    By turning down expansion, Idaho would be leaving those who pay property taxes fully on the hook. The working group, correctly, sees that option as foolhardy.

    “If we could have 90 percent to 100 percent of that paid by the federal government, why wouldn’t we do it?” asked Tom Faulkner, a Gooding County commissioner.

    The only reason to reject this deal is out of ideological opposition to the Affordable Care Act. Idaho lawmakers put all their chips on the law being rejected by the Supreme Court or dismantled by a new president. They lost both bets. In doing so, they rejected federal money to set up health care exchanges and now have to find state funds.

    Doubling down on that act of spite harms poor people and property owners. State leaders should rise above that instinct and take the money.


    Elizabeth Pearson:  How do Americans really feel about taxes? Anti-tax groups and limited-government activists are quick to invoke a long American tradition of tax revolt and resistance in making the case that aversion to taxes is as American as apple pie. But this simple narrative gets the story wrong. The most recent such indication came on Election Day, when voters rejected tax limitation measures and supermajority requirements in Florida and Michigan and Californians strongly endorsed increases in the sales tax and income taxes for high earners in order to fund public education. Though notable in a political environment dominated by anti-tax rhetoric, such support is actually not as exceptional as it seems. It’s worth remembering, now that the election is over and we turn to the looming fiscal problems that confront state and federal governments, that Americans also have a long history of embracing and defending higher taxes.

    We don’t hear as much about this history, in part because it doesn’t fit the story that anti-tax groups want to tell. But this silence also stems from the fact that political fights to increase and defend higher taxes have frequently played out in the halls of state and local governments, rather than in the national spotlight.

    Consider the postwar period in American history between the late 1940s and the mid-1970s. During these decades, state and local governments dramatically expanded investments in public infrastructure and services, particularly in the area of public education. Financing these investments required substantial increases in revenue, which states generated by adopting new taxes (namely, individual and corporate income taxes and the sales tax), increasing the rates or expanding the reach of existing taxes, and making other changes to improve the efficiency of revenue systems. According to the Advisory Council on Intergovernmental Relations (ACIR), a federal commission that tracked these changes, state and local revenue as a share of GDP more than doubled between 1945 and 1972, going from 4.4 percent to 10 percent.

    Although a portion of revenue increases occurred naturally as inflation raised prices on taxed goods and pushed taxpayers into higher income brackets, the largest share was a consequence of specific interventions by state lawmakers. Between 1950 and 1967, the ACIR calculated that 53 percent of the increase in state tax collections resulted from political or legislative initiative rather than from automatic increases built into existing tax structures.

    These actions by state policymakers were by no means uncontested. Vigorous debates took place over whether states needed new revenue and who should be required to chip in to provide it. But in state after state, tax reform aimed at modernizing revenue systems and funding new public services won out, championed by both Democratic and Republican lawmakers. To be sure, the two parties often had different ideas about what types of taxes should be adopted (Republicans tended to favor the sales tax or flat-rate income taxes while Democrats were more supportive of graduated income taxes and higher taxes on business). But policymakers in both parties recognized that their budgetary priorities depended on new sources of revenue; existing funds simply could not be stretched indefinitely in the face of growing populations and increased demands for public services. “Fiscal discipline” during this period actually meant adopting new taxes to fund the growing needs of states rather than relying on borrowing, accounting tricks, or stop-gap measures.

    Crucially, voters also supported higher taxes during this period. By the late 1970s, a backlash against the property tax would be forcefully expressed through ballot initiatives that limited state taxes and expenditures. But during the 1960s and early 1970s in most states that authorized the initiative and referendum, voters repeatedly chose to retain new taxes that had been referred to the ballot by anti-tax groups, often endorsing these new taxes by large margins. For instance, in Nebraska, Maine, and Ohio, voters rejected ballot initiatives that would have overturned newly adopted income taxes, while the same result held in Massachusetts and Idaho for sales taxes.

    How did policymakers build public support for higher taxes? Perhaps the most important lesson of postwar tax reform battles lies in the vocabulary that pro-tax coalitions developed to persuade citizens that higher revenues deserved their votes. In addition to warning about the fiscal chaos that would result if governments did not act quickly to reform their patchwork revenue systems, advocates argued that higher taxes would underwrite a modern, progress-oriented state. For instance, in 1966, the Republican governor of Idaho called the sales tax “the coronary artery of progress” for the state, arguing that “it will take money — not mothballs — in the state treasury to build the Idaho of which we all dream.” In his opening address to the 1967 legislature, Republican governor George Romney of Michigan pressed lawmakers to adopt an income tax so that Michigan might enter “a new generation of progress.”

    Ultimately, the pro-tax coalitions that formed as Republicans and Democrats, labor unions and business interests, teachers and homeowners sided with higher taxes during the 1950s and 1960s would prove unsustainable by the late 1970s. But the anti-tax politics of this later era can by no means be attributed to an innate American dislike of taxes. Indeed, popular opinion about taxation is shaped by political debates, and history demonstrates that Americans are capable of much different debates about taxes than the ones that prevail today. This more complex history of Americans’ relationship to taxes is worth investigating — rather than overlooking — as we confront contemporary fiscal challenges.


    Senator Tim Corder:  There has been interest in the question of which states tax what, and whether Idaho should do away with the income tax and increase the sales tax to compensate. There are those that would argue for the reduction of all taxes and the outright elimination of some out of frustration.

    Oh, the good ole days when the unmarried schoolmarm taught in a one-room school and the dirt trail between cities was easily identifiable and perfectly acceptable for intermodal transportation. When the ruts in the road became too rough or the potholes too deep, folks just moved to a smooth place and there was no differential speed on the roads because the horses all traveled the same speed, more or less. It was the darned slow oxen that just messed up the whole deal – but I digress.

    Let me get out in the weeds just a bit longer by suggesting that the “Fair Tax” is my favorite federal solution for equity, but because it was originally an idea proposed by a Democrat in Congress, it had little chance. I have posted a rerun of a 2007 article I wrote on the Fair Tax onwww.senatortimcorder.com if you are curious.

    Back to the three taxes, or the more familiar, three-legged stool! There are really more than three legs when one considers the amount paid as excise taxes, but let’s focus on the three primary forms of taxes.

    Idaho taxes income, wealth (property), and consumption (sales). The three, when balanced appropriately, have proven to provide stability and solid economic health for Idaho. I believe the three taxes should get the credit for economic stability even more so than the beloved constitutional balanced budget requirement, especially with all those reportable off-balance sheet contingent liabilities hanging on like leeches – but there I go in the weeds again.

    Information compiled by the Federation of Tax Administrators offers these comparisons between Idaho and the neighboring states of Montana, Nevada, Oregon, Utah, Washington, and Wyoming. Among these states, Idaho and Oregon are tied for the lowest overall tax burden based on taxes per dollar of income and they are well under the national average.

    Two of the seven states do not have a sales tax (Montana and Oregon) and Idaho enjoys the lowest sales tax burden of those that do.  Washington, Nevada, and Wyoming are the highest.

    Washington, Nevada, and Wyoming do not have corporate Income tax – see a correlation to the sales tax? The 2012 change in Idaho law will change that result a bit, but Idaho and Utah were nearly tied and Montana was the highest by a huge margin. Washington, Nevada, and Wyoming don’t have individual income tax either; again, notice the correlation with sales tax and remember that Wyoming has oil, Nevada has gambling, and Washington has multiple sales tax rates by locale, perhaps as high as 20 percent.

    Each of the subject states has a property tax, but Idaho enjoys the lowest, based again on taxes per dollar of income. Wyoming is very high; next is Montana, Nevada, Oregon, Washington, and Utah. Then there are the sin taxes:  cigarettes, wine, and beer. Each state differs on those.

    Finally, and I use the word liberally, are the taxes on fuel, energy, mines, interest, insurance, estates, etcetera where each state differs.

    The circle of tax life brings us back to the overall tax burden. Idaho is the best among our neighboring states and well below the national average. I understand we still pay too much, but when policy changes manipulate the rate of one of those taxes to provide for an advantage to a particular segment of our state, then the balance changes and there will likely be equal and opposite consequences to other segments of our society.

    Maintaining tax balance is critical to stability and viability. Stability and viability minimize the risk of policy manipulation.


    Betsy Russell reports:  A somewhat subdued Tom Luna, Idaho state superintendent of schools, pledged today to work with stakeholders to bring back only the pieces of his voter-rejected “Students Come First” school reform laws on which all sides can agree. “I think it’s critical that we work together,” Luna said in his first public comments since last Tuesday’s election. Asked about the role of the Idaho Education Association, the state’s teachers union, Luna said, “We’ll sit down and meet with them.”

    Asked what he regrets, Luna said, “I regret that I ever used the phrase ‘union thuggery.’” He also said he regretted that the laws that went to the voters in three referenda measures were so complex and far-reaching, and promised simpler, less-comprehensive proposals in the future. Luna said he accepts the voters’ verdict on his reform plan. “The same people that voted down those laws elected me to this position twice,” he said. “I have full confidence in Idahoans in educating themselves and making a decision based on the information gathered. … They had specific issues with specific parts of the law.”

    He offered a couple of examples of pieces of the laws that he thought all sides might support: Funding for high school seniors who have completed graduation requirements to take dual-credit college courses; funding for more math and science teachers; and “some sort of pay for performance.” But he said overall, he doesn’t know what parts of the reform plan will win support from all stakeholders. “We’ll hear from the stakeholders, and we’ll identify what we all agree on,” Luna said. “I think the governor will continue to play a lead role.”

    Luna said he stayed out of the public eye in the days following the election because he was exhausted and emotionally drained. “I just took a couple of days, just spent time with my grandkids and my family,” he said. “I was just mentally and physically done.”


    Betsy Russell reports Idaho should expand its Medicaid program to cover the working poor in order to “do something right” and to save the state hundreds of millions of dollars, a state panel recommends.

    “If we could have 90 percent to 100 percent of that paid by the federal government, why wouldn’t we do it?” asked Tom Faulkner, a Gooding County commissioner who has spent months studying the issue as a member of a 15-person working group created by Gov. Butch Otter.

    The panel reached its unanimous decision Friday after reviewing a new report from the Milliman consulting group documenting long-term savings to the state from the move. Short-term savings already were assured, as the federal government will pick up 100 percent of the costs for the first three years; then it phases down to 90 percent.

    “On a purely financial basis, it would make sense to expand,” Justin Birrell of Milliman told the working group. “You save $6.5 million if you expand. It would cost you $284 million if you don’t.” That’s over a 10  1/2 year period starting in the second half of state fiscal year 2014. Added the firm’s Ben Diederich, “The state and local offsets are what’s very unique to Idaho.”

    That’s because of how Idaho currently pays catastrophic medical bills for the indigent; through the state’s Catastrophic Health Care program, the money comes entirely from the state general fund and from local property taxes.

    Working group members added a caveat to their recommendation: They only want to expand Medicaid if Idaho designs an appropriate benefit plan that provides incentives for newly covered patients to take responsibility for their own health.

    “We aren’t just signing a blank check,” said state Rep. Fred Wood, R-Burley, a working group member and retired physician. “That’s not what we’re about. We’re about doing it right or we’re not going to do it.”

    Idaho’s current Medicaid program, redesigned in 2006, already sets different benefit plans for different populations, including children and people with disabilities. Health and Welfare Director Dick Armstrong said the working group’s recommendation fits right in with Idaho’s approach.

    Medicaid is the joint federal-state program that provides medical coverage for the poor and disabled. Currently, Idaho’s program covers only children, low-income parents and the disabled. Under the national health care reform law, states have the option of expanding the program to poor adults almost entirely at federal expense.

    A Spokesman-Review analysis in September estimated that Idaho’s taxpayers could save $380 million over six years by replacing its current system with a Medicaid expansion. Some lawmakers worried that higher costs in later years could eat up those savings, but the Milliman study said the long-term outlook also shows significant savings.

    An analysis by the Idaho Hospital Association of research done by the University of Idaho estimated total tax savings over the 10  1/2-year period at $407.4 million. Steve Millard, head of the hospital association, said that means as much as $90.3 million in local property taxes wouldn’t have to be levied.

    “The data that’s been presented today seems to me to be overwhelmingly compelling,” said working group member Beth Gray, a nurse practitioner.

    Said group member Mike Baker, CEO of Dirne Community Health Center in Coeur d’Alene: “There’s financial benefits, there’s the opportunity to do something right here. From the state perspective, you look at the numbers, you look at the things we’ve learned through these discussions, and I think it’s great – a great opportunity for us to put together a different model.”

    Otter will make the final call, along with state lawmakers, who ultimately must approve changes to the state’s Medicaid plan.


    Betsy Russell reports:  With current state tax revenues, Idaho’s state budget is on track for a substantial ending balance July 1 of as much as $37 million, according to figures presented to lawmakers today by legislative budget chief Cathy Holland-Smith. That doesn’t count $18.3 million in supplemental budget requests that lawmakers will consider in January, but Holland-Smith said those requests are likely to fall substantially, based on slower than expected Medicaid caseload growth and differences in prison inmate forecasting. If all $18.3 million were needed for the supplemental requests, the state would end this budget year July 1 with an $18.7 million ending balance, Holland-Smith said.

    She then presented an estimate for the fiscal year 2014 budget, the year that starts July 1, including various assumptions about budget requests. If all requests were funded, state workers were given 1 percent raises, and state revenue were to grow by 4 percent, the hypothetical bottom line would be negative, to the tune of $169.5 million. That’s in part because one-time money from reserve funds has been built into the state budget to help it balance each year in recent years. Idaho still would have some reserve funds available; as of June 30, 2013, the state’s two main reserve funds, the Budget Stabilization Fund and the Public Education Stabilization Fund, would hold a projected total of $98.6 million.

    Holland-Smith cautioned, however, that the assumptions include Idaho continuing its Catastrophic Health Care Fund program, which could go away if the state opted to expand its Medicaid program largely at federal expense. Other assumptions also could change.


    Betsy Russell reports:  Here are some of the working group members’ comments as they debate options for Medicaid expansion in Idaho:

    Sen. Patti Anne Lodge, R-Huston, said, “This would be good for our people in Idaho. But we also …  don’t know what the future’s going to hold, and we don’t know what the federal government is going to  do with its $16 trillion deficit and the fact that they’re going to be putting bigger burdens on the states.” She said, “I’m not quite there totally. I know it’s good for Idaho, but I’m very concerned about what this burden is going to place upon our people.”

    Dr. Ted Epperly said he’s “strongly in favor” of expanding Medicaid in Idaho. “Really what we have an opportunity to do here is shape a new health care system and a new insurance program. … I love a benefit redesign that really puts a lot of personal accountability and incentivization onto patients for their health.” He added, “I think we need to focus on what we can control, and what we can control is what we do here in Idaho with this program. … It’s a real opportunity for us.”

    Dan Chadwick of the Idaho Association of Counties said, “The CAT program, the county indigent program, has run its course. It’s time for it to end in this state because it has not done its work. It’s becoming financially and administratively unsustainable.”

    Tom Faulkner said Idaho’s now paying 100 percent of the costs for health care for the working poor from its state general fund and from county property taxpayers. “If we could have 90 percent to 100 percent of that paid by the federal government, why wouldn’t we do it?”

    Beth Gray said, “The data that’s been presented today seems to me to be overwhelmingly compelling.”


    Betsy Russell reports Legislative Budget Director Cathy Holland-Smith prefaced her presentation to the Legislative Council with a caveat: Many of the numbers will change from what she’s prepared. That’s because voters rejected the “Students Come First” school reform laws, meaning state Superintendent Tom Luna’s budget request for next year, which was based on those laws, will need a re-do. Plus, just last night, the state Department of Health & Welfare submitted a substantial budget revision, Holland-Smith said, one that likely will be positive. “We know caseloads are down somewhat,” she said.

    Between those two factors – affecting the largest portions of Idaho’s state budget – “A substantial amount of the budget request will have to change,” Holland-Smith said.


    Betsy Russell reports Idaho state tax revenues came in $10 million below projections in October, for a year-to-date $6.9 million below forecast, a 0.8 percent lag. After accounting for amounts the Legislature must reimburse deficiency accounts for fires, pests and hazardous material incidents, the state now looks on track to end the fiscal year with a $30.1 million balance, $25.7 million more than was anticipated when the legislative session adjourned last spring. You can read the DFM’s general fund revenue report for October here, and the Legislature’s General Fund Budget Monitor here; both look at the impact of the October numbers. In a few minutes, the Legislative Council will hear a state budget update from Cathy Holland-Smith, manager of budget and policy analysis.


    Adam Cotterell reports Idaho lawmakers will soon begin to figure out how to spend the nearly $3 billion they’ll get from taxpayers next year. Legislative services budget director Cathy Holland-Smith says they should be in a good position to do that without cuts to state agencies and programs. Holland-Smith briefed legislative leaders Friday on what they can expect when they sit down in January to write the 2014 budget. She maintains a positive outlook despite the fact that agency requests exceed projected revenue by almost $170 million.

    “A substantial amount of the budget requests as presented here is now going to change,” she says. “Public schools budgets will have to be built according to the new formula.”

    Holland-Smith says the budget request submitted by the state’s Department of Education has to be redone because it was based on the Students Come First laws. Voters repealed those this week through Propositions 1, 2 and 3. Holland-Smith expects the new request from the Ed Department to be smaller because it won’t include Students Come First items like extra money for pay for performance. Education makes up half of Idaho’s budget. Holland-Smith also expects one of the state’s other big expenditures, Medicaid, will require less money than previously forecast.


    Molly Bloom reports:  Remember Senate Bill 5?

    Well, earlier this year the Idaho state legislature passed two laws similar to Ohio’s now-defeated collective-bargaining reform law.

    The key difference between Idaho and Ohio was that Idaho’s laws would only have affected teachers. Senate Bill 5 would have affected all public employees.

    This November, Idaho voters decided to repeal them. From our partners atStateImpact idaho:

    Voters in Idaho have rejected the trio of education laws put to a referendum through Propositions 1, 2 and 3 by a wide margin. That has sent a clear message to Idaho’s Legislature, governor and school superintendent that the reforms they put into place are not popular with the public.

    (Propositions 1 and 2 relate to now-rejected laws concerning educator contract negotiations and compensation.)

    That last proposition, Proposition 3, had to do with technology and funding for schools. Voters rejected that proposition most strongly. About 66 percent of voters said “no.”

    StateImpact Idaho says that much of the opposition to Proposition 3 had to do with a provision that would have had the state provigind each high school student and teacher a laptop.

    But there was more to Proposition 3 than laptops.

    For example:

    What Idaho Wanted to Do Is Ohio Doing This?
    A laptop computer will be provided for all high school teachers and students. That will happen over four years beginning with teachers in fall 2012. No
    As determined by the Idaho Board of Education, students must take two semester-long online classes to graduate. No
    High schools will get more money to help pay for the costs of providing more math and science classes to meet new graduation requirements. No. State lawmakers and Gov. Kasich are developing a new funding formula, but have said it’s unlikely to increase school funding.
    Creates a formula for allocating money to districts that takes online classes into account. See above. Lawmakers and the governor have said they want to encourage online and “blended” learning.
    The Idaho Department of Education will post a fiscal report card for each school district on its website. Last year’s state budget instituted a similar requirement.
    Raises the minimum teacher salary by $355 to $30,000 a year. No
    If a student has completed all graduation requirements by the beginning of her senior year the state will pay for her to take up to 36 college credits while still being registered as a high school student. She can also take college credits in her last semester if she meets graduation requirements by the end of the first semester. Ohio already lets high school students take college courses for credit.
    Public post-secondary schools in Idaho can operate charter high schools. Yup. (Ohio lets state universities sponsor charter schools.)

    Marc Kilmer reports:  Like their counterparts in other states across the country, Idaho policymakers are considering whether to expand Medicaid in line with the demands of President Obama’s health care law. Two recent reports sound caution about such a step, giving ample reason for the state to delay the expansion or reject it entirely.

    Leavitt Partners, a consulting group headed by former Health and Human Services Secretary Mike Leavitt, released a report in September commissioned by the Idaho Department of Health and Welfare that urged the state to delay any Medicaid expansion under Obama’s law.

    According to the report’s executive summary, “If Idaho decides to expand, Leavitt Partners recommends expanding in 2014, which will give the State three years of full federal funding to evaluate overall costs and utilization patterns of the newly eligible. Based on this evaluation, Idaho can make appropriate changes to the program or opt out of the expansion entirely after 2016.”

    Also in September, the Idaho Freedom Foundation released a report entitled “Increased Dependency is not Compassion: Expanding Medicaid is the Wrong Solution to a Misdiagnosed Problem.” In this report, author Parrish Miller notes the state would suffer spending hikes under any Medicaid expansion.

    Costs for State Will Rise

    The Leavitt report found that up to 123,800 Idahoans could be newly eligible for Medicaid by 2014 if the expansion under Obama’s law were implemented. However, the report does not provide an estimate of how much this newly eligible population will cost the state.

    “Overall [the Leavitt report] seems to support my analysis,” said Miller, “but their estimation that only 85 percent of newly eligible Medicaid recipients will enroll could easily be low due to the impact of the individual mandate. Examples from the past cannot account for this unprecedented federal demand.”

    For Miller, the cost concern is paramount.

    “The key issue is that even if expanding Medicaid only costs the state $100 [million] to $130 million in the first six years—excluding administration costs—because the state will pay only about 5 or 6 percent of the cost during those years, the total cost will likely be more than $2 billion,” he said. “It is that amount that should be at the forefront of this conversation. In addition, there is no guarantee that the federal government will continue to pay 90 percent after 2020. They could easily drop coverage to 70 percent or potentially even lower.”

    Undermining Obamacare

    Besides noting the fiscal hit the state would take, Miller suggests another reason not to expand Medicaid.

    “Refusing to expand Medicaid undermines the central goal of Obamacare—if health care is not universal, and millions are denied the option to become dependent on medical subsidies, the central planners lose,” writes Miller in his report. “Refusing to expand Medicaid is the best way to deny the statists the victory they have so long sought in the establishment of ‘universal health care.’”

    Instead of expanding Medicaid, Miller counsels state policymakers to pursue other reforms. “The stated goal of expanding Medicaid is to help the poor and disabled, but the best way to accomplish that goal is to lower the costs of health care overall and to help these people get off of the government dole,” he said.

    Idaho May Pause

    In a state like Idaho, where opposition to Obama’s law is strong, this line of argument may prove persuasive.

    “Obviously the [Leavitt] report never addresses the question of whether Medicaid is even within the scope of the proper role of government to begin with,” said Miller.

    It is unclear what Idaho will do regarding Medicaid expansion. Republican Gov. Butch Otter has expressed reservations in the past about expanding Medicaid, noting in July that some estimates say the cost will be “as much as we are appropriating from general tax receipts in the coming budget year for all our colleges, universities, and community colleges combined.” However, he has declined to commit to a course of action until further study is completed.

    Internet Info:

    Parish Miller, “Increased Dependency is not Compassion: Expanding Medicaid is the Wrong Solution to a Misdiagnosed Problem,” Idaho Freedom Foundation: http://heartland.org/policy-documents/increasing-dependency-not-compassion-expanding-medicaid-wrong-solution-misdiagnosed

    Leavitt Partners, “Idaho’s Newly Eligible Medicaid Population”:http://healthandwelfare.idaho.gov/Portals/0/Medical/MedicaidCHIP/0918%20Idaho%20Leavitt%20Report%20Executive%20Summary.pdf



    Marc Kilmer (mkilmer@mdpolicy.org) is a Maryland Public Policy Institute senior fellow… (read full bio)


    Lisa Dayley reports:  Should the state eliminate personal property taxes, the county stands to lose an estimated $600,000 in revenue.

    The commissioners discussed the state’s proposal to do away with the tax during its weekly meeting held on Monday.

    “If they take the personal property taxes away from us, it all boils down to the question ‘Will the county have to redo services and in what area?’ Something would have to give,” County Clerk Patty Temple said.

    Personal property taxes result from levies placed on property like computers, desks and equipment owned by businesses. For a smaller business, it might average only $40 a year but, for a larger company, it could total thousands of dollars a year.

    “Your food processing plants are the ones that will really benefit from this,” Commissioner Kent McClellan said.  

    The Idaho Association of Commerce and Industry (IACI) initiated the proposal.

    “One of the problems with this is that there’s got to be some type of a tax shift or services have got to be dramatically cut. If you shift from personal property  taxes to real property taxes, then the employers are getting a better tax break, but their employees are paying higher taxes on their homes,” Commissioner Kent McClellan said.

    Commissioner Sheryl Koyle said that an increase in property taxes could put a strain on low-income residents.

    “Those on an extremely fixed budget can’t afford $10, $20 or a $50 increase in property taxes. You have to watch out for everyone and all of your citizens. It’s a Catch 22,” she said.

    According to McClellan the Idaho Association of Counties is confident that there will be some kind of a change in personal property taxes.

    “It probably won’t take 100 percent of that away from us. They’ll probably revise some of the definitions of what personal property tax really is. None of us knows what the legislature is going to do until they convene and discuss it,” Commissioner Kent McClellan said.

    Initially, there were reports that the county would lose only $100,000, and that would be funds traditionally paid by “Mom and Pop” shops. Now commissioners are hearing the county may lose all of its personal property tax revenue.

    While the loss wouldn’t devastate Minidoka County, it has the potential to do so to other counties dependent on the personal property taxes of large companies.

    “It will harm Caribou County that has Monsanto,” Koyle said. Monsanto is located near Soda Springs.

    There remains a lot of unanswered questions, agreed the commissioners, and to answer those questions the state plans to mail a pamphlet to tax payers explaining the situation.

    “They said they’d be out by the end of last week. It’s about anything that deals with personal property taxes. It will help explain why we need the tax, and why it has to be replaced. Those brochures are going to be coming,” he said.

    The commissioners were also concerned about the upcoming education bill, Proposition Three, scheduled to be voted on next month. Should the proposition be approved, Idaho students will be required to take online courses.  

    Currently, commissioners provide about $320,000 toward funding county College of Southern Idaho (CSI) students’ tuition fees. Those fees also cover the cost of Minico high school students’ dual credits.

    Should the proposal pass, it’s anyone’s guess whether the county will see an increase in its college fund payment, Temple said.

    “That hasn’t been adequately addressed, and who’s responsible for those (extra) dual credits. We don’t know what the impact on the counties will be. We don’t know if those online classes will be taken through a community college like CSI or through a vendor. It’s a possibility that it could have an impact on the county,” Temple said.

    Initially, the state covered most of the college costs through its state liquor sales tax revenue which today is only around $70,000 a year. The difference is enough to drive somebody to drink, said Commission Chairman Bob Moore.

    “I think dual credits are valuable. I just wish the state, when they set that up, had thought it all the way through as far as financing. Originally they had a plan for  it to pay for itself, but now they don’t,” he said.

    Voters will decide on the initiative on Tuesday, Nov. 6. Temple also announced that she has received a steady stream of mail-in ballots and has also seen a significant number of people vote early. Voters may continue sending in ballots or voting early until 5 p.m., Friday, Nov. 2.

    “I think we have a little over  500 absentee ballots out. They’re coming out to vote,” she said.


    Jessica Robinson reports Idaho is considering whether to keep three education laws that overhaul everything from how teachers are paid to how kids learn in the classroom.

    Voters in several states across the country will decide on education measures this November. Washington votes on whether to allow charter schools and Idaho is considering whether to keep not one but three brand new laws. They overhaul everything from how teachers are paid to how kids learn in the classroom. The vote is a test for some controversial ideas in education and for the man behind them.

    Idaho classrooms are political battlegrounds this fall. Many teachers, like Coeur d’Alene band instructor Tim Sandford, strongly oppose the Idaho education laws. That’s creating discord with administrators who are trying to implement the changes even as the election looms.


    Betsy Russell reports a lawsuit charging that Idaho schools are violating the state Constitution by charging fees has expanded to include wider school-funding issues at the heart of a long-running lawsuit that prompted the state’s school funding system to be ruled unconstitutional in 2005 by the Idaho Supreme Court, the AP reports. An amended complaint in the fee lawsuit adds a second cause of action, charging that state lawmakers have ignored the 2005 Idaho Supreme Court ruling.

    Deputy Attorney General Mike Gilmore told AP reporter Rebecca Boone, “There have been changes. The issue now is whether enough has changed, and that’s why there’s a lawsuit.” Robert Huntley, attorney for the parents and students bringing the lawsuit, said the public should be “ashamed and alarmed” at the continuing deficiencies in Idaho’s school funding system. Click below to read Boone’s full report.


    KLEWTV reports a lawsuit over Idaho’s system of funding public schools is growing, with the former school superintendent who is pressing the case reviving the claims made in another lawsuit that plodded through Idaho’s courts for 15 years.

    Russell Joki, a former Nampa Schools Superintendent who teaches graduate-level classes to aspiring school administrators at the University of Idaho, sued the state this month in Ada County’s 4th District Court, contending that student fees for things like chemistry and art supplies violate Idaho’s constitutional promise of a free public education.

    Now he’s adding a second cause of action to the lawsuit, contending that Idaho lawmakers have ignored an Idaho Supreme Court ruling from 2005 that found Idaho’s school funding system didn’t pass constitutional muster.


    Estelle Gwinn reports despite budget cuts the University of Idaho has maintained sufficient funding for research, which National Science Board members said is crucial to the state economy.

    The board recently ranked the country’s public research universities by their funding cuts. University of Idaho received the 19th biggest decline in state funding with a 24 percent cut between 2002 and 2010.

    “The National Science Board has a responsibility to be concerned about the health of science research in our nation,” said Ray Bowen, a member of the board that oversees the National Science Foundation. “If you look at the long-term impact of diminished funding, it’s something policy makers should be concerned about.”


    Audrey Dutton reports seven years ago, lawyers and investigators in the Idaho attorney general’s Consumer Protection Division tugged at a thread. The whole sweater began to unravel.

    Division chief Brett DeLange had seen reports from other states alleging price manipulation by drug companies. He suspected it might be happening in Idaho.

    He told Attorney General Lawrence Wasden: “If that’s true, that’s probably really hurt Medicaid.” Why? Because the state and federal taxpayer-supported health insurance for the poor pays for prescription drugs based on the prices reported by drug companies.

    Wasden decided to investigate. His staff subpoenaed drug-wholesaler records and sued dozens of companies.

    Fast forward to 2012. Most cases are now settled. Some companies held out until days before they were scheduled to meet Idaho’s lawyers in court.

    Litigation is still pending against a few of the more than 30 companies sued for illegal pricing.

    Wasden’s office has recovered:

    • $23.7 million in 17 drug-pricing settlements.

    • Another $23.7 million in 13 settlements with drug companies that were accused in most cases of illegally marketing drugs.

    • $1.2 million in drug-industry antitrust settlements.

    Idaho was singled out last month as a leader in drug-pricing lawsuits by the consumer-rights nonprofit Public Citizen.

    There are two main ways a state can take on consumer-protection cases: by joining a multistate investigation or going it alone. Idaho has done both.

    Joining a multistate settlement yielded $2.8 million in reimbursement from a Johnson and Johnson subsidiary about six weeks ago.

    “These are very large matters, sometimes involving millions of pages of documents or large sizes of data,” DeLange said. “Joining together, you use your resources more effectively.”

    If Idaho is especially affected, the state may pursue its own claims.

    In 2008, drugmaker Eli Lilly settled for $62 million with 33 states that alleged the company illegally promoted its antipsychotic drug Zyprexa. Idaho opted to be one of “several states that chose to pursue their own cases against Eli Lilly (and) recovered far more in single-state settlements than they would have otherwise received from the multistate agreement,” Public Citizen wrote. Idaho recovered $13 million in that case, which the two sides settled in 2009.

    Wasden and DeLange said in interviews that the attorney general’s role isn’t to “take on” Big Pharma or any other industry. And despite its track record — in fiscal 2011, the team recovered $14.41 for each dollar it was appropriated, adding $1.6 million to Idaho’s general fund — the AG’s role isn’t to rake in cash for state coffers.

    Wasden’s role is to protect Idaho and its taxpayers from bad actors.

    More than 12,000 Idahoans should see evidence in their wallets soon. Wasden just announced that some Idaho borrowers will get money from five of the nation’s largest banks, which agreed in a $25 billion multistate settlement to pay people who lost their homes in foreclosures that may have resulted from loan servicing errors.

    “We don’t go out and target industries,” Wasden said. “We’ll hear from consumers that something is amiss. Oftentimes we’ll find that what’s going on in some other state is happening here as well. We have to look at: What is the impact in Idaho?”

    Q: Tell me more about the Zyprexa case. How did you decide to pursue it?

    DeLange: The harm, we felt, was so large in our state. It’s amazing how many people on Idaho Medicaid alone use Zyprexa. It’s thousands … and lots of people developed diabetes. And guess who ends up paying for that? The taxpayer. The allegation is if (Eli Lilly) had been up front and honest about it, we wouldn’t have had so many people diabetic. We had experts prepared to testify.

    Q: What’s the story behind the drug-pricing cases?

    DeLange: When we started that (investigation) seven-plus years ago, we didn’t know at the time we began how many companies it would involve or the breadth of it. … We have a lawyer (Jane Hochberg) who has literally put in easily over 10,000 hours over the years now on this matter.

    I think it’s really quite discouraging that we have had this many different cases with these many instances of what we think was very inappropriate, unlawful marketing of products, covering things up, making claims that aren’t substantiated, conspiring to keep prices high, reporting simply false prices.

    Wasden: We said the process we want to employ is to first sit down with (the companies) and talk with them, because if we can resolve it that way, it costs a lot less money to do it, and you get a lot more satisfactory result. So we didn’t just file a 200-page complaint naming everybody and their dog with cameras rolling on the statehouse steps. We said come sit down and talk to us.

    You really can funnel those into three categories of responses.

    One is they came in and talked to us, threw everything on the table, and we sifted through it, and (we said), “Based on what we see here, we don’t think we have a cause of action, thank you very much, we appreciate your participation.”

    Second approach is they came in, threw everything on the table, and we sifted through it and said we don’t have questions about A, B or C, but we do have questions about X, Y and Z. (That) narrowed the focus of what the dispute was.

    We had a third category where they just said, “We’re not going to come talk to you.” Well, there’s only one forum then for us to have that discussion, and that forum is the courtroom.

    Q: Should these companies be banned from doing business with Idaho?

    Wasden: I don’t know who else you’re going to get medicine from. If you have to have a prescription for diabetes, you’ve got to work with companies to get those drugs. It’s the Legislature that makes that kind of determination, not us.

    Q: Do you worry that suing these companies will end up raising drug prices?

    Wasden: I don’t think so. They’re making a lot of money. You consider the fact that the falsely reported (price) is 200 percent to 3,000 percent (higher than it should be), that’s a lot of cash going in one direction. It would take an economist to answer that question, but I think they probably have a lot of profits sitting around to pay those reparations.

    Q: What do these lawsuits give the consumers and taxpayers of Idaho?

    Wasden: It doesn’t matter whether you’re the largest employer in the state or whether you’re a mom-and-pop grocery store. You’ve got to live by the same set of rules. … What have we returned to consumers? A more level playing field. There is an entity out there that’s willing to say, “No, you have to play by the rules.” That gives a return to the consumers in the long run that the marketplace is more fair.

    DeLange: Business should be accountable for what they say, and what they don’t say. Let the chips fall from there.

    Wasden: Let the political chips fall where they may. In some cases, (we recover) money, damages. Another thing we’ve done is help to restore to the state money that its taxpayers were paying. We return right around $40 million to $50 million a year. On average that is about what we contribute to the general fund.

    Read more here: http://www.idahostatesman.com/2012/10/13/2308371/idaho-helps-keep-drug-firms-honest.html#storylink=cpy

    Maureen Dolan reports there was a lot of talk in Coeur d’Alene this week about the education reform referendums that Idaho voters will consider on Nov. 6.

    Former state superintendent of public instruction Marilyn Howard spoke to about 70 people Monday evening at the Greenbriar Inn, an event hosted by Womenspeak North Idaho.

    On Friday, Idaho first lady Lori Otter spoke to a crowd of several hundred who attended the Kootenai County Republican Women Federated’s Women in Red luncheon at the Best Western Coeur d’Alene Inn.

    The referendums – Propositions 1, 2 and 3 – seek to repeal the comprehensive package of education reforms passed into state law following legislative approval in 2011. The so-called Students Come First laws limit the bargaining powers of teachers unions, require contract negotiations be held in public, call for merit pay for teachers, advances in technology including laptops for all high school students and teachers, and make online course credit a high school graduation requirement.

    Otter, whose husband Gov. Butch Otter worked with Idaho schools chief Tom Luna to develop and promote the education reform laws, and Howard, Luna’s predecessor, see things very differently when it comes to the referendums.

    “There’s nothing in these laws that as a teacher in a building, that I disagree with,” Otter said to the Republican group on Friday.

    Otter taught health and physical education and coached basketball and volleyball at the middle and high school levels for 12 years. She earned a master’s degree in 2004 and worked for two years as an elementary principal in the Meridian School District.

    She has been touring the state in recent weeks, meeting with various groups to talk about her support for keeping the education reform laws in place. She also did a radio spot for the Yes for Idaho Education campaign.

    Otter said she’s not out speaking for the reforms to tout her husband’s position. She said she’s doing it because she’s an educator who personally believes strongly that the reforms are needed. Prop 1 phases out teacher tenure and limits negotiated agreements between teachers and school boards. Otter said it eliminates the practice of keeping ineffective teachers simply because they have seniority.

    “I was a teacher. I was never in the union,” Otter said.

    She said she never wanted her money to go to issues supported by the National Education Association, and never thought it was necessary to be in the union simply to have legal assistance in the event of some liability.

    The reform laws call for teacher evaluations by parents and administrators, something Otter said she supports because it gets principals looking hard at what’s happening in their schools.

    Regarding pay for performance, Otter said it’s based on academic growth, not proficiency. There are standards set by the state and standards set by local school boards.

    Prop 3 funds laptops for all high school students and teachers and requires an online course credit for high school graduation.

    Repealing the laws will result in the elimination of local control for school boards, Otter said. There will be no laptops.

    “If they fail, you go back to early retirement bonuses; you go back to seniority; you go back to tenure … and the unions are in charge,” Otter said.

    There are teachers that support the referendums, she said.

    “Because there’s nothing worse than being in a building and knowing there are people who aren’t doing their job,” Otter said.

    Marilyn Howard says she’s voting no on all three propositions.

    “I want to make a statement that says, ‘Stop it.’ Basically, I think we’re hurting kids,” she said.

    Howard was Idaho Superintendent of Public Instruction from January 1999 to December 2006. She holds a doctorate in curriculum and instructional science, and spent many years in the classroom.

    Education reform proponents are talking about what Idaho students could have, rather than what students actually have or don’t have.

    “You know a district in the Treasure Valley this week asked for donations of reams of paper,” Howard said.

    Regarding pay for performance, Howard said that’s not really what the state’s plan is.

    “This is how did the kids in the school do on tests,” Howard said. “Performance on tests is not necessarily a reflection of good teaching, the kind of teaching I would call good teaching. Maybe it was all rote, force-fed, the kinds of facts you need to pass the test.”

    Flexible thinking and practical application aren’t being measured on the standardized tests, she said, and there are drawbacks to using whole school rankings to determine if teachers should be awarded merit compensation.

    “If a school does well, we could have a highly ineffective teacher getting a bonus … and maybe the student did well because it didn’t have limited English proficient students, it didn’t have a high percentage of poverty and maybe it didn’t have students with disabilities,” Howard said.

    Those groups of students are known to often fail to reach proficiency benchmarks or achieve academic growth, Howard said, and she is concerned about them, because it is through no fault of their own.

    “I want kids to have hope, and honestly, when little kids walk across the threshold of the school, I don’t want them to be seen as the enemy, the kid who’s going to keep the teacher from getting a bonus,” Howard said.

    The state Department of Education should wait to put a pay for performance plan in place, she said. There are many other critical issues that need to be addressed first.

    Public education uniformity is at risk in Idaho, Howard said, because school districts have to rely on local tax levies and districts have different populations and varying levels of support.

    “Just bringing a computer into that rural area, isn’t going to bridge that gap,” Howard said. “The reality is, schools were already doing a huge amount of integration of technology. They have been for years.”

    Previous to the Students Come First legislation, Idaho schools were already offering online education through Idaho Digital Learning Academy, Howard said. IDLA, an online, for-credit school, was created by the Legislature in 2002. Howard said it was developed by Idaho educators who are its teachers as well.

    “This is being dismissed, and they actually have reduced the budget for that school by $3.7 million,” Howard said.

    She said wherever she is, she hears from people from all age groups who are unhappy with what’s happening in education now in Idaho.

    “I feel that the people we depend on to do the right thing for us, have not been doing the right thing, and they’re not owning up,” Howard said.

    She said the Legislature needs to look at the total taxing structure and make some big changes. Howard suggests they look specifically, and analyze the numerous exemptions that remove tax revenues from the state coffers.

    “Nobody’s even looking at that,” Howard said.

    Hamilton, Seddon endorse position

    Coeur d’Alene school board trustees Tom Hamilton and Ann Seddon announced this week that they support the Idaho School Boards Association’s position to vote yes on Proposition 1. The education referendum, one of three on the Nov. 6 ballot, asks voters if they approve or reject legislation that phases out teacher tenure and limits collective bargaining to salaries and benefits.

    The ISBA is not taking a position on the other two propositions. Hamilton and Seddon said their positions on this are their own. The Coeur d’Alene school board has not taken a stance on any of the education reform referendums.


    Dan Popkey reports opponents of Superintendent Tom Luna’s 2011 education reforms reported raising through Sept. 30 more than twice as much as the reported effort of supporters of Propositions 1, 2 and 3.

    With $1.06 million from the National Education Association and $280,000 from the Idaho Education Association, just $36,000 of the money raised for the Vote No on Proposition 1, 2, 3 campaign came from other sources.

    That news prompted Melaleuca CEO Frank VanderSloot to vow Thursday that he will boost his effort on behalf of propositions that limit collective bargaining, provide bonuses to about 80 percent of teachers and require online classes and laptops for every high school student. Opponents collected enough signatures to put repeal of the 2011 education laws on the Nov. 6 ballot.

    “We knew they were spending a lot of money, we didn’t know how much,” VanderSloot said. “There’s no way we can match that, but we are going to enter the fight.”

    VanderSloot is a prominent conservative Idaho political contributor and one of a handful of Mitt Romney supporters who have given $1 million or more.

    Though he said he can’t discuss proprietary polling, VanderSloot said the Idaho measures are trailing 3 1/2 weeks before the election. “When somebody puts a million bucks to say ‘no,’ I think it’s pretty normal to fall behind.”

    VanderSloot said the proponents’ financial situation has worsened because of a dispute between Secretary of State Ben Ysursa and a nonprofit group that reported raising $200,000 for broadcast ads to back the reforms. Ysursa says contributors names must be reported under Idaho’s sunshine law.

    Education Voters of Idaho transfered $200,000 to an affiliate, Parents for Education Reform. John Foster, the nonprofit’s spokesman, says the group is exempt from the disclosure requirement because of its federal tax status. Until the dispute is resolved, Foster said, the group has suspended spending money.

    Chief Deputy Secretary of State Tim Hurst said a Thursday letter from the Idaho attorney general’s office seeks a legal explanation from the group. “We’re waiting for them to tell us why they think they shouldn’t have to disclose their contributions.”


    Meanwhile, VanderSloot said he’s stepping into the breach. Melaleuca already has spent more than $200,000 on behalf of the “yes” campaign, but VanderSloot wouldn’t say how much more he’s prepared to spend.

    “The burden was not going to be on our shoulders, wasn’t supposed to be on our shoulders, shouldn’t be on our shoulders,” VanderSloot said. “But now with all these (Education Voters for Idaho) funds tied up, I’m just racking my brain to say, ‘Holy Smokes!’ We can’t let the unions in Washington, D.C., take control of our schools again.”

    A leader of the opposition, Rep. Brian Cronin, D-Boise, said his group is grateful to teachers across the country who contributed to fight laws opposed by Idaho teachers.

    “We’re proud to disclose who’s supporting this campaign,” Cronin said. “The Luna Laws’ supporters appear to be ashamed, hiding in the shadows and using elaborate campaign finance schemes to fund their advertising anonymously. We’d like to know what they’re hiding and why?”

    VanderSloot said he hasn’t contributed any money to Education Voters for Idaho or other groups that assert exemption from disclosure. His contributions have come in the name of Melaleuca. The Idaho Falls-based company gave $110,000 to the Idaho Federation of Republican Women, mostly for radio ads. Another $50,000 went to YES for Idaho Education.

    All told, three proponent groups have raised $501,000: $200,000 for Education Voters for Idaho; $165,000 for YES for Idaho Education; and $136,000 for the GOP women.

    VanderSloot also is independently buying full-page newspaper ads that he says cost him $20,000 a week the last several weeks. He’s also going to pay for a four-page newspaper insert. That spending doesn’t have to be disclosed until seven days before the election.


    Foster, of Education Voters for Idaho, wouldn’t say how much money the group has banked from unnamed donors pending a resolution of the dispute with Ysursa. “I will only say that we are pleased with donations toward this effort to promote education reform in Idaho,” Foster said.

    VanderSloot said he’s proceeding as if that group and its money are out of the picture. “Those people all gave their money under the understanding they were not going to be disclosed as donors,” he said.

    VanderSloot said he thought the union spending was unprecedented, but it is not. In 1986, unions spent $2.8 million in a failed effort to overturn Idaho’s right to work law. Proponents spent less than half that, $1.2 million, but won with 54 percent of the vote.

    Gov. Butch Otter, whose campaign manager is running Parents for Education Reform, said in a statement Thursday that he trusts the people of Idaho “to do the right thing and once again reject union scare tactics from these checkbook bullies.”

    Dan Popkey: 377-6438, Twitter: @IDS_politics

    Read more here: http://www.idahostatesman.com/2012/10/12/2307045/foes-of-luna-laws-outspend-backers.html#storylink=cpy



    Emilie Ritter Saunders reports Idaho has spent at least $195,000 to study how expanding Medicaid could impact people and the state’s budget.

    The Idaho Department of Health and Welfare has contracted with two out-of-state consulting firms, Utah-based Leavitt Partners and Seattle-basedMilliman.

    Under the federal health reform law, which was recently upheld by the U.S. Supreme Court, states can decidewhether to expand their Medicaid programs to include people living at 138 percent of the poverty line.  Estimates show, an expansion would add between 97,000 and 111,000 to the health care program in Idaho.  More than 236,000 Idahoans are currently on Medicaid.

    Before the law was upheld, and before Gov. C.L. “Butch” Otter formed two working groups to study a Medicaid expansion and a health insurance exchange, the Department of Health and Welfare was already contracting with Leavitt Partners to better understand what expanding Medicaid would look like.  That report was released at the end of September, and it cost $100,000.

    Most recently, the department confirmed a contract with Milliman costing $95,000.  Department spokesperson Niki Forbing-Orr says the Milliman contract will focus on determining the cost of expanding Idaho’s Medicaid program — that’s something missing from the Leavitt report.

    “This work has been contracted so the Medicaid expansion work group has all the tools it needs to make an informed recommendation to the governor,” says Forbing-Orr.

    The Medicaid work group has planned its next meeting for October 23.  However, Forbing-Orr didn’t know if this latest report from Milliman will be completed by then.


    Scott Evans reports in less than a month voters will have the opportunity to decide whether propositions 1, 2, and 3 remain law. When passed in the legislature the three measures were part of a comprehensive education reform package, but now voters could pass some and fail some. What happens then?   

    There are many people who are confused about these referenda. While some questions have answers, others don’t – at least not yet.

    Election Day is November 6th. Idahoans will vote to either repeal or uphold propositions 1, 2 and 3. Voting ‘yes,’ keeps the laws as they currently are. A ‘no’ vote would repeal the laws. Voters can vote yes on some and no on the others. This is not an all or nothing vote, and that includes the money backing the laws.

    “They are not financially dependent on one another,” said Melissa McGrath with the Idaho Department of Education.

    McGrath says House Bill 698, passed in 2012, made it so funds could not be shifted from one law to another. Between propositions 2 and 3 there’s $53 million budgeted to be distributed to schools this year.

    “If the laws are repealed on November 6th, there is uncertainty around whether or not the future funding can be distributed,” said McGrath.

    The bulk of that $38 million is for proposition 2, pay for performance.

    Every year the state pays districts five times. The next payment is set for November 15th, nine days after the election. That $38 million is supposed to go to districts on that date.

    “We will do everything legally possible to pay this payment on November 15th and to make sure that it ends up in teachers’ hands,” said McGrath. “It is uncertain whether or not that’s going to be possible if the law is repealed. And the reason we want to make sure people understand that is because we never want to promise a teacher that they’re going to get a bonus if there’s a possibility that they’re not going to.”

    The state notified districts last month that the issue of whether that money gets into the teachers’ hands is complicated. If prop 2 is repealed, the secretary of state will need to ratify the vote before the 15th. The attorney general and the courts will most likely get involved.

    “I think that there are a lot of questions out there, understandably so, but mostly because this has never happened before in the state of Idaho,” said McGrath.

    Proposition 3 deals with technology in the classroom and has $18.5 million attached to it. Schools have already received some of that money, but the bulk of it is set to be paid in February. Most of that money is for laptops or other devices. The state is still working on a contract with a distributor for those computers.

    “If the law is repealed before that contract is signed or a portion of that money goes toward that product then yes, that’s correct, that funding will not, we will not be able to use that funding,” said McGrath.

    If propositions 2 and 3 are repealed, then the money attached to each law would go back to an education stabilization fund or rainy day account.

    The legislature would then need to decide how best to use that money, but it will go to Idaho schools. If proposition 1 is repealed, that outcome is also unclear what will happen with teachers negotiating their contracts or tenure. We do know that the early retirement incentive for teachers would automatically be re-established. If voters repeal the laws, there are budget items that will automatically be re-established.

    Those three items amount to $18 million, but again, it’s unclear when schools would get access to that money.

    Here is a breakdown of what McGrath provided to KTVB:

    Here are the budget items for which we will lose authority to expend or distribute funds if the Students Come First laws are repealed on November 6, 2012:

    1.    Pay for Performance ($38,774,600) – Proposition 2

    2.    Technology (approx. $6,807,000 of $13,613,900 will not yet be distributed) – Proposition 3

    3.    High School Redesign Math/Science Teachers ($4,850,000) – Proposition 3

    4.    Dual Credit for Early Completers ($842,400) – Proposition 3

    5.    One-to-One Laptop Program, Year One (approx. $2,000,000 of $2,558,800 will not yet be spent) – Proposition 3

    TOTAL LOST FOR SCHOOLS: $53,274,000

    Here are the budget items that would be automatically re-established if the Students Come First laws are repealed on November 6, 2012, and for which distributions would then be made:

    1.    Early Retirement Incentive Program for Teachers ($3,500,000) – Proposition 1

    2.    National Board Certification Awards ($219,600) – Proposition 3

    3.    Return of re-allocated “5th Factor” funds to salary-based apportionment (14,789,200) – Proposition 3


    Links to information on Propositions 1, 2, 3:

    Idaho Department of Education website: studentscomefirst.org

    Questions as they will appear on November ballot

    Proposition 1

    Proposition 2

    Proposition 3

    Vote No website: votenoprop123.com


    Kristin Rodine reports with an estimated $4.3 million budget shortfall, the Nampa School District wants as many minds as possible to focus on potential solutions.

    Kim Emerson, one of a handful of teachers and parents who attended the new budget committee’s first meeting Tuesday, said she has two ideas right now — one to raise money and one to pare costs.

    “We could sell off some of the land we’re holding onto for future schools,” said Emerson, an Owyhee Elementary third-grade teacher whose children graduated from Nampa schools. “We’re not crowded. We have room for growth in the schools we have.”

    Also, she said, the district should take a hard look at cutting the cost of school buses, especially for transporting kids to athletic events and other extracurricular activities.

    Angela Locklin, who has two daughters in a Nampa elementary school, said she wants to make sure that teachers and students don’t bear the brunt of cuts — especially after hearing Tuesday that 84 percent of the district’s budget is salaries,mostly for teachers.

    District officials say that teachers who are under contract will not lose their jobs. But open positions have been frozen, increasing class sizes for some instructors.

    Many more community member suggestions are expected next Tuesday, when the panel meets again at 5:30 p.m. Many of those ideas will come from a survey expected to be posted on the district’s website Wednesday. District staff and parents will receive an email about the survey.

    At Tuesday’s meeting, Deputy Superintendent Josh Jensen presented data from the past two years showing that revenues and expenses were dramatically miscalculated — with millions of dollars mistakenly duplicated in two consecutive annual budgets.

    What Jensen couldn’t answer was specifically how those things happened.

    “I don’t know,” he said. “It doesn’t make sense.

    “The bottom line is we’ve been spending too much money. … And now it’s caught up to us.

    “Our first fatal flaw is it is obvious we were not performing adequate checks and balances” to make sure budget expectations matched reality, he said.

    Jensen said he and new budget officer Michelle Yankovich have been working to fix the district’s financial processes.

    He said the safeguards fell by the wayside three years ago amid budget cuts and staff changes, with staffers taking on additional duties. Jensen was in charge of the budget until about that time, then was promoted to oversee other operations in addition to finance.

    He said he feels responsible because budgeting remained one of the areas under his supervision.

    When the shortfall — initially estimated at about $2.8 million — was discovered over the summer, district leaders froze hiring and reduced the budgets for substitute teaching and supplies.

    But much more must be done to balance the budget for this school year, Jensen said.

    “We need to think outside the box,” he said. “We need to be creative.”

    Locklin said parents and other members of the public are essential for finding those solutions — not just in big-dollar items but in multitudes of smaller savings found by scrutinizing all aspects of district operation.

    “It’s the peanuts that really make the whole picture,” she said.

    Leigha Call, an East Valley Middle School social studies teacher and parent of two middle schoolers, said her main objective in participating in the deficit-solving process is “to make sure it doesn’t happen again, that there are checks and balances.

    “It’s not fair to our students and it’s not fair to our staff.”

    Kristin Rodine: 377-6447

    Read more here: http://www.idahostatesman.com/2012/10/10/2304427/how-will-nampa-schools-get-back.html#storylink=cpy

    Emilie Ritter Saunders reports Dr. Ted Epperly is CEO of the Boise-based Family Medicine Residency of Idaho, a program that gives medical students their last three years of training before they become doctors.  He was an Army physician for 21 years before returning to work in his native Idaho.  In addition to managing the residency program, Epperly is active in state and national health policy. 

    StateImpact Idaho spoke with him recently for our series on Idaho’s doctor shortage.  The state currently has a lower number of doctors per capita than every state in the nation except Mississippi.

    We wanted to include more from our interview with Epperly, so here is a portion that has been edited and shortened.

    Q:How has medical care in Idaho changed because of the shortage of doctors?

    A:What it does is slows down the ability to get appointments in a timely way, and then when you do get the appointment it’s usually for less time.  That’s a problem with our fee-for-service, volume-driven system.

    Part of what’s happened in health care reform is this idea of health care through an expanded medical home.  Which means the expanded team of a practice cares for people in the community in a proactive way — to keep them healthier, so they aren’t coming into a clinic as often. We could start to affect the volume of patients that needs to be seen.  The payment systems have to start paying for those services so physicians can provide them.  Right now, you don’t get paid to do that – so you have to wait until people get sick before they come into your clinic.  It’s just backwards.

    Q:The U.S. Supreme Court ruling on the federal health law leaves states to decide whether they want to expand Medicaid, the state health plan for low-income people. How does a possible Medicaid expansion in Idaho complicate things?

    A:First, I think it’s really important we do expand Medicaid in this state, so all people that qualify can have access.  That way, at least they have coverage so it doesn’t become a barrier to them seeking care.  The practicality of that though, is we don’t have enough primary care doctors in the state to easily absorb that.

    I did a rough calculation of the 100,000 or so new patients that will be added to the system.  That means about 40 to 50 new patients to every primary care physician in the state. That will present a timely access issue.  But that underscores the real issue we have, and that is not having enough primary care physicians.

    Our problem will be exacerbated for a while until we start to train up our workforce.  We also need to expand the use of physician assistants and nurse practitioners to augment the health care teams.  Family doctors working in conjunction with physician assistants and nurse practitioners should be what we expect.

    We have to think more collaboratively of how we work with people. And then we have to have a priority of training more primary care physicians for our communities.  Again, if we start taking care of problems in a more timely fashion, keeping people well instead of waiting until they get sick, then downstream we’ll save a lot of money in unnecessary emergency room visits, unnecessary hospitalizations.  ER’s are not a default – it’s not where people should be for common problems.

    Q:More than half of the residents in your program stay in Idaho. But why do so many other doctors chose to leave?

     A:I really admire our family doctors who want to tackle family practice, it’s hard work.  There are no short work weeks, and you pretty much need to be available to the community almost all the time.  So it’s hard to find the types of people who are totally dedicated to those communities in a way that would give up so much of themselves.  It’s a sacrifice.

    One thing we found in recruiting and retention in these communities is it’s not so much the physician –  the physician typically loves that kind of work.  One of the biggest drawbacks is their spouse.  If you’ve got a spouse from Chicago and you’re taking them to Salmon, Idaho – good luck.  If that spouse comes from a small rural community, the likelihood of them going there is greatly enhanced and the likelihood of them staying is unbelievably enhanced.

    The other factor that goes into retention is having a group of practice partners you like.  If you’ve got a good team to work with, that’s fun.  If you don’t or if you’re on your own, that’s a real turnoff.

    Another thing that needs to be remembered is the quality of the education program in the communities. If mom or dad feel the kids aren’t getting a good education in these rural communities, then they’ll leave.

    So, Idaho can’t lose the fact of the importance of K-12 education in all of Idaho.  We can’t retain a workforce in rural Idaho if we don’t have a good education system to keep them there.  The same for small businesses – the small business community has to be right to keep a physician in practice.

    There has to be a lot of things going right in a community to keep a doctor – if any of those things aren’t going right, it’s tough for a community to keep a physician.  And then if you don’t have health care in a community you can’t attract business, or teachers.  Health care, business and education are all interrelated.

    Q:What about the cost of practicing in a small community?

    A:Usually, it’s a sacrifice.  You’re going to make less in a small community. The average income of a doctor in a smaller community can be as much as 30 percent less.

    The scope of practice, though, tends to be better.  You get to use all the skills you’ve been trained to do.  From delivering babies, taking care of sick infants, older adults, a lot of end-of-life issues – and everything in between.  Many doctors love that large scope.  What happens in the bigger communities – quality of life might be better, but scope of practice is much narrower.

    Q:What could be done to entice people to stay, or to come here to practice?

    A:A couple of things.  The biggest would be the type of education programs we put in the state.  Idaho must see, a bigger investment in education, both at the medical student level and resident level.  It’s an investment the state needs to make.  And what I mean by that is having a medical school that’s providing a good number of students coming out of medical school – that could be in partnership with the University of Washington or other area schools.  But before that’s even in place, we have to have more residency programs.

    What happens after medical school is doctors go to three to five years of training.  We need multiple residencies in Idaho – not just in family medicine, but in general internal medicine, psychiatry, pediatrics and general surgery. That way, we become an importer of young physicians in training, we then train them in the state and the likelihood is they stay in the state.  If it’s just a medical school model we become a net exporter of medical students to other states that have residency programs.


    Melissa Davlin reports: For years, Idaho’s business community has lobbied the Idaho Legislature to repeal the personal property tax.

    In the months leading up to the next legislative session, that movement is once again gaining traction.

    Personal property tax includes a business’ moveable property, such as desks, office supplies, clothing racks, bookshelves, art and machinery.

    How would a repeal affect Idahoans? It depends on who you ask.

    The Business Owners

    What does it take to account for every office supply, every piece of medical equipment, every tool?

    A big time commitment, said Shawn Barigar, president and CEO of the Twin Falls Area Chamber of Commerce.

    “What we’ve heard from our business members is it takes a tremendous amount of time to track the specific items that end up being accounted for in the personal property tax,” Barigar said. “At the end of the process, it truthfully doesn’t generate a whole lot of dollars.”

    While the chamber hasn’t yet had its meeting about legislative priorities, “it’ll certainly be something we discuss at length,” Barigar said.

    The tax doesn’t just affect business owners currently set up in Idaho, said Nathan Lyda, president-elect of the Idaho Association of Realtors. Some surrounding states, including Utah, don’t have the tax, which may affect businesses’ decisions on where to locate.

    “It’s about growth in Idaho,” he said.

    And that affects everyone, including real estate agents with property to sell, Lyda said.

    In 2008, the Realtors association called it “the most hated tax in the state by those who pay it.” That position hasn’t changed, Lyda said.

    “Our association feels that it is a barrier to economic development,” he said.

    The Local Governments

    The problem with repealing a tax: Government needs money to operate, and if that money isn’t replaced, taxing districts may struggle.

    Right now, it’s difficult to estimate how big the impact of a repeal might be, said Gooding County Commissioner Helen Edwards.

    “There are so many variables,” she said.

    First, the Legislature needs to define personal property tax. For example, the Gooding County assessor classifies milk equipment in a barn as actual property, Edwards said, because it’s bolted to the floor.

    But if the Legislature defines that bolted-down machinery as personal property, the county will take a bigger hit.

    “If they say it’s personal property, that’s going to make a real difference,” she said.

    Then there’s the question of whether the state will allow districts to replace revenue. Even if they’re allowed to increase taxes elsewhere, Edwards pointed out that Idaho taxing districts have levy limits.

    The burden will be felt differently depending on the taxing district. Taxing districts that contain large quantities of public land, like Power County, rely more heavily on personal property tax collections than areas with more developed or agricultural land.

    In 2012, the city of Twin Falls collected $954,953 in personal property taxes, nearly 6 percent of its property tax collections.

    The Twin Falls Urban Renewal Agency also benefitted from personal property tax collections, receiving $178,405 in 2012.

    Future personal property tax collections would go up when Chobani opens, according to a letter from the city of Twin Falls to Senate President Pro Tem Brent Hill. When Chobani is added to the tax rolls, its personal property will provide an estimated $1.2 million in tax collections.

    The Lawmakers

    In August, Senate President Pro Tem Brent Hill, R-Rexburg, sent a letter to Idaho taxing districts asking how a personal property tax repeal would affect revenue and services.

    “My purpose in sending out the letter was not to encourage or discourage elimination of the tax,” Hill said in a Monday interview. Rather, he hoped to gather as much information as possible to educate lawmakers on the issue.

    Some are already familiar with the topic. House Assistant Majority Leader Scott Bedke, R-Oakley and a member of the House tax committee, said repealing the personal property tax has come up multiple sessions in a row.

    “It’s deja vu all over again,” Bedke said.

    The difference this time: Many of the lawmakers considering this new legislation will be new to the Statehouse. Between redistricting and retirements, the Legislature may see as much as a 40 percent turnover in its ranks in January.

    During the 2012 session, a group of lawmakers attempted to solidly define personal property, debating intricacies like whether to include machinery bolted to the floor, or utilities.

    But many of those who worked on those definitions are no longer in the Legislature, Hill pointed out. Rep. Dennis Lake, R-Blackfoot and chairman of the House Revenue and Taxation Committee, retired this year; Sen. Tim Corder, R-Mountain Home, lost his May primary race; House Caucus Chairman Ken Roberts, R-Donnelly, stepped down this summer after being appointed to the Idaho State Tax Commission.

    Bedke said he wants to repeal the tax, but acknowledged there are difficulties. Some counties with huge chunks of public land depend largely on personal property tax revenue for their budgets. Should the state force them to cut their budgets, replace that money with state general fund dollars, or allow them to shift the tax elsewhere?

    There’s no easy answer, Bedke said, and there hasn’t been for years.

    “I’m certainly willing to listen to any of the new ideas,” he said.


    Spokesman Review Editorial:  Idaho Superintendent of Schools Tom Luna complains that a possible voter overturn of his Students Come First reform plan will be a “disruption.”

    For a definition, check for synonyms under “democracy” in the household dictionary. Or online.

    Americans have been disruptive since the original Tea Party. That colonists might object to a tax on their beverage seems not to have occurred to the British Parliament.

    So too, apparently, with the reforms enacted by the Idaho Legislature in 2011 that prompted a drive that collected the requisite signatures on three repeal measures in just a little more time than it took the founders to ink the Declaration of Independence.

    Students Come First constricted collective bargaining for teachers, implemented a merit-pay system, and mandated computer-only classes for high school seniors.

    Rewarding better teachers and familiarizing every student with online education resources are good ideas. The Idaho Education Association was on board with pay-for-performance before the Legislature moved to fund potential raises by reducing pay for all teachers. That, and shifting more dollars to technology while restricting teacher negotiations to pay and benefit issues only – with no more money on the table – has utterly soured teacher relationships with Luna and legislators who supported the “Luna Laws.”

    Adding to the resentment: A follow-up measure that implemented the reforms on an emergency basis instead of holding off until the Nov. 6 election. That’s kind of a disruption, isn’t it?

    Trust Idaho Secretary of State Ben Ysursa to have a little more perspective. His comment to Northwest Cable News when the signatures were submitted to his office:

    “Obviously we have the state Legislature, but we also have the people who have reserved for themselves legislative power to reject legislation, that’s the referendum. That’s the people’s right to legislate, and that’s on equal footing with the Legislature’s right to legislate.”

    The odds remain in the Legislature’s favor. Only one of four previous efforts to undo the lawmakers’ work has succeeded.

    But disruption happens.

    The Washington Legislature tried to close the state budget gap in 2010 by raising or imposing new taxes on beer, pop, bottled water and candy. The levies would have raised well over $100 million, but voters spiked them all in that November’s election. More budget cutting ensued, and continues, unsettling the lives of thousands of state residents.

    For big-time disruption, check out the Chicago teachers’ strike, another tussle involving merit pay in a system where the average teacher takes home more than $70,000 per year.

    Idaho voters will soon be subjected to very expensive campaigns from both sides of the education reform debate. If students truly come first – not politics – the disruption can be kept to a minimum.


    Emilie Ritter Saunders reports The Idaho Statesman’s latest editorial is in response to two stories StateImpactposted on Idaho’s education funding cuts.

    The Center on Budget Policy and Priorities released a report last week that shows education cuts in Idaho have been among the deepest in the nation over the last five years.

    CBPP’s report finds per-student spending in Idaho has dropped 19 percent since 2008. Just three states have cut more.

    But the Idaho Department of Education says CBPP’s measurement isn’t accurate.  The department says per-student spending has dropped nearly 12 percent. That’s just looking at fiscal years 2008 to 2011.

    CBPP’s method accounts for inflation.  The Department of Education’s method does not.

    Here’s what the Statesman writes:

    “By no means is Idaho alone. As the report points out, 35 states cut per-pupil spending over the past five years, and 26 reduced this spending from 2011-12 to 2012–13. What is troubling is the fact that, according to this report, Idaho’s cuts were among the deepest in the nation — and continued, to a lesser degree, even when the economy showed signs of improvement.

    These are the kind of decisions that keep Idaho’s per-pupil spending holding firm at No. 50 in the nation.

    State schools superintendent Tom Luna’s office disputes the report’s math. Spokeswoman Melissa McGrath tells StateImpact Idaho that per-pupil spending dropped nearly 12 percent from 2008 to 2011.

    That isn’t much of an improvement.” — Idaho Statesman

    The Center on Budget and Policy Priorities ranked the 50 states in order of which states cut per-student spending the most.  By their measure, Idaho is at number four.  By the Idaho Department of Education’s measure, the state is still in the top half, at number 12.

    Idaho Statesman Editorial:  With sufficient repetition, the Statehouse mantra has graduated to governing principle. Spending money does not ensure quality of education.

    But spending money on schools — or cutting K-12 budgets — brings a state’s priorities into sharp focus.

    Here’s the grim Idaho snapshot. The numbers come from the Center on Budget and Policy Priorities, a Washington, D.C., think tank that focuses on “fiscal policy and public programs that affect low- and moderate-income families and individuals.”

    - From 2007-08 to 2012-13, when adjusted for inflation, per-pupil spending in Idaho dropped by 19 percent. Only three states had a steeper decline.

    - In terms of dollars, again adjusted for inflation, Idaho’s five-year decline comes to $1,083 per student, the third-largest dollar drop in the nation.

    - Even in the past year — as the state’s fiscal picture improved to the point that legislators decided to reduce corporate and top-end personal income tax rates, while socking other money into savings — support for K-12 still eroded slightly. Inflation-adjusted spending dropped another $30 per pupil, a 0.7 percent decline.

    By no means is Idaho alone. As the report points out, 35 states cut per-pupil spending over the past five years, and 26 reduced this spending from 2011-12 to 2012-13. What is troubling is the fact that, according to this report, Idaho’s cuts were among the deepest in the nation — and continued, to a lesser degree, even when the economy showed signs of improvement.

    These are the kind of decisions that keep Idaho’s per-pupil spending holding firm at No. 50 in the nation.

    State schools superintendent Tom Luna’s office disputes the report’s math. Spokeswoman Melissa McGrath tells StateImpact Idaho that per-pupil spending dropped nearly 12 percent from 2008 to 2011.

    That isn’t much of an improvement.

    Disagreeing over the numbers doesn’t change two indisputable points.

    First, Idaho’s cuts have placed more pressure on local property owners, who have voted to approve levies to help make up the difference. Here, Idaho voters should pat themselves on the back. The real estate bust has been especially acute in Idaho, yet voters have still shown a real willingness to backfill local school budgets.

    Second, Students Come First, the Luna K-12 overhaul, has its roots in the budget crisis. After his 2010 re-election, Luna pieced together an education plan premised on the idea that tight K-12 budgets were the new normal. The results — laws to expand online learning technology, establish teacher merit pay and rewrite the teacher collective bargaining process — will be on the statewide ballot Nov. 6.

    Whether voters ratify or reject the Luna laws, one thing won’t change: Idaho’s investment in K-12 ranks among the stingiest in the nation. By any measure, the past few years have made matters worse.

    When voters elect legislators in two months, they need to ask themselves a question: Do they want to do something about this, or are they, like their elected officials, comfortable bringing up the rear?

    “Our View” is the editorial position of the Idaho Statesman. It is an unsigned opinion expressing the consensus of the Statesman’s editorial board.


    Betsy Russell reports Idaho’s state tax revenue for August came in 1.1 percent below forecasts, but 3.7 percent higher than last August, according to the state Division of Financial Management. Overall, general fund tax collections for the second month of the fiscal year were $197.6 million. Individual income tax withholding saw the biggest shortfall compared to projections, pushing down individual income tax collections for the month to 7.2 percent below the forecast. But sales taxes came in above forecast by 2.5 percent for the month, and were 15.2 percent over last August’s figure. Corporate income tax, product taxes and miscellaneous revenue all beat projections. For the fiscal year to date, state tax revenues are running 1.3 percent below forecast but 4.2 percent above last year’s level; you can read the latest General Fund Revenue Report here from the DFM.


    D.F. Oliveria: A preview of Idaho Statesman editorial for Tuesday:

    With sufficient repetition, the Statehouse mantra has graduated to governing principle. Spending money does not ensure educational quality. But spending money on public schools — or cutting K-12 budgets — brings a state’s priorities into sharp focus. Here’s the grim Idaho snapshot, courtesy of a study from the Center on Budget and Policy Priorities, a Washington, D.C, think tank:

    • From 2007-08 to 2012-13, when adjusted for inflation, per-pupil spending in Idaho dropped by 19 percent. Only three states had a steeper decline.
    • In terms of dollars, again adjusted for inflation, Idaho’s five-year decline comes to $1,083 per student, third highest in the nation.
    • Even in the past year — as the state’s fiscal picture improved to the point that legislators decided to reduce corporate and top-end personal income tax rates, while socking other money into savings — support for K-12 still eroded slightly. Inflation-adjusted spending dropped another $30 per pupil, a 0.7 percent decline. Full editorial here.

    Question: Do you think a state can boast of educational quality even thought it does a poor job of funding education?


    AP reports: Idaho’s taxpayers could save $380 million over six years by agreeing to expand Medicaid coverage for more low-income people under President Barack Obama‘s health care overhaul, according an analysis by the Spokesman-Review.

    Currently, costs of caring for Idaho’s indigent population — often poor, single men with no children who don’t currently qualify for Medicaid — are borne by counties and the state as part of Idaho’s “Catastrophic Health Care Fund.” The total bill is expected to top $60 million next year.

    Under Obama’s law, Medicaid would be expanded to cover many of those people, with the federal government picking up 100 percent of the tab until 2016. Support is pared gradually to 90 percent after 2020.

    Though the U.S. Supreme Court upheld the federal Patient Protection and Affordable Care Act in June, justices ruled states couldn’t be punished if they didn’t expand their Medicaid programs. Gov. C.L. “Butch” Otter has a committee investigating what Idaho should do, with their recommendations due in a few weeks that are meant to help lawmakers decide what to do.

    House Majority Leader Mike Moyle, a conservative Republican who has argued that “Obamacare” is an inappropriate intrusion of government, opposed expanding Medicaid coverage in a guest editorial to Idaho newspapers he penned in July with House Speaker Lawerence Denney.

    “Resistance usually comes at a cost, but the state of Idaho must resist Obamacare,” they wrote. “The cost of not resisting will be much higher.”

    On Monday, Moyle, R-Star, said he’s still leaning against expanding the program, but he wants to see what Otter’s panel comes up.

    “If I were to vote today, I would not vote to expand Medicaid and for health care exchanges on the state level,” he told The Associated Press. “But having said that, we still need to get the facts.”

    Other GOP lawmakers, however, are already pushing to accept the expansion, with Sen. Joyce Broadsword, R-Sagle, telling the Spokesman-Review (http://bit.ly/QeN9mZ) she thinks the changes will provide relief for taxpayers — and encourage patients to take health care into their own hands.

    “We’ve got a huge population out there of uninsured that are putting off health care needs, especially catastrophic care, because they can’t afford to go to the doctor,” said Broadsword, who is retiring from the Idaho Legislature to run for the Bonner County Commission.

    Catastrophic fund managers estimate Idaho will spend $61 million next year on indigent medical care, split between county property taxes and state general funds. With costs expected to escalate by at least 7 percent annually for the next six years, the cost for the program would be $436 million.

    Taking those changes into account, as well as the federal coverage starting at 100 percent for the newly eligible Medicaid recipients, Idaho would save $380 million over the next six years by replacing its indigent medical program with a Medicaid expansion, the newspaper reported.

    Kaiser Foundation study suggested Idaho would spend between $101 million and $133 million over the six years to expand its Medicaid program to more than 85,000 currently uninsured patients.

    That includes many beyond those eligible for the indigent program. By that estimate, the state would save at least $300 million compared to what it’s spending now from state and county funds on indigent care.

    House Minority Leader John Rusche argues that foes of the Medicaid expansion have elevated narrow ideological objections over the size and reach of government over more pragmatic considerations regarding the Affordable Care Act, including what’s best for Idaho.

    Rusche, D-Lewiston, a retired physician and insurance executive, says it’s a “no-brainer.”

    “A good business analysis will show that for the citizens of Idaho, there’s an advantage to the Medicaid expansion,” he said.


    D.F. Oliveria: A recent report by the non-partisan research organization Center on Budget Policy and Priorities says education cuts in Idaho have been among the deepest in the nation over the last five years. AsStateImpact reported last week, CBPP’s study shows per-student spending in Idaho has dropped 19 percent since 2008. Just three states have cut more. The Idaho Department of Education takes issue with these figures and spokesperson Melissa McGrath says CBPPs report isn’t an accurate measure. “The fact is the state hasn’t reduced education funding per student by 19 percent,” McGrath says. Here’s where it gets complicated/Emily Ritter Saunders, StateImpact. More here(Molly Messick StateImpact photo: After the Council School District lost its shop program, locals donated time, goods and services to start it up again)

    Question: Do you think public schools in Idaho are funded as well as they could be?


    Emilie Ritter Saunders reports a recent report by the non-partisan research organization Center on Budget Policy and Priorities says education cuts in Idaho have been among the deepestin the nation over the last five years.

    As StateImpact reported last week, CBPP’s study shows per-student spending in Idaho has dropped 19 percent since 2008. Just three states have cut more.

    The Idaho Department of Education takes issue with these figures and spokesperson Melissa McGrath says CBPPs report isn’t an accurate measure.

    “The fact is the state hasn’t reduced education funding per student by 19 percent,” McGrath says.

    Here’s where it gets complicated.

    The Center on Budget and Policy Priorities applied a standard methodology across all 50 states to compile its report.  One of the report authors, Phil Oliff says they looked at each states’ “major education funding sources” and emergency federal spending — think stimulus dollars — over the last five budget cycles, beginning in 2008.

    In Idaho, Oliff says data came directly from the annual Legislative Budget Book.  To calculate how much Idaho spends per-student, CBPP used enrollment numbers from the federal Department of Education.  Those are tallied on the first day of school.

    Finally, CBPP adjusted its year-over-year spending calculations for inflation.  Oliff says if Idaho’s Education Department doesn’t adjust for inflation, that’s likely the difference.

    The state Education Department maintains per-student spending has dropped nearly 12 percent, but that’s just looking at fiscal years 2008 to 2011.

    The director of the Idaho Center for Fiscal Policy Mike Ferguson published a reporton the decline of the state’s share of education spending back in April.  He also was consulted by CBPP on their report.

    “Whether it’s 12 percent or 19 percent, it’s still a pretty big decline,” says Ferguson. He says it boils down to a different way of counting the same thing.  Ferguson says adjusting for inflation makes more sense statistically, because it takes into account the change that happens over time in price level.

    And when inflation is applied, the percentage decline in education spending will go up.

    Ferguson says CBPP’s method can be useful because it looks at all states over time, rather than the year-to-year accounting that happens at the individual state level.  “It’s a consistent comparison across geography,” Ferguson says, “and it’s important to see how Idaho fits in.”

    Still, Idaho Department of Education spokesperson McGrath says, “I just don’t think it’s an accurate portrayal of school finance or the money we’ve distributed to public schools, whether that’s in a single year or since 2008.”


    Betsy Russell reports every Tuesday morning at 9, they file in, some crying, some defiant – all with big medical bills they can’t pay, pleading with Kootenai County commissioners for help.

    “It’s at times frustrating, and at times gut-wrenching,” said Commissioner Dan Green, “especially when I have people that really need the help and then they don’t qualify for the program. And then I see people that we are forced to help that think it’s some sort of entitlement.”

    The emotional scene is played out in each of Idaho’s 44 counties, which state law makes the last resort for uninsured patients who can’t pay their medical bills.

    Idaho’s unique system for paying the catastrophic medical bills of indigent patients – which relies solely on local property taxes and the state’s general fund – makes it the state that would possibly benefit the most from the expansion of Medicaid under the federal Affordable Care Act. The legislation would expand the federal-state medical insurance program for the poor to cover the same population that now is at the mercy of county commissioners, and do it almost entirely with federal money.

    If Idaho were to replace its current system with a Medicaid expansion, the state and its property taxpayers could save hundreds of millions of dollars over the next six years, according to a Spokesman-Review analysis of current and projected costs.

    But some prominent Idaho politicians already have come out against the move, saying they want no part of “Obamacare.” Idaho House Speaker Lawerence Denney and Majority Leader Mike Moyle wrote in an op-ed piece last month, “Resistance usually comes at a cost, but the state of Idaho must resist Obamacare. The cost of not resisting will be much higher.”

    Gov. Butch Otter hasn’t yet decided; he’s instead waiting for the results of a working group that’s studying the issue.

    House Minority Leader John Rusche, D-Lewiston, who is a retired physician, calls the decision a “no-brainer.”

    He called Denney and Moyle’s stance a “political statement” that’s not “borne out in fact.” Rusche said, “A good business analysis will show that for the citizens of Idaho, there’s an advantage to the Medicaid expansion.”

    Qualification based on incident, not income

    Although 23 states make counties responsible for indigent patients’ medical bills, most handle that through county hospitals, which rely heavily on the Medicaid program as a main payer of the bills. Idaho doesn’t.

    Washington handles health care for the poor at the state level.

    Idaho also has a unique way of deciding who qualifies for its indigent care program: It’s not by income level. Instead, it’s by incident. If a patient has run up a hospital bill that the patient, tapping all his or her resources, can’t pay off in five years, the patient qualifies.

    But as soon as a patient qualifies, the county slaps a lien on everything the patient owns in an attempt to recover the money. Although the money is supposed to be paid back, it seldom is.

    “We only collect, I think, 10 to 12 percent of that money,” Green said. “It’s like trying to get blood out of a turnip, you know?”

    Last year, Kootenai County spent $2 million in property tax funds on indigent medical care. Counties pay the first $11,000 of each bill, then the state’s Catastrophic Health Care Fund kicks in to pay the rest. Between the counties and the state, the program is expected to cost close to $60 million this year.

    “People come in here with anything from something very minor to lung cancer or brain cancer,” Green said. “There are some very large bills. … They can be mental health issues, physical health … all of it.”

    The commissioners only see those who are appealing a decision by county staff to deny benefits. The appeals, because they discuss people’s medical issues, are heard in closed session.

    “It’s really tough,” said Tony Poinelli, deputy director of the Idaho Association of Counties. “It’s really hard to estimate what your costs are going to be.”

    Because state law caps the growth in county property tax budgets at 3 percent a year, counties with unexpectedly large bills “have to borrow or steal from other funds in order to do it,” Poinelli said. “The other part is that medical costs have just continued to escalate.”

    Some happy to see the program go

    Counties had no state help with the costs until 1994, when the state catastrophic fund was created. “It’s one thing when your indigent care is setting a broken arm or something,” Rusche said. “But when you’re talking about cancer treatment, the costs get more and more and more.”

    Costs for Idaho’s program ballooned over the past decade, jumping from $19 million in 2000 to $42 million in 2008. At that time, state lawmakers, led by Senate Finance Chairman Dean Cameron, R-Rupert, instituted major money-saving reforms in the program, including requiring every applicant first to be screened for Medicaid eligibility. Close to 10 percent qualified, diverting them out of the indigent program into one that’s 70 percent federally funded. Other changes diverted other patients into various new federally funded programs, but those are expiring in the next two years.

    Growth slowed, but it’s now expected to start climbing again. “Unless we can come up with some kind of a rabbit out of a hat, we’re going to see some of the trends start going back up,” said Roger Christensen, a Bonneville County commissioner and chairman of the state’s Catastrophic Health Care Fund Board, which oversees the program.

    “It’s a complicated system put together in law over years,” Christensen said. “It’s difficult to administer.” Christensen, who has served as a county commissioner for 18 years and headed the catastrophic fund board – an unpaid position – for five years, joked, “I get paid so well it won’t break my heart if I don’t have this job.”

    Others also would be happy to see the program go. Steve Millard, president and CEO of the Idaho Hospital Association, said: “It’s a very complex program; there’s a lot of litigation involved and a lot of expense involved in its administration. We would be happy if something replaced it, sure. And so would the counties – I think we’re on the same page on that.”

    Paul Beddoe, associate legislative director for the National Association of Counties, said states are “all over the map” in how they now handle health care costs for the uninsured poor, but said, “I have not heard of a system like Idaho’s.”

    The impact of a Medicaid expansion – which the U.S. Supreme Court ruled in June is optional for states under the national health care reform law – will vary in every state, Beddoe said. But he said in states like Idaho, it’s important to have counties at the table, “speaking for the property taxpayers and really for the needs of the community.”

    Sen. Joyce Broadsword, R-Sagle, is the vice chair of the Senate Health and Welfare Committee, but she’s leaving the Legislature after this year and running for a seat on the Bonner County Commission.

    “I am in favor of expanding (Medicaid), mostly because we’ve got a huge population out there of uninsured that are putting off health care needs, especially catastrophic care, because they can’t afford to go to the doctor,” she said. “And if we can get people doing preventative care and going to the doctor early and catching melanomas before they’re bad enough to kill a person or go through major chemotherapy, if we can touch obesity before they develop diabetes or heart disease and get them on track to being healthy, it’s going to be, in the long run, a healthier population and a money-saver for the state’s accounts.”

    Plus, she said, “As a potential county commissioner, I think it would be beneficial for my county. It could be a tax savings to the people of my county.”

    Six-year cost of program: $436 million

    The numbers are remarkable. Fund managers estimate Idaho will spend a projected $61 million next year on its catastrophic program for indigent medical care, roughly split between county property taxes and state general funds. With costs expected to escalate by at least 7 percent a year for the next six years, the total six-year cost for the program would be $436 million.

    The Medicaid expansion would cover at least 90 percent of those currently using the catastrophic health care (CAT) program. Only those who make too much money to qualify for Medicaid, but who qualify for CAT because their medical bills are so high, wouldn’t be included. Over the six years, 90 percent of the cost comes to $393 million.

    The Medicaid expansion would be 100 percent federally funded for the first three years: 2014 through 2016. The federal match would drop to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and would be 90 percent in 2020 and beyond. The state would pick up the difference.

    Taking into account all those percentages, Idaho would save $380 million over the next six years by replacing its indigent medical program with a Medicaid expansion.

    A Kaiser Foundation study that estimated costs for all states of expanding Medicaid suggested Idaho would spend between $101 million and $133 million over the six years to expand its Medicaid program to more than 85,000 currently uninsured patients. That includes many beyond those eligible for the CAT program. But even by that estimate, the state would save at least $300 million compared to what it’s spending now from state and county funds on indigent care.

    “Most of the cost of the new expansion will be borne by the federal government,” the Kaiser study concluded.

    Christensen, the chairman of the catastrophic fund board, said he’s not wading into the political decision; he’s leaving that to state lawmakers. “All we can do is try to give the Legislature the idea of what the program will potentially cost, as realistically as we can,” he said. “Then those are the numbers they have to take and decide what’s best for the state of Idaho.”


    Betsy Russell reports there’s a what-if question being debated in Idaho politics that matters quite a bit: What if voters in November reject Propositions 1, 2 and 3, repealing state Superintendent Tom Luna’s Students Come First school reform laws?

    The laws, passed in 2011, already are being phased in. If voters opt to repeal them in the referendum vote, that would stop.

    The laws rolled back teachers’ collective bargaining rights, imposed a new merit-pay bonus system, and called for providing a laptop computer for every Idaho high school student and a new focus on online learning, among other changes.

    The first laptops are to be distributed this fall to teachers, with the first third of high school students getting them next fall. This year’s public school budget includes $38.8 million for the merit-pay bonuses for teachers, $13.6 million for technology and more than $2.5 million for laptops.

    Luna, who unveiled his budget request for the 2013-’14 school year last week, said he had no alternative proposal if the measures are voted down and decried the push as posing a major midyear disruption for schools.

    “We did not write these laws based on a referendum,” Luna said. “Now the opponents want to bring this to a screeching halt.”

    In 2011, when opponents began gathering signatures for repeal of the new laws, legislators pushed through three follow-up bills so that they’d take effect right away. Otherwise, the laws would have been put on hold until after the 2012 referendum vote.

    If they’re repealed now, they’d undo a reform package that’s already being put into effect.

    Luna suggested asking opponents of the reform laws about that. “I’m very curious as to what their plan is for managing this disruption,” he said. “We’ve made it very clear in the past that you cannot cut school budgets in the middle of the school year, and that’s what this amounts to.”

    Here’s how the process would work: If the three measures are defeated, much of the $60.5 million now tabbed for laptop computers, teacher merit-pay bonuses, tech upgrades and other Students Come First reforms would sit unallocated within the public school budget. Some would be used to reinstate programs the laws eliminated, such as a 99 percent funding “floor” for school districts that lose large numbers of students from one year to the next, and a $14.8 million allocation to teacher and administrator salaries. If lawmakers took no further action, the remaining money, roughly $33 million, would flow into Idaho’s public education stabilization fund, a state savings account for schools, at the end of the school year.

    But when the Legislature convenes in January, it could redirect those funds through a supplemental appropriation rather than just let them sit all year. If lawmakers sent the money out as discretionary funds to school districts, districts would decide how to spend it. The portion of Idaho’s public school budget that goes out to districts as discretionary funds has been sharply cut in recent years.

    Legislative budget analyst Paul Headlee, asked about the process, said: “They could do that. They could put it into salaries. They could even take it out of the public schools budget and put it somewhere else in the state budget.”

    Mike Lanza, chairman of Vote No on Propositions 1, 2, 3, the group urging repeal of the Students Come First school reform laws, said: “Consistent with what we’ve said all along, we want to see control of local schools returned to local school boards and educators. So the money that has been appropriated for public schools should rightly go to public schools, but without those strings attached. Our schools need those resources. They’ve been shortchanged for too many years.”

    Luna said he thought opponents should have proposed alternatives or changes to the reform laws he championed rather than attempting to repeal them at the ballot box. “They chose to go at this with a meat ax and create such a disruption to our schools,” he said.

    Lanza responded.

    “It sounds to me like Superintendent Luna is complaining that it’s greatly inconvenient for him and his office that the people of Idaho have decided they want the final say on his laws,” he said. “His problem seems to be with the democratic process. There are many of us in the state, as evidenced by how many signatures we collected in a short time, who think that Tom Luna is the one who has created this disruption in the schools, and it’s already under way, and that we’re going to be better off once we repeal these laws.”

    It’s an exchange that gives just a hint of how hot the debate will be between now and Nov. 6 over the school reform referenda. Both sides are gearing up for a fight.

    With Republican nominee Mitt Romney all but guaranteed to carry Republican-dominated Idaho, the presidential race is far from the hottest thing on Idaho’s general election ballot – instead, it’s the school laws.


    Betsy Russell reports there’s a what-if question being debated in Idaho politics that matters quite a bit: What if voters in November reject Propositions 1, 2 and 3, repealing state Superintendent Tom Luna’s Students Come First school reform laws? The laws, passed in 2011, already are being phased in.

    Here’s how the process would work: If the three measures are defeated, much of the $60.5 million now tabbed for laptop computers, teacher merit-pay bonuses, tech upgrades and other Students Come First reforms in the current year would sit unallocated within the public school budget. Some would be used to reinstate programs the laws eliminated, such as a 99 percent funding “floor” for school districts that lose large numbers of students from one year to the next, and a $14.8 million allocation to teacher and administrator salaries. If lawmakers took no further action, the remaining money, roughly $33 million, would flow into Idaho’s public education stabilization fund, a state savings account for schools, at the end of the school year.

    But when the Legislature convenes in January, it could redirect those funds through a supplemental appropriation rather than just let them sit all year. If lawmakers sent the money out as discretionary funds to school districts, districts would decide how to spend it. The portion of Idaho’s public school budget that goes out to districts as discretionary funds has been sharply cut in recent years. Legislative budget analyst Paul Headlee, asked about the process, said: “They could do that. They could put it into salaries. They could even take it out of the public schools budget and put it somewhere else in the state budget.”

    You can read my full Sunday column here, including what both sides are saying about the what-if question, and what it portends. With GOP nominee Mitt Romney all but guaranteed to carry Republican-dominated Idaho, the presidential race is far from the hottest thing on Idaho’s general election ballot – instead, it’s the school laws.


    Rachael Daigle reports according to a report released Sept. 4 by the Center on Budget Policy and Priorities, per-student spending is down from last year in 26 states. Also according to the report, per-student spending is below 2008 levels in 35 states.

    From Fiscal Year 2008 to Fiscal Year 2013, per-student funding in Idaho, adjusted for inflation, has decreased $1,083, according to the report. Idaho ranks fourth in the nation for student cuts in that same time frame, decreasing per-student funding by 19 percent. Arizona ranks first in funding cuts with a 21.8 percent change, followed by Alabama at 21.7 percent and Oklahoma at 20.3 percent.

    “By the Numbers,” a Boise Weekly feature published August 24, 2011, detailed per-student spending in Idaho, comparing the state spending to national levels, as well as district by district breakdowns throughout Idaho. From that report:

    The figure provided for money spent per student in the Nampa School District represents the amount from all funds. The amount spent per student from general funds is $5,226.

    • The figure provided for money spent per student in the Nampa School District represents the amount from all funds. The amount spent per student from general funds is $5,226.

    Melissa Davlin reports this fall, expect to see a taxpayer-funded voter’s guide show up in your mailbox.

    Before you read it, know the information isn’t vetted.

    This year, the Secretary of State’s Office is spending about $250,000 on a voter’s guide sent to every house and post office box in the state. Those guides contain arguments from campaign strategists both for and against ballot initiatives.

    Though the guide is meant to educate voters, the secretary of state has no legal authority to fact-check or ensure the information is accurate, and no ability to allow campaigns to edit what they’ve submitted after the deadline.

    That means campaigns have unfiltered communication with voters, funded by taxpayers.

    Is Fact-checking Censorship?

    This general election, the guide includes arguments for and against Propositions 1, 2 and 3, otherwise known as the referendum on the Students Come First education reform laws passed by the Idaho Legislature in 2011.

    In the guide, opponents say that Proposition 3, the laptops for students legislation, is an unfunded mandate — a claim contested by the law’s proponents.

    In August, Idaho Department of Education spokeswoman Melissa McGrath told the Associated Press that the Legislature is statutorily required to fund the mandates. (In response, campaign strategist Brian Cronin claimed the $60 million program lacks stable long-term funding, even if the state is required to fund it.)

    Despite the controversy, the argument appears in the voter’s guide. But there is no provision in Idaho Statute that allows the secretary of state to edit or fact-check statements for accuracy.

    And that’s how the Secretary of State’s Office wants to keep it, said Chief Deputy Secretary of State Tim Hurst.

    “The problem that we get into is when we start editing them, then how far do you go? And then it becomes… are we, in fact, censoring them?” Hurst said.

    The Secretary of State’s Office does do minor edits like spellchecking, Hurst said.

    “But we have no authority to censor them, and that’s what some people would interpret (fact-checking) as,” he said.

    The guide does say that the views expressed are not those of the secretary of state, Hurst said. The guide also allows for 250-word rebuttals from each side to counter claims.

    No Edits Allowed

    The statute also doesn’t allow for contributors to edit or change their submissions after the deadlines have passed, even if the arguments haven’t yet been printed.

    According to emails and letters obtained by the Times-News, Sen. Dean Cameron, R-Rupert, asked the secretary of state to remove a 2011 quote of his that the Idaho Education Association included in a rebuttal argument against Proposition 3.

    “I’m voting against this bill because… not one stakeholder is supporting it — not the superintendents, not the school boards, not the teachers, not the parents. Every single stakeholder… has testified opposed to it,” the quote says.

    Cameron said the comment in a public forum, and it was quoted in newspapers. But in his letter to the secretary of state, Cameron pointed out he was debating the original legislation, not the effort to repeal Proposition 3, and that the quote is out of context.

    In an email to the secretary of state, Idaho Education Association Executive Director Robin Nettinga said she would respect a decision to edit the argument.

    In his response to Cameron, Secretary of State Ben Ysursa told Cameron that he had no legal authority to allow edits and rejected Cameron’s request.

    The Only Exception

    There has been one exception. In 1994, one initiative sought to prohibit protections for gays and lesbians in Idaho code.

    One of the arguments submitted for the voter’s guide claimed an Idaho deputy attorney general was a homosexual, Hurst said. The secretary of state took out the man’s name after he threatened to sue for libel. (That November, voters narrowly defeated the initiative.)

    But because Cameron’s comments aren’t libelous and were made in a public forum, this is a different situation, Hurst said.

    Nettinga and Cameron both said Nettinga asked if she could use Cameron’s quote, but there was a misunderstanding on how it would be used.

    Both contacted the Secretary of State’s Office with the request to edit the argument on Aug. 2, one day after the deadline for submission and before any of the arguments had been published.

    But Ysursa said he was bound by both code and precedent to not allow the edits.

    “After consulting with the office of the Attorney General and based on my own analysis, I can only conclude that I do not have the statutory authority to grant your request,” Ysursa wrote.

    Cameron said he understood the decision, but was frustrated, as he had hoped to stay out of the referendum debate.

    “In my opinion, there would have been no harm whatsoever to allow those quotes to be removed and allow (the campaign) to rewrite that paragraph,” Cameron said Friday.


    Maureen Dolan reports trustees in the Coeur d’Alene School District could have certified an emergency levy Friday that would have brought an additional $260,579 into the district’s coffers and increased local property taxes, but they didn’t.

    During a meeting at the district’s administration building, school board members agreed with a recommendation from Superintendent Hazel Bauman, who suggested they forgo the tax levy opportunity. Bauman pointed to the recent voter approval of a $32.7 million facilities bond, and the district’s pending need to ask voters to approve a supplemental maintenance and operations levy later in the school year, as the main reasons for her suggestion.

    Before making her recommendation, Bauman detailed items the district needs due to growth in student attendance including classroom furniture, textbooks, and school buses and drivers to cover several new KTEC routes.

    Bauman also said the district is facing a $3 million shortfall for the next school year, “if everything stays the same,” including an existing annual $12.9 million voter-approved supplemental levy that will expire in June.

    “Even notwithstanding all of those pressures, I think the wise and thoughtful approach to taxes right now in our community would be to not levy this,” Bauman said.

    Idaho law allows school boards in growing districts to seek emergency school fund local property tax levies during the first weeks of school each fall, without voter approval. Last year, 10 of Idaho’s 115 school districts received emergency levy dollars; none of those districts are in Kootenai County.

    School district budgets are set each year, and submitted to the Idaho Department of Education, several months prior to the first day of school. If an unexpected influx of students shows up for classes, the emergency levy provides an optional mechanism for school boards to seek property tax relief to cover the costs of educating those students.

    Coeur d’Alene School District’s average daily attendance for the first three days of school was up by 60 students this year, making the district eligible for the $260,579.

    School board chair Tom Hamilton said that while the amount of money isn’t insignificant, he questions whether “it’s worth testing taxpayer tolerance to add an additional tax without their consent.”

    “It’s tough because the needs are real, and nobody doubts that … What I look to is March and the fact that I don’t think anyone denies we’re going to have to run an M and O (maintenance and operations) levy,” Hamilton said.

    Board members are aware, he said, that they’re going to have to find a way to reduce the amount of the upcoming supplemental levy by finding ways to cut district expenses.

    “I think this board’s got a lot of work to do to try to help the administration find potential savings before that time rolls around,” Hamilton said.

    Most of the funding to support educational services in Idaho’s public schools comes from two sources – state funds based on average daily attendance and voter-approved supplemental levies. The state and supplemental levy funds cannot be used to build or make major renovations to school facilities, so districts must ask local taxpayers to support separate facilities levies and bonds like the $32.7 million measure Coeur d’Alene district voters passed on Aug. 28. The school district cannot use any of those multi-million dollar bond funds on any school operations costs.

    The shortfall of $3 million the district anticipates facing in the next budget year exists because those funds originally came into the district’s budget as one-time federal stimulus dollars which the district has been maintaining by dipping into its reserve fund. District business manager Julie Day said they have reached the point where there aren’t enough reserve funds to continue that remedy.

    During Friday’s meeting Trustee Jim Purtee questioned whether it was a good business decision to turn down the emergency levy dollars considering the district’s financial condition.

    “I’m not sure it’s being proper stewards of the district, to turn down a revenue stream. Balance that with the fact that if we don’t take it now, we’ll have to take it in March, one way or the other,” Purtee said.

    Board chair Hamilton reminded everyone that voters will have a say on whether to approve a tax increase to support education services in March, unlike the emergency levy they were considering Friday.

    “That’s what I was going to say. The voters did a great job on the facilities levy. I don’t think this is enough money to jeopardize, or have it become a topic of discussion between now and March, that it was another levy,” Purtee said. “I would rather just wait until March. If it was a million dollars, it might be different.”

    Trustees Ann Seddon and Terri Seymour agreed with Purtee, Hamilton and Bauman during Friday’s discussion.

    “I look at the need, but I just don’t want to jeopardize the good trust and attitude of our voters, so it’s a tough call,” Seddon said.

    Trustees have not yet formalized plans to put a supplemental levy election before voters in March. They will likely spend the next few months reviewing the district’s operating revenue and expenses, looking for ways to cut costs prior to setting a levy amount.


    IdahoReporter.com reports Tom Luna, superintendent of public instruction, has proposed a budget increase for public schools of $64 million for the next fiscal year, but there are a lot of “ifs” in it due to the trio of referendums to be decided in November, according to a story in the Idaho Statesman.

    For examples, pay for teachers would go up by 5 percent with some of that coming from merit bonuses that might not exist after the referendum vote, laptops for students would be eliminated depending on how the referendum votes go Nov. 6 and a raise for some classified staff would be dropped.

    Luna’s budget is submitted to the governor for his consideration in making a recommendation to the Legislature, but the schools chief says he recognizes the budget is tentative at this point since it could change dramatically after the November referendum votes.


    Kristen Rodine reports ninety percent of the requested $64 million boost over the current public schools budget will go to boosting salary and benefits for teachers and other school employees, state schools Superintendent Tom Luna said Thursday.

    Total teacher compensation will go up by 5 percent, he said, about the same percentage as the overall budget.

    But much of that increase would come from the state’s new pay-for-performance plan that is up for repeal on the Nov. 6 ballot, along with two other education measures championed by Luna.

    If the law goes away, so will the $61.1 million set aside in the proposed 2014 budget for merit bonuses to teachers and classified staff statewide. That’s up from $38.8 million this year, including school staff in the pay-for-performance mix and adding bonuses for teachers who take leadership roles or hard-to-fill jobs.

    In a meeting with reporters Thursday, Luna acknowledged he will need to revamp his budget if one or more of the three “Students Come First” laws fails the ballot test. In addition to pay-for-performance, $8.4 million allocated for distributing laptops to students and other smaller planned expenditures would be rendered moot.

    Other planned boosts to teacher pay will remain in the proposed budget regardless of what happens in the election. Luna proposes thawing one of the two experience steps that have been frozen in the Idaho teacher pay grid, yielding $6.2 million, and restoring a $14.8 million (1.67 percent) cut in base salaries that was part of implementing the new education laws.

    Restoring base salaries, which still would lag behind pre-recession levels, was a top priority for the Idaho Education Association, Idaho School Boards Association and other groups the superintendent met with as he shaped his budget request, Luna said.

    School Boards Association Executive Director Karen Echeverria said she was pleased to see that included in the proposed budget, as well as another top priority for school boards: increasing the amount of money boards can spend at their own discretion. Luna said his proposed budget includes a 2 percent increase in discretionary funding.

    Idaho Education Association President Penni Cyr said Thursday she hasn’t had a chance to go over the budget proposal in detail, but “I know he’s going for a 5 percent increase, and we’re pleased to see he’s interested in repairing the damage that’s been done.” through budget cuts in recent years.

    The IEA is among the most vocal opponents of the three new education laws and helped lead the push to get them on the November ballot for possible repeal.

    Luna’s total budget request seeks about $1.34 billion for Idaho public schools, up from $1.27 million in the year now under way. He also seeks a $531,100 increase in funding for Idaho Educational Services to the Deaf and the Blind, bringing that proposed budget to $7.9 million.

    The request now goes to Gov. Butch Otter, who will review department proposals before making spending recommendations to the Legislature in January. The 2014 budget, which legislators will set, takes effect July 1.

    Other items in Luna’s public schools budget for 2014:

    • $1.4 million for a program that helps students finish high school early so they can get a head start on their college credits.

    • $1 million in increased funding for school districts to beef up technical support staffs.

    • $1.1 million in increased funding for remediation, math and reading initiatives and to help districts implement the state’s new accountability system.

    Kristin Rodine: 377-6447

    Read more here: http://www.idahostatesman.com/2012/09/07/2261472/luna-seeks-5-percent-more-for.html#storylink=cpy

    Betsy Russell reports Mike Lanza, chairman of “Vote No on Propositions 1, 2, 3,” the group urging repeal of the “Students Come First” school reform laws in three ballot measures, had this response to state schools Supt. Tom Luna’s question today on how opponents of the laws would manage the “disruption” to Idaho’s public school funding that would occur if the measures are defeated in November:

    “Consistent with what we’ve said all along, we want to see control of local schools returned to local school boards and educators. So the money that has been appropriated for public schools should rightly go to public schools, but without those strings attached. Our schools need those resources. They’ve been short-changed for too many years.”

    The defeat of the three measures would leave the funds now tabbed for laptop computers, teacher merit-pay bonuses and other “Students Come First” reforms unallocated within the public school budget; if lawmakers took no further action, it would flow into Idaho’s public education stabilization fund, a state savings account for schools, at the end of the school year. But when the Legislature convenes in January, it could redirect those funds through a supplemental appropriation, rather than just let them sit all year; if it sent the money out as discretionary funds to school districts, districts would decide how to spend it. Legislative budget analyst Paul Headlee, asked about the process, said, “They could do that. They could put it into salaries. They could even take it out of the public schools budget and put it somewhere else in the state budget.”

    Said Lanza, “I do believe that the local school districts are best able to decide how to run their schools. And if the state allocated funds to them and allowed them decide how to spend it, I think they’d be a lot better off than with the handcuffs the Luna laws placed on them.”

    Luna, when he unveiled his budget request for the state’s schools for next year earlier today, said he thought schools would see a major disruption if the referenda are voted down and the reform laws overturned. “You have districts right now that are under contract to pay for technology that they will not be able to pay for,” he said. Luna said he thought opponents should have proposed alternatives or changes to the reform laws he championed, rather than attempting to repeal them at the ballot box. “They chose to go at this with a meat ax and create such a disruption to our schools,” he said.

    Lanza said, “It sounds to me like Superintendent Luna is complaining that it’s greatly inconvenient for him and his office that the people of Idaho have decided they want the final say on his laws. His problem seems to be with the democratic process. There are many of us in the state, as evidenced by how many signatures we collected in a short time, who think that Tom Luna is the one who has created this disruption in the schools and it’s already under way, and that we’re going to be better off once we repeal these laws.”


    The Idaho State Journal reports Superintendent of Public Instruction Tom Luna has requested a 5.1 percent increase in state funding for Idaho’s public school system with regards to the fiscal year of 2014.

         In a news release, it is stated that the average teacher in Idaho will see a $2,000 increase in total compensation sometime this year. Luna said he also hopes to further increase teacher pay in the fiscal year of 2014 for teachers, as well as the pay of other school district employees.

        “I am excited about this budget because it provides Idaho educators with the resources they need to continue improving education for every child across Idaho,” Luna said. “Ninety percent of the new funding requested goes toward increasing compensation and benefits for the employees who are working hard in schools across the state every day.”

         State agencies are required to submit budget proposals for the upcoming fiscal year to the governor in early September.

         Below are detailed highlights concerning Luna’s budget request for the upcoming fiscal year:

        · Continues to fully fund all components of the “Students Come First” legislation.

        · $14.8 million: Increase base salaries for Idaho teachers, administrators and classified staff by 1.67 percent, offsetting an FY2012 shift in salary-based apportionment under Idaho Code.

        · $6.2 million: Restore one year of experience that is currently frozen on the grid for Idaho teachers.

        · $22.6 million: Increase funding for statewide pay-for-performance to $61 million. This increase includes new funding to financially reward Idaho teachers for taking on leadership duties and working in hard-to-fill positions. It also includes funding to ensure school-based classified staff, such as paraprofessionals, can participate in school-wide student achievement bonuses in the future.

        · $8.4 million: Increase to deploy 1:1 laptop devices to high school students in the first one-third of high schools selected statewide. High school teachers and principals statewide will receive 1:1 devices this fall.

        · $1 million: Increase the line item dedicated to District IT staff support at the local level.

        ·$1.1 million: Increase the line item dedicated to Remediation, Math Initiative and the Reading Initiative to assist local school districts in implementing the new Common Core State Standards in mathematics and English language arts and the state’s new accountability system, known as the Five-Star Rating System.

         The budget request reflects recommendations Superintendent Luna received in August from representatives of the Idaho School Boards Association, Idaho Association of School Administrators, Idaho Education Association, Idaho Association of School Business officials and other stakeholder groups.

         The school system budget request now heads to the governor’s office for consideration.

        The governor will present his budget request to the Idaho Legislature in January of 2013. Members of the legislature will set the budget for the fiscal year 2014 within the same time frame.

        The fiscal year of 2014 begins on July 1, 2013.


    Emilie Ritter Saunders reports Idaho has cut per-student education spending by 19 percent in the last five years.  That’s according to a report published this week by the Center on Budget Policy and Priorities.

    Idaho schools have seen the fourth-largest cut among states since 2008, ranking behind Arizona, Alabama and Oklahoma.

    The report points out education funding cuts have slowed since the peak of the Great Recession. Only 13 states have increased per-student spending since 2008.

    CBPP says the effects of spending cuts on local communities will be wide reaching, and in some cases will “slow the pace of recovery.”

    Here’s more from the report:

    “Federal employment data show that school districts began reducing the overall number of teachers and other employees in July 2008, when the first round of budget cuts began taking effect. Since then, schools have been shedding jobs steadily; nationwide, schools have cut jobs in 10 of the last 12 months.  As of July 2012, local school districts had cut 328,000 jobs nationally compared with 2008. These job losses have reduced the purchasing power of workers’ families, in turn reducing overall consumption in the economy and thus extending the recession and slowing the pace of recovery.” — CBPP

    These cuts have left many districts struggling to keep up.  After the Council School District lost its shop program, locals donated time, goods and services to start it up again.  Rockland residents have pitched in to paint and repair school buildings.

    “Many states and school districts have undertaken important school reform initiatives to prepare children better for the future, but deep funding cuts hamper their ability to implement many of these reforms, particularly in areas like lengthening the school day and expanding early childhood education. At a time when the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, large cuts in funding for basic education threaten to undermine a crucial building block for future prosperity.” — CBPP

    Idaho’s schools chief Tom Luna has said per-student funding isn’t the only measure of success.  In an interview in June, Luna said spending “is a factor, but not the most important factor.”

    Today, Luna says Idaho made some difficult budget choices during the recession that have put the state in a better spot moving forward.  “Idaho, for a second year in a row, is going to see a considerable increase in the funding going to schools.  Many of the states that didn’t make those very difficult decisions early on are going to continue to cut year after year after year.”

    Idaho did increase its state share of education spending during the current fiscal year, but overall school funding, which includes federal dollars, declined .07 percent, from FY 2012 to FY 2013 according to the CPBB’s report.

    Luna today released his budget request for the coming fiscal year.  He’s asking lawmakers for a more than 5 percent increase in state spending on education.


    Betsy Russell reports Idaho state schools Superintendent Tom Luna released his budget request today for the state’s schools for next year, calling for a 5.1 percent, $64 million increase in state funding. Luna said he met with stakeholder groups over the summer, including the Idaho School Boards Association, Idaho Association of School Administrators, Idaho Education Association, Idaho Association of School Business Officials and others, to formulate the request; it reflects some of those groups’ common priorities, he said, including “backfilling” the 1.67 percent cut in salary funds for teachers and administrators that was imposed in 2011 under the “Students Come First” school reform laws. Restoring that funding next year would mean a $14.8 million increase in base salaries for Idaho teachers, administrators and classified staff from this year’s level, Luna said; those base salaries still would remain below 2009 levels, however.

    Luna emphasized that the budget proposal fully funds all the reform programs under “Students Come First,” including a $61 million teacher merit-pay bonus program, up from $38.8 million this year, and phasing in laptop computers for all high school students. Under the plan, teachers are to get the computers this fall; the first third of Idaho high school students would get them in the fall of 2013.

    The budget request also calls for “unfreezing” one of two years on the state’s teacher salary pay grid to provide scheduled increases for teachers who have additional years of experience; that change would cost $6.2 million. Luna said he hopes to remove the other frozen experience step on the grid the following year. He’s also proposing a 2 percent increase in discretionary funds to school districts; and small increases in the current level of funding for information technology staff at school districts and for remediation for students falling behind.

    Luna held a roundtable meeting with reporters to release the budget request, which now goes to Gov. Butch Otter. But he said it would all change if voters in November reject the “Students Come First” laws by passing three referenda, Propositions 1, 2 and 3. If the measures fail, he said, “Until the Legislature comes to town, we’d have no legal authority to distribute those funds.”

    Luna hasn’t formulated an alternate plan on how to proceed if the reforms are overturned, which would redirect the money for merit-pay bonuses, laptops and other “Students Come First” programs; that money still could only be spent on education. Luna suggested asking opponents of the reform laws, who collected more than 70,000 signatures to place the three measures on the ballot. “I’m very curious as to what their plan is for managing this disruption,” he said. “We’ve made it very clear in the past that you cannot cut school budgets in the middle of the school year, and that’s what this amounts to.” You can see Luna’s full budget request here; click below to read his news release.



    Idaho State Department of Education






    BOISE – Superintendent of Public Instruction Tom Luna has requested a 5.1 percent increase in state funding for Idaho’s public schools for the 2013-14 school year, the state’s fiscal year 2014.

    I am excited about this budget because it provides Idaho educators with the resources they need to continue improving education for every child across Idaho,” Superintendent Luna said. “Ninety percent of the new funding requested today goes toward increasing compensation and benefits for the employees who are working hard in schools across the state every day.”

    The average teacher in Idaho will see a $2,000 increase in total compensation in the current year. Superintendent Luna hopes to increase that further in fiscal year 2014 for teachers as well as other school employees.

    State agencies are required to submit budget proposals for the upcoming fiscal year to the Governor in early September.

    Here are the highlights of Superintendent Luna’s request for a 5.1 percent increase in state funding for Idaho’s public schools next fiscal year:

    • Continues to fully fund all components of Students Come First.

    • $14.8 million: Increase base salaries for Idaho teachers, administrators and classified staff by 1.67 percent, offsetting an FY2012 shift in salary-based apportionment under Idaho Code.

    • $6.2 million: Restore one year of experience that is currently frozen on the grid for Idaho teachers.

    • $22.6 million: Increase funding for statewide pay-for-performance to $61 million. This increase includes new funding to financially reward Idaho teachers for taking on leadership duties and working in hard-to-fill positions. It also includes funding to ensure school-based classified staff, such as paraprofessionals, can participate in schoolwide student achievement bonuses in the future.

    • $8.4 million: Increase to deploy 1:1 laptop devices to high school students in the first one-third of high schools selected statewide. High school teachers and principals statewide will receive 1:1 devices this fall.

    • $1 million: Increase the line item dedicated to District IT staff support at the local level.

    • $1.1 million: Increase the line item dedicated to Remediation, Math Initiative and the Reading Initiative to assist local school districts in implementing the new Common Core State Standards in mathematics and English language arts and the state’s new accountability system, known as the Five-Star Rating System.

    The budget request reflects recommendations Superintendent Luna received from representatives of the Idaho School Boards Association, Idaho Association of School Administrators, Idaho Education Association, Idaho Association of School Business Officials and other stakeholder groups in August.

    This budget request will now go to the Governor’s office for consideration. The Governor will present his budget request to the Idaho Legislature in January. The Legislature will set the budget for fiscal year 2014 early next year. Fiscal year 2014 begins July 1, 2013.


    # # # # #


    Alecia Warren reports local legislators are divided on whether to do away with a business tax that companies say is burdensome, but county officials call an important revenue source.

    The state Senate Pro Tempore Brent Hill distributed a letter to Idaho counties late last month, announcing the state Legislature is considering eliminating the personal property tax for businesses.

    Unlike a similar bill from 2008, the letter reads, “the state would not reimburse the counties for the revenues lost as a result of eliminating the personal property tax.”

    The letter requested counties to comment on how it would affect them.

    The answer, according to Kootenai County officials, is badly.

    County Commissioner Jai Nelson said the tax is a large funding source for many taxing authorities.

    According to county property tax totals, the tax provided $1.2 million for the county in 2010, and $4.6 million for all taxing districts in the county.

    “I support the elimination of this, I think this is over burdensome on business,” Nelson said, adding that maybe raising other taxes could substitute the revenue. “The issue is, what are the consequences of phasing this out? How do we do it?”

    Commissioner Dan Green affirmed that the personal property tax is an important revenue stream for counties.

    “We’d have to look at serious reductions of services potentially across the board,” he said of if the tax was eliminated with no replacement funds.

    Sen. John Goedde, R-Coeur d’Alene, said the tax elimination has been batted around the Legislature for the past several years.

    “It sounds to me like if the pro temp is trying to gather some information, that would lead me to believe there must be some push to reconsider it again,” Goedde said.

    He has heard arguments that by lowering taxes for businesses, Idaho will become more competitive and attract more companies, he said.

    “There’s a school of thought that will tell you that by making the state more competitive, we will gain businesses and that will increase our revenues,” he said.

    But he worries if that doesn’t happen, the state will simply have to reinstate the tax, he said.

    “I think before we do anything along those lines, we’re going to have to have our ducks in a row,” Goedde said.

    Coeur d’Alene Rep. Bob Nonini, also running for state Senate, said he would support scrapping the tax.

    Businesses have urged the Legislature to do so because of the arduous processes of calculating personal property, he said.

    “We’re told it costs more for CPAs to prepare the tax statement than the actual tax bill itself, because it’s such a small amount,” Nonini said. “It burdens them, and it’s cumbersome to business.”

    Ron Nilson, president and CEO of Ground Force Manufacturing, said there are few businesses in Idaho that wouldn’t like to see the tax disappear.

    “The average day citizen has no idea the amount of time and energy it takes to account for your personal property tax,” he said of submitting a full schedule with assessed value. “The amount of money we pay is almost the amount of time we spend collecting information.”

    Ground Force spends about 12 to 15 hours on the tax report, he said. The company pays between $10,000 to $15,000 for the tax a year.

    He likened the tax to penalizing businesses for purchasing equipment, which makes it harder for Idaho to compete with other states in attracting businesses.

    “The amount of time you spend pulling it together … Time is money for a business,” he said.

    Nonini said counties could possibly make up for the lost funds by pursuing revenue sharing with cities with sales tax.

    “It’s just going to take all of us working together to find the right solution,” he said.


    D.F. Oliveria reports Idaho has cut per-student education spending by 19 percent in the last five years.  That’s according to a report published this week by the Center on Budget Policy and Priorities. Idaho schools have seen the fourth-largest cut among states since 2008, ranking behind Arizona, Alabama and Oklahoma. The report points out education funding cuts have slowed since the peak of the Great Recession. Only 13 states have increased per-student spending since 2008. CBPP says the effects of spending cuts on local communities will be wide reaching, and in some cases will “slow the pace of recovery”/Emilie Ritter Saunders, StateImpact. More here.

    Question: Anyone want to give a shoutout to Otter administration, Superintendent Luna and legislative Education Committee chairs from Kootenai County, Bob Nonini & John Goedde after seeing this post?


    Jessie Bonner reports as Idaho voters decide on a sweeping education overhaul this November, teachers opposing the reforms may find themselves in a bind at the ballot box: By rejecting the changes, they could also be turning down a performance bonus after years of reduced or stagnant salaries.

    Idaho introduced merit pay under the reforms approved in 2011 and teachers worked toward those financial incentives last year. But the bonuses won’t be paid out until Nov. 15, nine days after the referendum, and state officials say they can’t distribute the money if the laws are repealed.

    The timeline is prompting outcry from the state’s teachers union, which is fighting to overturn the reforms authored by Idaho schools Superintendent Tom Luna.

    “The state Department (of Education) is holding this money hostage,” said Idaho Education Association President Penni Cyr. “The teachers earned it, the legislature appropriated it last year, and they intended it to be used for teacher compensation.”

    Luna’s office counters that the bonus payout plan follows the law and the only barrier to handing out the money would be the referendum spearheaded by the union.

    “It’s not fair for them to say we’re holding them hostage, they’re the ones that put the referendum on the ballot, which is the only reason why these bonuses couldn’t be paid,” Luna spokeswoman Melissa McGrath said. “We did not ask for there to be a referendum.”

    If the laws are voted down, McGrath said, the state won’t have the legal authority to distribute the funding.

    Idaho has long debated whether teacher pay should be tied to things like student test scores.

    Sonia Galaviz, a Boise elementary teacher opposing the reforms, said she hasn’t yet learned if she earned a merit bonus while working in the Nampa district last year. She’s more concerned about the future of public education in Idaho, not the pay-for-performance money, she said.

    “Truthfully, that’s the last thing on my mind,” said Galaviz, whose salary has been frozen for three years. “I don’t care about the bonus.”

    She’d rather the merit pay money go toward increasing all educator salaries, she said, not just those who meet pay-for-performance goals. With merit pay, however, Luna made the case for paying teachers differently, arguing the old system was unfair and compensated good teachers the same as the bad.

    Luna’s department contends not every teacher will be faced with the dilemma of wanting to oppose merit pay with a salary boost at stake.

    “I don’t think it’s fair to say a majority of teachers are going to go the ballot box and have this dilemma,” McGrath said. “I think some teachers might, but there are a lot of teachers who support pay-for-performance.”

    The bonuses are being jeopardized following three years of recession-driven pay cuts and salary freezes. Idaho is also shifting $14.7 million from salaries to fund parts of Luna’s reforms that pay for high school students to earn college credit and boost minimum teacher pay while restoring raises for those who further their education.

    Lawmakers passed legislation in 2012 to avoid future salary shifts, and found $38.7 million in new revenue for merit pay, under the increased public schools budget for this year.

    Luna’s department insists its hands are tied when it comes to the timing of the bonus payout because the law says school districts were to receive the money as part of their third funding installment for the year. Districts receive that third piece of funding Nov. 15.

    He couldn’t have known the money budgeted for bonuses would be subject to voter approval days before it was scheduled to go out, McGrath said.

    “They won’t let a thinly veiled attempt to bully them into voting for these laws keep them from doing what’s right,” Cyr said.


    George Prentice reports officials in north-central Idaho, facing a nearly $500,000 deficit at a Lewiston juvenile detention center, are mulling the possibility of sending their juvenile offenders across the border to be housed in a Spokane-area facility.

    This morning’s Lewiston Tribune reports that Nez Perce County commissioners have been presented an offer from operators in Washington’s Martin Hall that would cost $301,000 vs. the current $1 million budget for the Region Two Juvenile Detention Center in Lewiston. The Lewiston location houses juvenile offenders from Clearwater, Idaho, Latah, Lewis and Nez Perce counties.

    But county officials are also concerned about keeping the juveniles closer to home. Commissioners are also considering a proposed rate hike to the surrounding counties to keep the Lewiston facility open.


    Randy King reports Ross Thompson looked like a guy who was there for a reason, his big flat hat immediately giving away the fact that he was from Owyhee County. He marched over to Idaho Department of Fish and Game Director Virgil Moore and asked why the hell he was wasting his time. The Idaho Wildlife Summit had definitely attracted a few with a bit of ire.

    Up to that point, the summit, which ran Aug. 24-26, had been a showcase of speeches on conservation and ethics. A lot of “we need to work together on our problems” but not a lot of problem solving.

    What is the problem? In a word: money. The department is funded in large part by “consumptive users” of wildlife: hunters, fishermen and other outdoor enthusiasts–57 percent of Fish and Game’s budget comes from resident and nonresident tag sales, as well as taxes on sporting goods. The remaining amounts are mostly from land leases to companies like Idaho Power.

    In a recent statewide poll conducted for the department, 93 percent of Idahoans said they value the right to hunt. But only 11 percent of the citizens hold hunting licenses, year to year. How to hold up nearly universal support with only one-tenth participation is a major issue.

    The problem gets worse because almost all Idahoans expect the “second paycheck” of seeing wildlife in our state. Few can imagine driving through the backwoods and not seeing a deer. But only a few who are not consumptive users contribute to the department’s budget.

    Currently, the only way the department raises money outside of its normal channels is through license plates and the Blue Bird Box on Idaho tax returns. The BBB is an elective checkbox that allows Idahoans to donate money from their state tax returns. In 2011, the Blue Bird Box raised $33,000. In comparison, the 2013 departmental budget is $92 million.

    This is the dilemma facing the department: How does it balance the demands of an increasingly urban and growing population while relying on a static, if not shrinking, customer base?

    Cue the Idaho Wildlife Summit.

    No silver bullet was presented at the summit–no grand new idea to save all wildlife while keeping conservationists, hunters and fishermen happy.

    What Idaho can do is promote itself as a hunting destination to out-of-state hunters.

    “We have seen a direct increase in license sales when we have used forms of online marketing. … It is a whole new direction for us,” Moore said.

    “We see a direct correlation with marketing money and nonresident tag sales,” he said. “Remember, one out-of-state tag is worth, fiscally, about 10 to 12 in-state tags.”

    A resident Idaho elk tag costs about $31, while it costs an out-of-state hunter $416.

    The department relies more on nonresident hunters for money than its own population base–19 percent of revenue is from in-state hunters while 22 percent is from out-of-state hunters. The more hunters and anglers from outside Idaho, the more wildlife Idahoans can enjoy.

    Times are tough at Fish and Game. In each of the past four years, the department has seen a decrease in the total sales volume of out-of-state deer and elk tags. From an all-time high in 2006 of about 13,000 tags sold to just less than 8,000 in 2011, the department has lost about 40 percent of that revenue.

    “We got used to selling out all of our nonresident tags, but that model has clearly changed, and we need to adapt to it,” said Moore. “Idaho used to have units that would sell out on quota tags within the first few days. Now we have leftover tags for those units.”

    According to Moore, three things happened at the same time that have drastically affected nonresident revenue. First, wolves had a marked impact on the elk herds. A reduction in numbers means a reduction in hunt quality and thus fewer tags are bought. Second, the economic tumult. Third was Fish and Game’s decision to raise prices for nonresidents by about 20 percent. That combination wreaked havoc on the department’s budget.

    “The main reason that we can absorb any of this loss to revenue is on the backs of our employees,” Moore said. “We have a statewide wage freeze in effect.”

    One option for fixing the department’s woes presented at the summit was for closer collaboration with nongovernmental agencies, like theNature Conservancy.

    Hunters and anglers shift in their seats at the idea of a conservation group partnership.

    Toni Hardesty, executive director of the Nature Conservancy in Idaho, was quick to address the crowd’s concerns. She explained that 70 percent of Nature Conservancy staff in Idaho either hunts or fishes. She also addressed the misconception that conservation means lack of access.

    In her speech, she opened with a story about why her grandparents never went fishing together. One fished for trout, the other fished for catfish. Thus, they could not fish together.

    Her point was that the type of fish sought is clearly an inconsequential divide but one that kept both sides apart while fishing. She used this as an analogy for sportsmen and nature conservancy folks.

    For the most part, sportsmen and conservationists have more common ground than either care to admit. Both want to protect habitat and see animals flourish into the future. Both also want to see a sustainable Idaho Fish and Game, and both realize that the current consumptive-use model is unsustainable.

    During a break, Thompson and I ran into each other in the restroom at the Riverside Hotel. We had just sat through an impassioned speech by renowned Canadian conservationist and hunter Shane Mahoney. According to him, Teddy Roosevelt was the last great genius in America.

    Thompson looked at me and said, “Now that we are done with our history lesson, do you think that we can get onto solving some of the problems?”

    For me, it was one of those times in life that I wished I could find the profound words at the right moment. Instead, I just shrugged and said, “hope so.”

    But the best part about reflection is having the time for a witty comeback. What I would have liked to have said was, “If we forget our history, we are bound to repeat it. I do not want to see any more animals go the way of the buffalo.”


    Brian Walker reports voters in the Lakeland and Kootenai school districts on Tuesday night approved measures that fund facility improvements.

    Lakeland voters approved a plant facility levy of $800,000 per year for five years that will fund building repairs, energy efficiency improvements, equipment, buses and classroom furniture.

    The voting included 1,174 for the proposal – for 60.52 percent approval – and 766 against the levy. Fifty-five percent approval was needed for the levy to pass.

    Kootenai voters passed a $2 million bond levy for a wastewater treatment project.

    Those in favor of the bond were 251 (76.06 percent) and 79 were against. A vote of 66 and two-thirds percent approval was needed for the bond to pass.

    Lakeland voters in March turned down a plant facility levy of $905,000 per year for 10 years. The proposal obtained 53 percent approval. While at the polls, voters approved a supplemental levy by about the same margin.

    Tom Taggart, Lakeland’s finance director, said he believes that having one question on the ballot made a difference with voters.

    “We felt that having this on the ballot by itself allowed us to focus on this and explain it better,” Taggart said. “We were able to answer some questions better.”

    Taggart said the district would have had to dip into the General Fund if the levy hadn’t passed.

    “This is a big relief,” he said. “This will allow us to go into the year feeling pretty good and plan.”

    Even with the levy, the overall amount of property tax levied by Lakeland will decrease 11 percent next year due to other levies being reduced or eliminated.

    If the measure had failed, taxes on a $175,000 home after the homeowner’s exemption would have been reduced an additional $37 per year.

    With the Kootenai measure, Idaho Department of Environmental Quality mandated that the district make system improvements because the current lagoon lacks a liner to prevent seepage.

    With the bond, the district will buy land for a new lagoon and meet land application requirements for treated effluent.

    “We would like to thank our community for their strong support in the bond levy election and their willingness to maintain the financial support of the school, especially in these difficult economic times,” Kootenai Superintendent Lynette Ferguson said. “Passage of this bond allows the district to fulfill the requirements of the Department of Environmental Quality wastewater compliance agreement enabling the districts continued operation.”

    In the spring of 2008 and 2011, the lagoon was overtopping and had to be pumped to prevent overspill.

    Even with the levy, taxes in the district will slightly decrease due to the Kootenai High School bond that is expiring this year.

    To pay for the bond, the owner of a $100,000 home, less the homeowners exemption, will pay about $22.50 per year for 10 years. The owner of a $200,000 home will pay an estimated $52.21 per year.

    The lagoon the district currently uses was constructed in 1977. The storage capacity is undersized for the permitted facility and the chlorine system does not consistently meet disinfection requirements, according to the district.

    Neither of the school district measures can be used for salaries or operating expenses.

    Idaho is one of the few states that does give funding support for building schools and renovations. School districts are expected to finance such projects with general obligation bonds or plant facility levies authorized by local voters.


    Adam Cotterell reports voters in several school districts in southwest Idaho go to the polls Tuesday. The Kuna School district will ask voters to approve nearly $3.2 million a year for the next two years. That money would be used to hire more teachers, reduce fees, plus maintenance and operations expenses. It could also mean the difference between offering drivers education or not.


    The Nampa School District is larger than Kuna but its request is smaller at, $1.6 million for two years. But it’s getting more attention. That’s because of the recent news that an accounting error means the district is going into the year nearly three million dollars short.  Nampa unsuccessfully asked voters for a much larger amount earlier this year.


    West of Nampa the Wilder school district will ask for a two year levy of $310,000 a year. That would go for general maintenance and operation. Two other Canyon County districts are asking for longer term levies.


    Notus and Homedale’s could last up to ten years each. Notus wants an estimated $150,000 a year to renew an existing levy for building upkeep. Homedale wants up to $185,000 a year to maintain membership in an organization that allows small districts in the area to jointly provide classes they couldn’t afford on their own.


    To the east the Buhl School District in Twin Falls and Gooding Counties wants $400,000 a year for the next two years. That’s for general maintenance and operation. 


    Kendra Evensen reports three school elections held in east Idaho on Tuesday had varied results.

    Voters overwhelmingly approved American Falls Joint School District’s request for a $1,798,108 supplemental levy, but they narrowly denied North Gem School District’s request for a $5 million bond and voted against recalling a Blackfoot School District trustee..

    Here’s a closer look at the election results:

    Blackfoot School District

    In Blackfoot, 180 people voted to keep School District Trustee Peter Lipovac in office, while only 101 voted to kick him out.

    Lipovac, who will retain his position as the Zone One Trustee, said he felt vindicated by the results of the recall that impugned his integrity.

    “I would like to thank all of my constituents both on and off the (Fort Hall Indian) reservation,” he said, adding that he’s particularly grateful to members of the Shoshone-Bannock Tribes who have spoken on his behalf in recent months.

    They also rallied behind him in the election; the Fort Hall precinct was responsible for 135 of the votes that kept him in office.

    Those behind the recall wanted Lipovac ousted for allegedly violating board policy by not getting pre-approval to attend a National Indian Education Conference in New Mexico, for which he was later reimbursed $1,075.

    But Lipovac has contended that School Board Chairman Scott Reese knew about the trip in advance, as did administrators and other members of the school board, who unanimously approved the reimbursement. And he said the board policy that petitioners referred to doesn’t even apply to school board members.

    Those behind the recall also accused Lipovac of advocating for the proposed Chief Tahgee Elementary Academy, a charter school that would emphasis Indian culture and native language.

    They said he was actively involved in the development of the charter school and should have recused himself from the January vote, in which board members decided to send the charter school’s application to the state for review.

    But Lipovac said that his involvement with the proposed school was based on written guidance from Michelle Clement Taylor, school choice coordinator for the Idaho State Department of Education in Boise. She encourages school board members to get involved in the planning, development and oversight of charter schools, he said, adding that he didn’t do anything wrong.

    “I didn’t expect to be penalized for carrying out the role of a board member as recommended by the charter commission in Idaho,” he said.

    Lipovac feels the recall was a “distraction that served nobody well” and forced him to spend time defending his legitimate actions rather than focusing on his responsibilities as a school board member. And he’s glad to be moving on.

    “The board has articulated some very good goals for the district this year, and I am looking forward to improving education and meeting those goals,” he said.

    North Gem School District

    North Gem School District’s request for a $5 million bond failed by just two votes on Tuesday, said Denise Horsely, Caribou County’s election officer.

    Although 216 people voted for the bond and only 111 voted against it, Horsely said the request fell just shy of the two-thirds majority required.

    “There had to be 218 ‘yes’’,” she said.

    District officials requested the bond in order to replace the century-old portion of the district’s lone school for students in kindergarten through 12th grade. That part of the building houses 85 percent of the student body, Superintendent Jamie Holyoak said this week, adding that there are some vertical cracks in the walls and other issues that show the foundation is weakening.

    Although the building isn’t in dire condition yet, officials decided to ask for the bond so they could take care of the problem before it gets worse, and take advantage of low construction costs at the same time.

    School Board Chairman Carl Hatch said officials went to the public to find out what the voters wanted, and the election results showed that.

    “We want to do what the patrons want us to do,” he said, adding that they’ll now decide where to go from here.

    Hatch said he was grateful for those who participated in the election on Tuesday.

    “We appreciate people getting out and voting. It gives us an idea of where we need to go from here,” he said.

    American Falls Joint School District

    Voters in Power and Cassia counties overwhelmingly approved American Falls Joint School District’s request to renew a $1,798,108 supplemental levy for two years on Tuesday.

    Of the votes cast, 319 were in favor of the levy while only 53 were against it.

    Although efforts to reach officials failed on Tuesday, Superintendent Ron Bolinger said earlier this week that the levy plays a crucial role in the district, making up 19.3 percent of the budget.

    The district, which has lost $1.6 million in state funding over the past four years, uses the supplemental money to help with book, technology, library and school supply costs, as well as salaries for teachers and support personnel.


    Natalie Podgorski reports school districts across southern Idaho are asking voters to help boost their budgets. School levy elections are Tuesday and some districts say there could be big consequences if the levies don’t pass.

    The Kuna School District is asking for a $6.38 million levy over the next two years, the largest amount this election. 

    “The primary focus of that is to pay for our teachers,” said Wendy Johnson, Kuna’s assistant superintendent.

    The district says it has already made all the cuts it can.

    “We don’t have anything left that would allow, that wouldn’t impact student safety,” said Johnson. 

    If the levy doesn’t pass Johnson says 25 teachers will have to be let go, class sizes will go up and some extra curricular activities will be cut.

    Some voters are against raising their taxes but other say they will vote “yes” to support their kids. 

    “Kids can’t learn in an environment where there is too many kids, where all the teacher has to worry about is crowd control,” said Joy Garrison, a parent with several kids in the Kuna School District.

    In Nampa, the district wants $3.2 million over the next two years. 

    “We have 2.25 million square feet of school space and the budget has been cut 60 percent over the last three or four years, and so it is really critical that we start getting some maintenance where it needs to be,” said Lynn Borud, chair of the Citizens Levy Committee. 

    Here is a breakdown of all seven school levies:

    Kuna wants $3,190,000 per year for two years for a total of $6,380,000. The levy would cost $368 for every $100,000 worth of assessed value.

    Nampa wants to renew a two-year, $1.6 million per year supplemental levy. Because it is a renewal, it will not increase property taxes. The money would go toward supplies, textbooks, technology and repairs.

    Notus is asking voters to renew its current levies. There will be no tax increase associated with the levies. The first levy will go toward paying Notus’ share of the Canyon Owyhee School Services Agency or COSSA. The agency is a partnership between Homedale, Marsing, Parma, Notus and and Wilder to provide special education, gifted and talented programs as well as professional-technical classes. Notus contributes $180,000. The second levy will be up to $150,000 for plants and facilities.

    Buhl is asking for $400,000 each year for the next two years. This will cause property taxes to increase $41.20 for every $100,000 in taxable value. The district says positions will have to be cut is the levy does not pass.

    Wilder wants a two-year levy that would raise $310,000 each year. This will cause a property tax increase. This is the first time the district is asking for a two-year levy. If it doesn’t pass the district will have to shorten the school calender by 10 days and cut or eliminate extracurricular activities. The district has already cut its art and music programs.

    Homedale wants to renew its existing 10-year COSSA operations levy. The levy cannot legally exceed 0.1 percent of a homeowner’s assessed taxable value.

    The Bruneau-Grand View School District is requesting $700,000 per year for two years. This would increase property values $3.96 for every $10,000 of taxable value. If the levy does not pass, students will have to pay to play any sports, the music program will be cut district wide, and the business computers and family and consumer science class will be cut. 


    Kristin Rodine reports the slogans are snappy, simple and grouped in threes.

    “Electorate demands it. Economy requires it. Students deserve it.”

    “Bad for children. Bad for teachers. Bad for Idaho.”

    Those who embrace the first set of sentiments support the Students Come First laws spearheaded by schools Superintendent Tom Luna and passed by the Legislature in 2011.

    Those whose opinion of the new education laws might be capsulized as “Bad, bad, bad” aim to repeal all three and successfully gathered about 75,000 signatures to put the issues on the Nov. 6 statewide ballot. Prevailing “no” votes would kill the laws; “yes” votes would keep them in place.

    Advocates for both sides are passionate, organized and determined to bring in money and supporters to ensure the electoral outcome they desire. At stake, both sides say, is Idaho students’ ability to learn and succeed up to their potential.

    The “yes” and “no” campaigns won’t have to file pre-election finance statements until early October, and both declined to reveal donations so far. But managers on each side say they expect to bring in $1 million or more, with much of it coming from national organizations.

    Radio advertisements already are plying the airwaves, with television spots anticipated as more money rolls in. Last week the “Vote No Props 1, 2, 3” campaign posted ad videos on YouTube.

    The campaign against what opponents call the “Luna laws” is mining social media to great effect, “Vote No” communications coordinator Morgan Hill said.

    “We’re getting thousands of people plugging into Facebook and Twitter, plugging into us online,” Hill said. “We’re getting quite a few people who are donating.”

    By Friday evening, the “Vote No” campaign had more than 4,000 Facebook followers. “Yes for Idaho Education” had 46.

    “We haven’t really been focused on (social media) yet,” said “Yes” campaign manager Ken Burgess. “We’ll be ramping it up shortly.”

    Burgess cited “a grass-roots support system across the state” and noted a direct-mail campaign with fund-raising pleas signed by Gov. Butch Otter and Idaho Republican Party Chairman Barry Peterson that went to more than 6,000 individuals and businesses this month.

    “We need your help to keep our bold and innovative reforms on track for our children’s future,” the letter says, seeking donations of $25 to $250 or more.


    The Students Come First laws stripped many of Idaho teachers’ collective bargaining rights, established a pay-for-performance bonus system for teachers and imposed “21st century technology” measures to phase in laptop computers for all high school students and require future graduates to earn at least two course credits online.

    Both sides make the technology piece central to their arguments — but from opposite perspectives.

    Wendy Horman of Idaho Falls, a longtime school board member who co-chairs the “Yes” campaign, said the technology bill addresses the need to get all Idaho students, regardless of where they live or what their parents can afford, adept with technology that is prevalent in higher education and the workforce.

    To the Idaho Education Association and Idaho Parents and Teachers Together, which led the effort to get the repeals on the ballot, the laptop push is a wrong-headed effort to funnel money into devices when those funds would be better spent on making sure there are enough teachers and workable class sizes to give students the help they need.

    “We do not believe the best way to try to teach kids is to replace a teacher with a computer and a requirement,” said Mike Lanza, a Boise father of two who chairs the “No” campaign and co-founded Idaho Parents and Teachers Together.

    “Where there’s a skill gap is in the intangibles … the ability to think things through and problem solving,” said outgoing District 19 Rep. Brian Cronin, D-Boise, who “vehemently” opposed the Students Come First package in the Legislature. “Those are things that can’t be taught by a laptop.”

    “Kids today don’t really struggle with technology,” Cronin added.

    “There’s a huge equity piece in this for me,” countered Horman, a mother of five and former president of the Idaho School Boards Association. “You and I both know that the kids who can afford the technology already have it in their pocket.”


    The statewide teachers’ union, Idaho Education Association, has staunchly opposed the new laws since Luna proposed them early in the 2011 legislative session. The State Board of Education reiterated its support for the laws this month.

    But besides those two groups — and the organizations formed specifically to work for and against the ballot measures — Idaho education and business groups have yet to publicly pick a side. Campaign insiders on both sides said they don’t expect that to change.

    Cronin said “a lot of business people” are supporting the “No” campaign, but “they don’t necessarily want to put their business name on the line.”

    And “Yes” advocate Burgess said he believes numerous teachers support the new laws, “but they’re afraid to say anything publicly.”

    Idaho first lady Lori Otter says she knows at least one local teacher who wanted to back the “Yes” campaign and suspects there are many more.

    Otter, who spent 12 years as a teacher and coach in Idaho schools before she married the governor six years ago, said she never joined a union while she was teaching, “but I felt pressure every year.”

    An avid spokeswoman for keeping the Students Come First laws, Otter said her support comes from her love for her profession, not loyalty to the administration.

    “Some people think the only reason I’m for this is for my husband and Luna, but if you know me at all you know that’s not how I operate,” she said. “I think in the long run it’s protecting the profession.

    “Right now teachers kind of feel that they’ve been beat up on,” she said, but “I think once teachers understand a good change can help them work smarter, not harder, they’ll come around.”

    IEA President Penni Cyr called allegations of union pressure on teachers “almost hilarious. We don’t do that.” She said the union does invite every teacher to join every year, “but it’s an invitation. This is a Right to Work state.”

    Cyr said teachers overwhelmingly oppose the trio of laws but “are making the best of it.” “They go in there and they make it good for the kids. That’s what they do. But they’re committed to voting no on these laws.”


    Spending the past year under the new laws reinforced teachers’ opposition, Cyr said. Class sizes have gone up in many districts, teachers and parents are forced to pay for school supplies districts can’t afford to provide, and an unprecedented 1,300 teachers left the state last year, she said.

    Budget cuts that affect teachers’ jobs are local school board decisions born of the economic downturn, not Students Come First, State Department of Education spokeswoman Melissa McGrath said.

    “State revenues have declined, and therefore the state had to send less funding to public schools than in years past,” she said.

    Luna and other proponents say the laws are good for teachers because they allow for merit pay and provide technology that can make teachers’ jobs easier and more effective.

    Nearly $39 million has been set aside to reward teachers this fall for their work last year. The State Department of Education estimates 85 percent of all Idaho teachers will receive some type of bonus, with an average amount of $2,000.

    “Bonuses for teachers is money that was originally appropriated for salaries,” Cyr said. “If you’re talking about reducing salaries to give bonuses, that’s kind of interesting.”

    The state shifted about $14 million from school salary funding in fiscal 2012 to pay for some of the initial reforms, McGrath said, but legislation passed earlier this year makes sure no further such shifts will be made.

    Cyr noted that distribution of bonus money to reward teachers for last year’s success is not scheduled until mid-November — after the election. If Proposition 2, which deals with pay for performance, is defeated, that money would go elsewhere.

    All three laws are fully funded for this budget year, McGrath said. If they are repealed, the state would not have legal authority to distribute any of that money as designated by defunct laws.

    “This funding would go into the Public Education Stabilization Fund until the Idaho Legislature could address it in January 2013,” she said.


    One controversial aspect of the new education laws eliminates multi-year teacher contracts and limits collective bargaining to issues of salary and benefits.

    “This returns control to locally elected school boards that were elected to make decisions but were often bound by agreements made by board members 20 years ago,” Horman said.

    But Cronin said the changes to collective bargaining rights hurt students by “silencing teachers.”

    “People in Idaho know teachers in many respects are children’s best advocates,” he said. “When we take away their voices on such issues as classroom size and scheduling, that is not good for students.”

    Bonneville School Board member Horman said teachers can still talk to district leaders “as colleagues,” which can more effectively communicate viewpoints than talks at the bargaining table.

    Cronin said Students Come First erodes local control by forcing “one-size-fits-all” measures, such as laptops and online course requirements, on all districts rather than leaving it up to individual school boards.

    He and Cyr said they’re all for pursuing improvements to Idaho’s school system, but they want to get rid of this package of laws and start from scratch. They say a more collaborative approach is needed that brings in teachers, parents and others to identify the objectives as well as the solutions.

    “I think we haven’t really identified what problem or problems we’re trying to solve,” Cronin said. “Instead, we’ve developed a fiscal crisis plan under the assumption that there’s no will in this state to make the necessary investment in education.”

    Kristin Rodine: 377-6447

    Read more here: http://www.idahostatesman.com/2012/08/26/2244876/school-laws-head-for-ballot-showdown.html#storylink=cpy

    Nick Groff reports a second attempt at a Nampa School District supplemental levy will go to vote Tuesday.

    The original $3.58 million per year, two-year levy did not pass in March, but the district will try this time for a reduced $1.6 million. The proposed levy would not increase property tax rates.

    Allocation of the money would be spread across three main areas: textbooks and technology for elementary schools, repairs and maintenance of buildings and grounds, and materials and supplies.

    The district will start the year $2.8 million short as a result of a budgeting error spanning two years. The district will cut substitutes, reallocate federal funds, cut supply budgets and not fill open positions to make up for the shortfall.

    Allison Westfall, the district’s public information officer, said the supply budget is cut by half, and if the levy passes, schools could have some funds added back to the supply budget. Otherwise, levy funds will be used specifically where noted on the ballot.

    Chairman of the Board of Trustees Scott Kido expressed the importance of the levy in a letter addressed to parents in the district, especially given the circumstances.

    “It is important again to note that this levy is to address important needs of the school district and is not a result of the recent budget shortfall,” Kido said. “These are separate needs, but included in this levy are money for classroom supplies, which now has become a very critical need.”



    The Homedale School District is proposing the renewal of the existing COSSA levy. The purpose of COSSA is to provide programs and education the district could not otherwise provide in areas of special education, gifted and talented education and professional-technical education. In 2011-12, 339 Homedale students were enrolled in a program with COSSA.


    The Kuna School District is proposing a $3.19 million per year, two-year supplemental levy to eliminate the lay off of up to 25 teachers district-wide. The money will also decrease class size, improve participation by eliminating class and extra-curricular fees and keep driver’s education.


    The Notus School District is proposing the renewals of the existing COSSA levy and plant and facilities levy of $150,000. The levies will help maintain the district’s involvement with COSSA and help repair buildings and grounds.


    The Wilder School District is proposing a $310,000 per year, two-year supplemental levy to eliminate 10 furlough days, cancellation of all extra-curricular activities including sports and continue participation in COSSA. The district would also have to cut supplies, reduce technology and eliminate classified and support staff if the levy does not pass.


    AP reports the campaign working to overturn Idaho’s education reforms has launched a new radio advertisement calling a laptop program required under the plan an “unfunded mandate” that will require schools to spend millions of dollars they don’t have.

    But the ad’s claim that the laptops are unfunded conflicts with the $2.5 million lawmakers set aside to pay for the devices this fall when they’ll go to every high school teacher. Students will start getting the laptops in 2013 under the reforms by public schools chief Tom Luna.

    The fight over the three laws in Luna’s reform package is heating up with less than three months left before Idaho voters decide whether to keep or ditch the sweeping changes that limited collective bargaining, phased out teacher tenure, introduced merit pay and put more technology in the classroom while requiring students to take online classes.

    The ad launched last Friday by Vote No on Propositions 1,2,3 says: “Tom Luna and the politicians in Boise are pushing Props 1, 2 and 3. Prop 3 is an unfunded mandate requiring schools spend millions of dollars they don’t have on expensive laptops that are all too easily broken by kids when they take them home.”

    A strong opponent of Luna’s reforms in the Legislature, retiring Rep. Brian Cronin, is a now a strategist for the campaign working to overturn the laws with a November referendum. Cronin defended use of the term “unfunded mandate” to describe the $60 million laptop program, saying it lacks a long-term, stable funding source.

    “It’s a big and expensive program. We’ve appropriated a tiny bit of money to pay for the first part of it, but we’re going to continue to raid the current programs we have to pay for something we probably don’t need and is not likely to raise student achievement,” Cronin said.

    The claim that there’s no assured funding for the laptops in the future, leaving schools on the hook, is inaccurate because the reforms are now Idaho law and statutorily require funding, Luna spokeswoman Melissa McGrath said.

    “The Legislature has to fund them or they have to change the law,” McGrath said.

    Also, lawmakers didn’t dip into other parts of the public schools budget for the laptop money because it was new revenue, she said.

    Luna’s reforms did shift $14.7 million from salaries to pay for other changes, such as increasing the minimum teacher pay, restoring salary increases for teachers furthering their education and paying for high school students to earn college credit.

    The shift from salaries was one of the most debated pieces of Luna’s plan, and further deductions were eliminated with 2012 legislation, leaving lawmakers to find the money for the reforms. That initial $14.7 million withdrawal, however, wasn’t backfilled and will continue.

    For his part, Cronin takes issue with a new ad from the YES for Idaho Education campaign that makes the case for the reforms, saying: “While we’ve seen some improvement in the last few years, we hit a ceiling. We could either keep banging our heads against that ceiling, or we could pass the Students Come First legislation.”

    “The idea that we’ve somehow hit a ceiling and we can’t do any better is rather absurd, given the very low level of investment that we make,” Cronin said, referencing Idaho’s status among states with the lowest spending per pupil. “There are things that we can do, but they generally require greater investment.”


    Samantha Wright reports Boise State President Bob Kustra says times are changing for colleges and universities, including his own.  In his tenth annual State of the University Address, Kustra reflected on recent funding cuts, and how the university has responded.

    He told a room full of faculty and staff that he’s as challenged and scared as they are. “These are challenging times, they’re scary times, there’s no question about it.” 

    He says the landscape of the public university is still changing, four years after the Great Recession hit in 2008. “And all the hopes and aspirations and the dreams we had, all the things we could do because we had the support of the state appropriation, all of those things had to be re-examined.”

    Boise State gets just 18 percent of its budget from state dollars.  That compares to 43 percent back in 1997.  Kustra says the University now relies more on student fees, federal grants, and private gifts. This year, in fact, marks the first time tuition and fees will generate more revenue for the school than state dollars. “Okay we’re an 18 percent university.  And when your only an 18 percent university, we’ve got to find another way, we’ve got to build another revenue model,” says Kustra.

    That model includes new partnerships with industry and the private sector.  Kustra also wants to incorporate more technology in and out of the classroom.  That includes more online class offerings.  Boise State offers more than 1,000 courses online.  Twenty six percent of students take one or more online class each semester.

    Boise State faculty welcomed the president’s speech, many said his ideas are exciting.  Amy Moll is the Dean of the College of Engineering.  She says doing more with less money is never easy. “I think it’s always a challenge, it’s real life, it’s how do we continue to serve our students, we have the challenge of how do we just offer enough seats, enough spots in the classroom, we have to look at ways we provide that learning opportunity and do it with a little less money,” Moll says.

    She likes that Kustra focused on student learning and promoting critical thinking in the classroom.

    Mark Wheeler is the Dean of Extended Studies. “I think he talked about a wide range of challenges and how he’s confident the University will confront them and make a lot of progress in the years ahead.”

    One Dean says the speech was a “call to action” and Kustra has big ideas that are exciting to faculty and staff.


    Mitch Coffman reports the business personal property tax has been a hot button item for the last couple of legislative sessions with some lawmakers and business groups trying to repeal it. An effort is planned in the 2013 legislative session to get rid of the tax.

    The most vocal opponent of the bill has been county government. A number of counties have come out against the repeal of the tax for fear it will shift tax burdens and may cause cuts in county services. Earlier this summer, southeast Idaho county officials said in a Pocatello newspaper article they estimated a $135 million loss in revenue.

    The Idaho Association of Commerce and Industry (IACI) is leading the push to get the ball rolling to repeal the tax. Alex LaBeau, president of IACI, said that the $135 million revenue loss is for the entire state, not just those counties.

    LaBeau said his group has been working with counties and the state county organization on finding some common ground for repeal of the tax, but without any success. He says it’s time to step away from negotiating with the counties and get the tax repealed. “The fact of the matter is, the counties and IACI, we’ve been talking for five years and we’ve tried to appease all of the concerns they have, and they just don’t want to negotiate. So I think that we’re in a position where we just have to move a bill.”

    The counties’ unwillingness to compromise, says LaBeau, even when they’re getting what they want, is frustrating to IACI and proponents of repealing the tax. “We had a piece of legislation a couple years ago where they demanded eight different items in there, and we gave them all eight and then some, and they still chose to then oppose it.”

    Why the resistance to repeal of the tax? LaBeau says, “I think there’s just an unwillingness to move on the personal property tax issue, in general. I’m in this position where we have to deal with this. It’s a bad tax, everyone knows it’s a bad tax and we can’t just keep perpetuating it just because a few local governments don’t want to step up to the plate and make some changes.”

    LaBeau says that counties have been increasing their budgets rapidly during the last six years, while the state has worked hard at holding the line on spending. “It’s a pretty substantial increase (by the counties). You know, while it takes money to run government, the state budget has only increased 7.8 percent in that same time frame.”

    The IACI president noted that the only county not to raise taxes during that timeline was Shoshone County.Caribou County, by contrast, raised taxes by 56 percent, making the county heavily reliant on the personal property tax.

    House Majority Leader Mike Moyle, R-Star, says repeal of the personal property tax has a better chance than in the past of getting through the Legislature in 2013. He supports ending the tax.

    Moyle says one element not in the proposed repeal legislation he has seen is a plan to provide some type of gap funding to compensate for the loss of personal property tax revenue. When the state repealed the agriculture tax in 2001, some monies were allocated to make up the difference to units of government impacted by the loss of the ag tax. “This bill (currently being floated) isn’t written that way yet,” says Moyle, “but it may get there eventually.”

    Robert McQuade, Ada County assessor, said he can’t speak on behalf of the entire county, but only his office. McQuade says he personally wouldn’t mind seeing the tax go away if the revenue loss is replaced. According to McQuade, “It’s very difficult to assess, not everyone pays it who should be paying it. It’s just a very difficult tax to administer. So, in that sense, I think it’s really going to be welcome. But, some counties will be harmed by the amount of dollars lost if the money is not replaced.”

    McQuade said should the money be replaced, he would be all for repealing the personal property tax because it would make his office’s job “that much easier and more fair.”

    One of the southeast Idaho counties cited in thePocatello newspaper story as concerned about repeal of the tax is Caribou County, home of a Monsanto facility in Soda Springs that employs 300-400 workers. The plant processes phosphorous, which, for example, is used in producing Roundup.

    Trent Clark, public and government affairs director for the company, says Monsanto “fully recognizes the counter-economic productivity that is created by the personal property tax, and we are supportive of action to make that tax not as counter-productive to economic development. To make it so that it does not run counter against the return on investment for new tools and equipment purchased. We think that hampers economic development.”

    Clarkdid say, though, that a complete repeal of the tax is a different issue. “Fifty-two percent of our local school district in Caribou County is right now funded off of the personal property tax. We’ve been opposed to a simple, flat-out repeal of personal property tax that has the effect of doubling real property taxes.”

    Clark says his company is willing to work with the county to find the best of both worlds. “We would be supportive of working with the county to make that tax so that it doesn’t stand in the way of economic development, but is not harmful to individuals’ home property taxes.”


    Betsy Russell reports Idaho’s state Land Board has voted unanimously to approve a recommendation from the state’s Endowment Fund Investment Board for no increase in the distribution from the state endowment to public schools next year, holding schools at their current annual distribution level of $31.3 million. Larry Johnson, investment manager for the endowment fund, said the board recommended a 2.8 percent increase in total distributions from the endowment, based on earnings, but no increase for public schools and one other beneficiary, normal school, because their reserves are not yet at the target level, which is enough to cover five years’ worth of distributions.

    The board also recommended that $7.9 million from earnings reserves for six endowments be transferred into their permanent funds on Sept. 1, because those endowments, which include penitentiary and university, now have more than five years worth of distributions in their reserves. “The recommended distributions and transfers appear to be achievable and represent an appropriate balance between the interests of current and future beneficiaries, taking into account the current level of earnings reserves and expected future fund revenues,” Johnson said in his report to the Land Board.

    The Idaho Constitution requires the state’s endowment to be managed for maximum long-term returns to the beneficiaries, the largest of which is the state’s public schools. With no discussion, Attorney General Lawrence Wasden moved to approve the recommendation, Secretary of State Ben Ysursa seconded the motion, and it passed unanimously. State Superintendent of Schools Tom Luna wasn’t at the meeting; he’s out of state.


    Betsy Russell reports:  Idaho Sen. Mike Crapo and Congressman Mike Simpson are inviting the public to a discussion of the “fiscal cliff” and financial and debt issues facing the country, on Monday at the Idaho Statehouse. The discussion will feature Maya MacGuineas, president of the Committee for a Reponsible Federal Budget. Crapo’s office said the committee is “launching a new effort to go out at the state level to spread the word about the need for a bipartisan solution to these imminent, dire threats to all generations of Americans.” The session will run from 12:15 to 1:15 p.m. in room WW55, and is entitled, “A critical discussion on solving the debt crisis facing all Idahoans and Americans.”

    For those who can’t attend in person, the session will be live-streamed by Idaho Public Television; you can watch live here. Click below for more info.




    U.S. Senator Mike Crapo

    U.S. Representative Mike Simpson

    Maya MacGuineas, President of the Committee for a Responsible Federal Budget

    Monday, August 20,  12:15 PM to 1:15 PM

    Idaho Statehouse

    As a member of the U.S. Senate’s “Gang of Six” and the Bowles-Simpson Commission, Idaho Senator Mike Crapo has been working to expand support for a wide agreement on spending reduction, entitlement reform, tax reform, and budget process reform, with a goal of producing significant economic growth, new job creation and debt reduction.  Working side-by-side with counterparts in the U.S. House, including Representative Mike Simpson, the bipartisan, non-profit Committee for a Responsible Federal Budget is launching a new effort to go out at the state level to spread the word about the need for a bipartisan solution to these imminent, dire threats to all generations of Americans.

    Maya MacGuineas, the President of the Committee for a Responsible Federal Budget, will be in Boise on  on August 20th at the invitation of Crapo to join a discussion about the serious financial issues facing our country.  She and Crapo will also discuss elements of a bipartisan way forward to solve our debt issues before we go over the “fiscal cliff,”  as it is necessary for Congress, President Obama and all Americans to pull together to end this debt crisis.

    WHEN:  Monday, August 20,  12:15 PM to 1:15 PM

    WHERE:  Idaho Statehouse, Lower (Garden) Level, West End Senate Committee Room WW-55



    The Committee for a Responsible Federal Budget

    The Committee for a Responsible Federal Budget is a bipartisan, non-profit organization committed to educating the public about issues that have significant fiscal policy impact. The Committee is made up of some of the nation’s leading budget experts including many of the past Chairmen and Directors of the Budget Committees, the Congressional Budget Office, the Office of Management and Budget, the Government Accountability Office, and the Federal Reserve Board.


    The Committee for a Responsible Federal Budget (CRFB) runs a number of ongoing projects. Among them include US Budget Watch (www.usbudgetwatch.org), a project funded by Pew Charitable Trusts which has reported on important fiscal issues through and beyond the 2008 Presidential election. Through generous support from the Peter G. Peterson Foundation and Pew Charitable Trusts, CRFB also runs the Peterson-Pew Commission on Budget Reform. Another CRFB project is Stimulus.org (www.stimulus.org), which monitors the extraordinary actions taken by the government during the current economic crisis and puts out regular reports and releases on various budgetary issues. CRFB also runs the Fiscal Roadmap project, created to help policymakers navigate the country’s serious economic and fiscal challenges.

    Finally, CRFB’s two most recent projects are the Moment of Truth Project and the “Go Big” initiative. The Moment of Truth Project is a non-profit, non-partisan effort created to use the findings of the National Commission on Fiscal Responsibility and Reform to spark a national discussion on the need to implement a comprehensive budget fix and to help further develop policy reform ideas to improve the nation’s fiscal outlook. Through the Go Big initiative, CRFB is working to urge leaders in Washington to enact a comprehensive deficit-reduction plan of at least $4 trillion to put the U.S. back on a sustainable fiscal path. In order to stabilize and reduce debt as a share of the economy, lawmakers will have to be bold and “go big.”


    Maya MacGuineas

    Maya MacGuineas is the President of the Committee for a Responsible Federal Budget. Additionally, she is the Director of the Fiscal Policy Program at the New America Foundation, a nonpartisan think tank. Maya testifies regularly before Congress and has published broadly, including articles in The Atlantic Monthly, The Washington Post, The New York Times, the Financial Times and the Los Angeles Times. Once dubbed “an anti-deficit warrior” by The Wall Street Journal, Maya comments often on broadcast news and is widely cited by the national press. In the spring of 2009 Maya did a stint on The Washington Post editorial board, covering economic and fiscal policy.

    Maya has worked at the Brookings Institution and on Wall Street. As a political independent, she has advised numerous candidates for office from both parties, and works regularly with members of Congress on health, economic, tax, and budget policy. She serves on the boards of a number of national, nonpartisan organizations and received her Master in Public Policy from the John F. Kennedy School of Government at Harvard University.


    Molly Messick reports:  The Nampa School District has discovered a budget problem.

    Last school year, due to an accounting error, it spent $2.8 million it didn’t have. Boise State Public Radio’s Adam Cotterell has the full story.

    The given reason for the error is worth special note at StateImpact.

    Superintendent Gary Larson tells Cotterell the miscalculation came about because the district’s finance team is understaffed.  As state funding for districts fell in recent years, Larson says, he decided to leave some finance department positions unfilled.

    “At the time it was a signal that we are in this together, the district office and the schools,” Larson says. “Well, as a result it impacted our finance department and I think we got too thin, and because we were thin I think we made these human errors.”

     It’s unclear whether there’s a straight line between the Nampa district’s short-staffing and its budget errors.  However, this story falls into a general category of stories we’ve reported in recent months.

    In the small town of Rockland, in southeastern Idaho, funding for the local school district has fallen by 20 percent in the last three years.  There, local voters have passed the highest levy rate in the state to keep their school afloat.

    In Council, Idaho, local loggers and tradesmen have volunteered their time and labor to helpreopen the shop program.  In that district, state funding has fallen by more than 25 percent in the last four years.

    Both are examples of state cuts leading to local costs.

    In Nampa, Cotterell reports, the school district is appealing to voters to approve a $1.6 million levy. However, that money is designated for curriculum improvements.  To make up the newly discovered $2.8 million shortfall, the district will cut back.  And Superintendent Larson says that will leave still more positions unfilled.


    Maya MacGuineas guest opinion:  With the election season moving into higher gear and a “fiscal cliff” on the economic horizon, the American public will be hearing more and more about the crushing debt our country faces. As it happens, Idaho is extremely lucky to have two Members of Congress, Senator Mike Crapo and Representative Mike Simpson, who have been spearheading a growing, bipartisan charge to tackle the issue.

    That’s why I was honored to be joining these two leaders in Boise to discuss the work of the Campaign to Fix the Debt. We launched the campaign in July as a non-partisan push to put America on a better fiscal and economic path. Members of the campaign have come together from a variety of social, economic and political perspectives, united around a common belief that America’s growing federal debt threatens our future prosperity and that we must address it.

    Over the coming months, we will mobilize key communities—including leaders from business, government, and policy—and voters all across America to urge our elected officials step up and solve our nation’s serious fiscal challenges by passing a comprehensive deficit reduction plan.

    Luckily, courage and leadership on this issue are not exclusive to the Idaho delegation. Senator Crapo and Representative Simpson are part of a small but expanding circle of lawmakers from both houses of Congress and both sides of the aisle who are willing to discuss, and seek common ground on, the hard choices necessary to set us on a sustainable budget track.

    The case for action on this front is stark. Public debt is equal to more than 70 percent of the U.S. economy and is on track to rise well over 100 and 200 percent in the next few decades. That’s way above historical levels we’ve experienced here in the U.S., where debt has averaged about 40 percent of our economy, and way above levels economists consider to be safe.

    The corrosive effects of such deep debt threaten our standard of living and our fitful recovery from the Great Recession. Unchecked, it will almost certainly mean higher interest rates throughout the economy. That will make it much harder to buy a new car, buy a new house, or start a new business. It will also make the cost of everyday activities more expensive. On a national scale, this translates into a slower economy, with fewer jobs and lower wages.

    But it’s not all doom and gloom. Since its launch a few weeks ago, our campaign has been getting a great deal of attention and support. I can tell you from the emails, letters, phone calls and Tweets we receive that the American people are hungry for an adult conversation on what we are up against and how we can fix the debt.

    I am often asked what everyday people can do to influence this crucial debate. My answer is to (1) thank those elected officials who have already committed themselves to the cause and (2) make sure, during the fall campaign and beyond, to press candidates and officeholders to explain exactly what they will do to fix America’s finances and avoid saddling our children and grandchildren with a crippling debt burden. I also encourage them to sign up to receive more information on the issue and join the cause at www.FixTheDebt.org.

    Despite all of the roadblocks and inertia that confront those seeking to bring people together, across party lines, to find common ground on this issue, I am convinced that it can and will happen. But not without a groundswell of grassroots support that lets every politician know that kicking the fiscal can down the road is no longer acceptable—and may be harmful to their political health.

    While there certainly are brave lawmakers in Washington trying to forge a bipartisan consensus on debt reduction, we’re not there yet. We need every American’s help to get a meaningful deal done. In the past, this country’s greatest challenges have inspired some of our finest moments. I am confident that this can be one of those moments.

    Maya MacGuineas is the president of the Committee for a Responsible Federal Budget. Senator Crapo, Congressman Simpson, and she will be discussing the debt and possible solutions Monday at an event at the Idaho Statehouse at 12:15 p.m.


    Idaho Reporter.com reports:  Two communities in north Idaho, Sandpoint and Ponderay, could be asking voters in November for permission to assess alocal option sales tax on goods and services, according to a story in the Bonner County Daily Bee.  The two city councils are looking at a tax of between 0.5 and 3 percent. A 60 percent approval figure is needed to enact the tax.

    Ponderay and Sandpoint city councils met in joint session Tuesday night to discuss the possibility of adding a local option tax to the ballot this November. While the particulars of the proposed tax will be ironed out in the coming weeks, it will likely be a sales tax on goods and services between 0.5 and 3 percent.

    Figures from the cities indicate a 0.5 percent tax bring in  $612,500 per year.  A 3 percent tax would realize$3.6 million annually.

    Betsy Russell reports:  Wondering where the state’s finances stand? The Division of Financial Management recently revised its fiscal year 2013 General Fund revenue forecast downward by $29.6 million to $2.6077 million; add that to the state’s beginning balance for fiscal year ’13, which started July 1, and there’s $36.1 million more available than the estimate used by the Legislature this year to set the FY 2013 original appropriation. Included in the revisions: Impacts of law changes, including a $35 million permanent tax cut for corporations and top earners.

    The revised forecast is 3.2 percent above actual collections in fiscal year 2012. The state still must cover costs for fires, pests and hazardous material incidents that occurred last year, but even after that, there’s an estimated ending balance for FY 2013 of $31.8 million. That’s $27.3 million higher than what lawmakers expected at the close of this year’s legislative session – in other words, if the forecast holds, it’s a surplus.

    Although July state tax revenues came in slightly below the forecast, at $3.4 million below, revenues still are tracking higher this year than last year – $10.1 million higher. The Legislature’s monthly General Fund Budget Monitor report lays out the numbers; you can read it here.


    Governing Magazine reports: A recent report by two Maryland think tanks makes the case for state retirement systems to dump Wall Street investment firms for more passive equity index funds.

    The study by the conservative-leaning Maryland Tax Education Foundation and Maryland Public Policy Institute outlines fees state pension funds pay investment firms, totaling $7.8 billion nationwide in 2011. This price tag is too high, the authors argue, given their meager returns in recent years.

    Pension experts interviewed for this story, though, question the validity of the report, which compares investment firm fees with each plan’s net assets. Even with the higher fees, they say additional returns from investment managers outweigh the added cost in the long run, and tossing more money into equity index funds wouldn’t diversify portfolios.

    “The suggestion that all public pensions should be shifted into index accounts is just not well informed,” said Keith Brainard, research director for the National Association of State Retirement Administrators.

    Index funds — more passive than actively-managed funds — are structured to mirror a market index, typically making up a fourth to a third of a retirement system’s total assets, Brainard estimated. These funds also come with fees, but at lower rates than actively-managed funds.

    In exchange for higher fees, managers with investment firms pledge to beat the stock market. State pension systems paid fees averaging 0.409 percent of beginning-of-year assets in fiscal year 2011, according to the report.

    By investing 80 to 90 percent of portfolios in index funds, the study estimates retirement systems could pocket more than $6 billion annually in payments otherwise going to investment firms.

    “This would be a safer, more responsible use of system resources than paying Wall Street management firms millions of dollars each year to deliver sub-par results on public stocks and bonds and risky private alternative investments,” the report states.

    But Brainard of NASRA, whose members are directors of public retirement systems, says funds can’t attain true diversification if nearly all their money is tied to market indices. Fund managers often shift money between active and passive funds depending on market conditions.

    No one disputes that firms failed to meet targets in recent years. The report cites S&P Dow Jones Indices data showing 84 percent of actively-managed U.S. equity funds failed to achieve benchmarks in 2011. But in the long run, Brainard argues pension funds usually earn back fee costs. “[The report’s authors] are overlooking the potential value that is being added,” he said. 

    Fees paid by Missouri state, local and public school employee retirement systems, as calculated as a percentage of assets,topped all others for fiscal year 2011. Combined fees for the three retirement systems totaled $506.7 million, or 1.4 percent of beginning-of-year net assets.

    Accordingly, one of these pension funds, the Missouri State Employees’ Retirement System, reported a 7.1 percent annualized return for the 10-year period up through June 2011, the highest rate of all state funds surveyed in a recent report by investment firm Cliffwater.

    Of the 69 funds the firm surveyed, the following systems recorded the strongest performance over 10 years:

    Rank System 10-Year Annualized Return
    1 MOSERS 7.10%
    2 South Dakota Retirement System 7.00%
    3 Oklahoma Teachers’ Retirement System 6.90%
    4 Texas CDRS 6.90%
    5 Delaware PERS 6.70%
    6 Louisiana State Employees’ Retirement System (LASERS) 6.70%
    7 Iowa Fire & Police 6.70%
    8 Washington State Inv Board 6.70%
    9 Massachusetts PRIM 6.50%
    10 Oregon PERS 6.50%

    After the Missouri systems, the Oregon Public Employees Retirement System and Maryland State Retirement and Pension System paid the next-highest fees as a percentage of beginning-of-year assets.

    Much of the report focuses on Maryland’s performance, which the authors argue lagged behind others in recent years despite paying higher Wall Street fees. The Maryland Tax Education Foundation compiled data showing the system’s returns trailed six nearby state pension funds by an average of 0.9 percent over the past 10 years.

    Jeffery Hooke, an investment banker who serves as chairman of the foundation, co-authored the report with Michael Tasselmyer of the Maryland Public Policy Institute, which has received funding from the conservative Cato Institute and is a member of the State Policy Network, a national group of “free-market think tanks.” 

    Many of these pension funds face pressure to assume lower rates of return. Shifting money to index funds would only exacerbate this, said Lisa Lindsley, director of capital strategies for the American Federation of State, County and Municipal Employees.

    The amount of assets funds allocate to index funds typically relates to specific investment objectives. “I think we need to allow the governing structure of the pension funds to work,” Lindsley said.

    Some systems, including the California Public Employees’ Retirement System, are actively negotiating with firms to push down fees.

    “We really encourage our trustees to look at the predatory nature of investment managers,” Lindsley said.

    Howard Pohl, a principal at Chicago-based investment firm Becker, Burke Associates, faulted the report for not examining how well funds achieved their individual objectives. Some funds are more aggressive than others, with performance relative to different mixes of assets. 

    While the funds require higher fees, Pohl said it’s more important to assess whether the actively-managed funds translate into larger returns. In general, these returns trump the cost when compared to passive index accounts over longer periods exceeding a decade, he said.


    But few funds have fared well in recent years.

    “We’ve been in a period of non-selectivity in the markets,” Pohl said. “An index in that environment should do better.”

    Pohl also questioned why the report compared fees to beginning-of-year net assets rather than to totals at the end of the year.

    “The implication that all these plans all over the country are being duped by these city slickers from Wall Street is extremely naïve and not supported by the facts,” he said.


    The Maryland Public Policy Institute compiled net assets and investment fees from major state retirement systems’ comprehensive annual financial reports. Some figures were summed from multiple systems; specific CAFR reports used are listed on pages 4 and 5 of the report.

    Figures listed are in million dollars.



    Select State:–Select All–AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

    Fiscal Year
    Year-Starting Assets
    Year-Ending Assets
    Management Fees
    Fee % of Beginning-of-Year Assets
    Alabama 2011 25,435.65 25,092.79 14.234 0.056
    Alaska 2011 13,807.67 16,489.64 90.162 0.653
    Arizona 2011 27,978.79 33,531.45 150.121 0.537
    Arkansas 2010 13,152.80 14,612.07 51.912 0.395
    California 2011 334,495.65 401,194.34 858.942 0.257
    Colorado 2010 35,036.94 41,135.79 153.924 0.439
    Connecticut 2011 21,869.59 25,183.67 89.625 0.410
    Delaware 2011 6,372.54 7,648.78 22.302 0.350
    Florida 2011 107,179.99 126,579.72 354.999 0.331
    Georgia 2011 59,604.13 69,563.89 35.08 0.059
    Hawaii 2009 10,846.79 8,815.29 80.504 0.742
    Idaho 2011 10,410.58 12,377.60 41.851 0.402
    Illinois 2011 50,085.91 59,452.46 297.667 0.594
    Indiana 2011 22,182.16 25,755.67 137.421 0.620
    Iowa 2011 19,878.08 23,082.13 41.933 0.211
    Kansas 2011 11,369.74 13,468.85 47.586 0.419
    Kentucky 2011 25,753.16 30,292.27 92.432 0.359
    Louisiana 2011 20,076.11 24,280.71 132.86 0.662
    Maine 2011 9,225.96 11,051.69 19.705 0.214
    Maryland 2011 31,923.70 37,592.80 221.243 0.693
    Massachusetts 2011 41,284.31 50,245.77 69.218 0.168
    Michigan 2011 47,132.26 46,106.07 186.661 0.396
    Minnesota 2011 44852.43 53,075.45 66.928 0.149
    Mississippi 2011 18,274.11 22,133.85 42.765 0.234
    Missouri 2011 36,661.68 43,421.12 507.662 1.385
    Montana 2011 6,994.38 8,305.94 42.819 0.612
    Nebraska 2011 8,200 9,600 (omitted) (omitted)
    Nevada 2010 18,770.14 20,906.28 23.899 0.127
    New Hampshire 2011 4,898.34 5,891.18 18.446 0.377
    New Jersey 2011 74,648.17 81,067.61 13.417 0.018
    New Mexico 2011 18,712.60 22,131.22 52.487 0.280
    New York 2011 272,878.87 315,448.87 821.513 0.301
    North Carolina 2011 65,300 74,900 295.1 0.452
    North Dakota 2011 3,127.74 3,743.38 20.759 0.664
    Ohio 2010 140,766.21 153,981.87 296.142 0.210
    Oklahoma 2011 14,341.30 17,220.81 43.4 0.303
    Oregon 2011 51,739.65 61,189.78 364.687 0.705
    Pennsylvania 2010 67,868.99 71,723.63 758.141 1.117
    Rhode Island 2010 6,069.03 6,577.14 13.052 0.215
    South Carolina 2011 22,691.66 25,891.85 71.05 0.313
    South Dakota 2011 6,496.63 7,936.27 37.852 0.583
    Tennessee 2011 28,574.20 33,663.31 32.213 0.113
    Texas 2011 116,983.29 130,518.44 246.957 0.211
    Utah 2011 23,012.75 23,218.74 50.105 0.218
    Vermont 2011 2,956.97 3,470.32 13.993 0.473
    Virginia 2011 47,651.23 54,562.26 320.03 0.672
    Washington 2011 57,630.14 68,311.83 227.902 0.395
    West Virginia 2011 8,946 10,750.84 28.167 0.315
    Wisconsin 2010 69,996.30 75,872.07 245.806 0.351
    Wyoming 2010 6,006.53 6,665.57 17.28 0.288







    Emilie Ritter Saunders reports:  If fewer Idahoans have jobs, that means the state doesn’t collect as much revenue.  That in turn can determine how much money is available for schools, road repair and health services.

    So we took notice last week when the governor’s budget office revised down its estimate of revenue coming into the state’s bank accounts.

    The Division of Financial Management typically evaluates its forecast for the coming fiscal year in August and again in January.

    In past years, a downward revision in August has meant hold-backs — that’s when the state cuts agency budgets midway through the fiscal year.  But legislative budget and policy analyst Keith Bybee doesn’t anticipate hold-backs this time around.

    “We carried over close to $100 million from [fiscal year] 2012 to 2013,” says Bybee.  “We’ve got plenty of reserves to cover the ’13 budget, what will be interesting is the 2014 budget.”

    Bybee says if the state doesn’t see significant economic growth between now and then, the state may not have the cash to cover structural imbalances in the budget.  “All bets are off as far as are we cutting or growing the budget [in 2014],” Bybee says.

    One of the main reasons DFM revised the budget forecast down is because the Legislature approved a tax cut for Idaho’s top earners.  That means about $30 million automatically disappears from Idaho’s annual balance sheet.

    Bybee believes another reason for that forecast change is because Idaho’s jobless rate isn’t steadily improving.  After nine straight months of a declining unemployment rate, that measure of economic health ticked up in May.  It dropped slightly in June.  On Friday we’ll see how July fared.

    While these incremental changes to the state’s revenue forecast may not carry much weight for the average person, it’s a significant measure of how Idaho’s economy is faring.


    NPR Morning Edition reports:  The addition of Rep. Paul Ryan to the GOP ticket is certain to elevate health care as a campaign issue this fall. Most of the debate is likely to be about Medicare and Ryan’s controversial plan to transform the popular program for the elderly and disabled.

    But some of the attention is likely to focus on Medicaid, the health care program for those with low incomes, as well.

    Medicaid — not Medicare — is actually the nation’s largest health insurance program, covering some 60 million Americans with very limited incomes. But you’d be excused for not knowing that, because Medicaid doesn’t get nearly as much attention as Medicare does.

    That may be changing, however. The Supreme Court earlier this summer put the program in the news when it ruled that the Medicaid expansion in the 2010 health care law must be optional for states.

    That’s given more ammunition to Republicans, including presidential candidate Mitt Romney, who want to offer states far more responsibility for Medicaid.

    “The state is the best place to determine what is the best way to help those poor,” Romney said in a health care speech at the University of Michigan in 2011. “And so I would therefore block grant to the states’ Medicaid funds, and say to the states, ‘You now use these monies as you feel appropriate to care for your own poor.’ “

    Only there’s a catch, said President Obama in a speech to Associated Press editors in April. Under the Republican congressional budget Romney has endorsed, Medicaid funding would not only be turned back to the states — it also would be cut substantially.

    “They would have to be running these programs in the face of the largest cut to Medicaid that has ever been proposed,” he said, “a cut that, according to one nonpartisan group, would take away health care from about 19 million Americans.”

    Among those, he said, would be “someone’s grandparents who, without Medicaid, won’t be able to afford nursing home care. … Many are poor children. Some are middle-class families who have children with autism or Down syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the people who count on Medicaid.”

    But Republicans on Capitol Hill counter that Medicaid doesn’t work very well.

    “Medicaid is breaking the bank,” said Rep. Tim Huelskamp, R-Kan., at a news conference last month.

    Huelskamp was speaking in support of a House bill that would transform Medicaid from its current status — as an unlimited entitlement program whose costs are shared between the federal and state governments — to a limited block grant to each state.

    “[Medicaid is] actually probably the worst care system that we have in the entire country,” he said.

    There’s a reason Huelskamp and others make that claim. Over the years, many studies have shown that people with Medicaid coverage do worse than people with other health insurance coverage or people with no coverage at all.

    But Medicaid researchers say those studies don’t portray Medicaid accurately.

    Katherine Baicker, a professor at the Harvard School of Public Health and a former economic adviser to President George W. Bush, says a lot of the studies haven’t been able to control for the fact that people who get Medicaid tend to be in worse health than people who don’t.

    “It’s not that Medicaid is causing the health outcomes to be bad; it’s that people with more health needs — or potentially more serious health conditions — are the ones who more likely successfully sign up for Medicaid,” she said in an interview.

    But now that’s changing. Last year, Baicker was part of a unique study that took place in Oregon. That state held a lottery for low-income adults to see who would gain Medicaid coverage and who wouldn’t. That gave researchers a chance to make apples-to-apples comparisons on how Medicaid actually affects enrollees’ health.

    Its findings were almost uniformly positive.

    “We found that gaining access to Medicaid increased health care use — and that was preventive care, doctor’s office visits, but also hospitalizations,” she said. “It dramatically reduced financial strain, such as lowering the likelihood of having a bad debt sent to collection, by 25 percent.”

    People who got Medicaid were also more likely to report being in better health as a result.

    Baicker is also a co-author of a study out just last month in the New England Journal of Medicine. It compared three states that expanded Medicaid to low-income adults with three neighboring states that didn’t. It wasn’t as scientifically rigorous as the Oregon study, but it had a much larger study group.

    “We found, in fact, that states that expanded Medicaid to that group of adults, relative to states that didn’t, had substantially lower mortality,” she said, meaning people who got Medicaid coverage were less likely to die than people who didn’t.

    The New England Journal of Medicine study couldn’t tell if Medicaid was the reason for the lower mortality or not. But it does refute other studies suggesting that Medicaid is bad for people’s overall health. And it’s likely to serve as still more fodder as the political debate over Medicaid heats up this fall.

    Click here to listen to this report.


    John Miller reports in 2011, Idaho’s Department of Commerce devoted a 37-page magazine to renewable energy, with Gov. C.L. “Butch” Otter touting geothermal, wind, solar and biomass. “Sustainable, renewable energy is going to play a big role in Idaho’s future,” Otter proclaimed.

    The publication now doubles as a grim recapitulation of projects where the lights have dimmed or gone out.

    Hoku Corp.’s $400 million Pocatello solar polysilicon plant has been mothballed, while Transform Solar, Micron Technology Inc.’s energy venture, is dead. A biomass power project at an Emmett sawmill highlighted in the magazine failed, too, forcing its developers this month to pay Idaho Power Co. $200,000 in damages.

    Additionally, independent wind and solar entrepreneurs complain Idaho’s policies have suffocated development. The 2011 Commerce publication spoke of Idaho’s renewables “sweet spot” — just as the Idaho Legislature that spring rejected keeping a tax rebate for alternative power producers alive.

    Peter Richardson, a Boise energy lawyer and would-be solar developer, contends his industry faces a “train wreck.”

    “New projects are non-existent,” Richardson said. “There’s no support for renewables in this state.”

    Even the future of funding for Otter’s Office of Energy Resources’ is in jeopardy because renewables haven’t panned out.

    The office was to be funded by royalties on federal geothermal leases, but those never materialized.

    Geothermal developers say declining natural gas prices, expiring tax incentives and a surplus of cheap, existing power amid the economic downturn now make developments in Idaho a tough proposition.

    “It would be very difficult for us to go out and take the risk to develop a new project,” said Boise-based U.S. Geothermal Inc. president Doug Glaspey, whose company operates one 10-megawatt project in southern Idaho and has another 22-megawatt plant due to come on line soon — in eastern Oregon.

    For the last half-decade, Idaho’s renewables industry has been dominated by wind projects.

    Developers installed hundreds of megawatts that regulated utilities had to buy, according to a 1978 federal law. State and federal tax breaks also made their projects attractive for investors.

    But the rush to wind turbines largely ended in 2010, when the Idaho Public Utilities Commission intervened on behalf of utilities that complained wind farms were driving up ratepayers’ costs.

    What has become a de facto moratorium was the subject of hearings last week at the Idaho Public Utilities Commission, pitting alternative developers against Idaho Power Co., PacifiCorp’s Rocky Mountain Power, and Avista Corp. The utilities aim to overhaul the regulator’s formula governing the price wind developers get for their electricity.

    “Wind is just not a good resource for Idaho Power,” Mark Stokes, the utility’s power supply manager, said Tuesday, contending wind is unreliable on hot, summer afternoons when the utility needs power for irrigation pumps and air conditioners.

    Renewables developers say utilities are ignoring benefits of electricity that doesn’t contribute to climate change.

    Back in the 2011 Commerce magazine, Exergy Development Group President James Carkulis, one of the state’s biggest wind developers, predicted his Boise-based company could install hundreds of megawatts of generation annually.

    Barely a year later, Carkulis says financiers that back his projects have grown wary of Idaho.

    “This has placed $323 million of our current 2012, under-construction renewable projects on hold and also impacted our cash flow from our operating projects in the state of Idaho,” Carkulis said.

    The cost of electricity in Idaho, produced largely by dams, coal-fired power plants and natural gas turbines, is second-lowest in the nation, according the Institute for Energy Studies.

    Consequently, regulated utilities have little economic incentive to buy electricity from renewables providers. And unlike Oregon and Washington policy makers, Idaho legislators haven’t required utilities to buy a percentage of their electricity from alternative projects.

    John Gardner, the director of the Energy Efficiency Research Institute at Idaho’s Center for Advanced Energy Studies, contends the absence of such incentives may be driving innovation beyond Idaho’s borders.

    “Legacy hydro prices have made energy costs so low, that for lack of a better word, we’re addicted to them,” said Gardner. “By focusing on cheap energy, what we’ve done is we’ve pitted new economic development against existing economic interests.”

    In Otter’s first State of the State speech in 2007, the incoming governor announced Hoku’s Pocatello solar plant, promising hundreds of high-paying construction and manufacturing jobs. Today, Hoku’s parent company faces potential bankruptcy; it laid off its last 100 Idaho workers this spring.

    Why? Solar manufacturers worldwide are saddled with production glut, rock-bottom prices and U.S. allegations of predatory Chinese pricing, just as Italy and Germany are slashing incentives that had propped up their solar industries — and Hoku’s hopes to supply them.

    Hoku declined comment.

    But an industry spokeswoman said these hardships are part of a global natural selection process weeding out the weakest competitors.

    “We’re seeing some companies succeeding and some companies consolidating, and others not,” said Monique Hanis, a spokeswoman for Washington, D.C.-based Solar Energy Industries Association industry lobbying group.

    Transform Solar’s short history in Nampa, Idaho, is nearly identical.

    In 2011, Otter conjectured Micron’s solar gambit might become Idaho’s next J.R. Simplot, the potato-processing giant that supplies McDonald’s fries. But this May, Transform’s 250 employees were told their jobs were ending; the vast parking lot at the company is now empty.

    The company’s demise was a gut punch to Department of Commerce director Jeff Sayer.

    Sayer was appointed by Otter in September 2011, months after the agency’s optimistic magazine was published, but he was still cheering for the projects it highlighted.

    “The setback of Transform Solar was a real blow to the state,” Sayer said. “I thought they were going to be one of our flagship tech-based companies.”