Gov. Dirk Kempthorne’s message to legislators, and indirectly to Idaho citizens and state agencies, this week spoke of promise and prudence…

Promise because the state’s economy appears to be recovering and the state budget appears to be on stable footing.

Prudence, or in Kempthorne’s words “restraint,” because legislators need to approach the FY2005 spending package with caution. With the end in sight of several major short-term revenue sources (including the planned rollback of state sales tax to 5 percent in 2006), legislators need to take a long-term approach to budgeting.

Combining the State of the State Address and the Budget Address – normally distinct and separate messages – confirms that the economy is foremost on everybody’s minds, says Julie Pipal, manager of Budget, Policy and Governmental Relations for the transportation department.

“The move to deliver one address instead of two was the right thing to do, given our circumstances… we can look at what he did with the budget as his commitment to maintain a strong state government,” she said.

State of the State addresses traditionally are “goal-driven” while budget messages are more “mechanical,” Pipal explains. Gov. Kempthorne’s approach this year confirms the two are interconnected. A vision for 2005 or 2006 will depend on the “mechanical” budget decisions legislators make this session.

“How we handle the mechanical will determine the programs and successes of the coming two years,” Pipal explains. The governor’s approach “shows he is looking out for the health of state government.

“It is clear that state agencies, to the extent they can, should take care of state employees. The Transportation Board has already made that commitment with the merit plan that is currently being implemented for employees.”

The board voted in late 2003 to award merit increases of 1-4 percent to ITD employees who have good performance reviews. The increase is scheduled to take effect late this month and will be funded through $2 million in salary savings the past year.

What are the implications of Gov. Kempthorne’s message for the Idaho Transportation Department and its employees?

“As an agency, we fared very well. Our task now is to continue to manage for the long-term,: Pipal said. “We need to keep doing the things that we’ve been doing… to do more with less.”

The governor’s budget recommendation for ITD is virtually unchanged from the department’s initial FY05 request. Kempthorne’s budget package requests spending authority of $425,910,300 for the department – only $16,400 less than ITD’s request. That does not constitute a budget reduction, Pipal explains, it merely represents a change in formula.

Only three days into the session, two ITD bills already are in the process, which is unusual, Pipal said. One bill will make permanent the transfer of the commercial truck audit function from ITD to the Department of Revenue; the other governs how contact bid disputes are resolved.

The quick start reflects the general mood of the Legislature: lawmakers appreciated the merging of State of the State and budget messages, and are ready roll up their sleeves, Pipal said.

“The mood of the Legislature is ‘let’s get down to business.' ”

Following the longest session in state history, Legislators are committed to keeping the 2004 session as short as possible.