Wayne Hoffman
The Idaho Statesman
A panel voted Thursday (Feb. 5) to give state employees $5 million more than Gov. Dirk Kempthorne recommended – but there´s a hitch: The state would have to collect at least $5 million more in taxes than expected. And, the additional money would be a one-time infusion of cash into state workers´ pay.

But January´s tax receipts, lawmakers revealed Thursday, missed their mark for a second month in a row, leaving a $20 million gap in the state´s fortunes.

The January shortfall would be added to the December disappointment of $7 million.

Kempthorne´s office isn´t commenting, but legislators who have seen the information are concerned. “It´s kind of scary,” House Speaker Bruce Newcomb said. “I hope it´s an anomaly, but that´s exactly what happened last year.”

Senate Finance Chairman Dean Cameron said the weaknesses were sales and income taxes.

At least this year, the gap won´t lead to a round of 11th hour budget cuts. Thanks to a federal government bailout, Kempthorne´s budget would leave $72 million in the state´s general fund when the fiscal year closes June 30 — $52 million if the tax gap sticks.

Exactly a year ago, the Kempthorne administration reported tax collections had fallen short by $16 million in January, creating a $19 million budget gap.

Kempthorne budget administrator Brad Foltman declined comment on the latest turn of events, or even to confirm the lawmakers´ reading of the tax receipt data. “As far as I´m concerned, it´s incomplete information,” Foltman said.

But the governor did briefly discuss the shortfall in a meeting with legislative leaders late Thursday, and Senate Majority Leader Bart Davis said there was a sense that the tax collection information will have no effect on the setting of budgets. “Receipts are what they will be,” Davis said.

But if tax collections kick into high gear — April is the big month for that — state workers could split $15 million for merit pay increases.

That would put an end to a two-year pay drought that had been driven by a sour economy.

A joint House-Senate committee voted 16-4 in favor of the plan. The workers would see $10 million more money regardless – which is the 2 percent investment in salaries Kempthorne had recommended. The additional $5 million depends on the strength of tax collections.

“As employers, we need to do the best we can whenever we can” for state workers, said Boise GOP Rep. Kathie Garrett, who proposed the plan the Change in Employee Compensation Committee agreed to accept.

Boise GOP Sen. John Andreason tried to double the governor´s recommendation, with the additional $10 million being approved only if tax collections are robust.

Andreason called it “our chance to put our money where our heart is.” But his proposal failed on a 13-7 vote.

GOP Rep. Shirley McKague of Meridian objected to the more modest $15 million plan, saying lawmakers should keep in mind taxpayers “who have lost their very jobs with this downturn in the economy, and they certainly can´t receive raises.”

McKague, Nampa GOP Reps. Dolores Crow and Gary Bauer and Kuna GOP Sen. Jack Noble voted against the proposal.

Even though it could mean more money for state employees than what the governor had recommended, Andrew Hanhardt of the Service Employees International Union called the vote “disappointing.”

“It´s not enough,” he said. “It´s going to just get worse for state workers.”

Kempthorne Chief of Staff Brian Whitlock said the governor would likely be supportive of the plan because the additional money for raises is dependent on strong tax collections and is not automatic.