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Transfer balances state budget; challenes remain

Gov. C.L. “Butch” Otter and leading legislative budget writers said year-end figures made public this week confirmed the wisdom of their responsibly conservative approach to balancing Idaho’s fiscal year 2010 budget.

The Office of the State Controller reported today that an $8.26 million transfer from the State’s Permanent Building Fund to the General Fund will be required to ensure that the State’s budget for the fiscal year that concluded on June 30, 2010, remains balanced. The transfer is slightly larger than earlier estimated by the Division of Financial Management due to lower-than-anticipated tax revenues received in June. The transfer will not impact the operation of State agencies in fiscal year 2011.

Preliminary figures show that General Fund tax collections for the 12-month period through June were $86.5 million below the State’s forecast. June’s monthly collections were $6.9 million less than anticipated.

“Some people vigorously opposed our cautious, conservative approach to budgeting, and some still do. They glom on to every inflated projection, urge us to spend millions of dollars in make-believe money, and have nothing but contempt for any other view. Fortunately for Idaho taxpayers, common sense and a steadier hand carried the day,” Governor Otter said. “The Legislature and I did what any family does when facing financial trouble – we looked for savings, we thought about what we could do without, and we made do with less. We lived within our means, and we didn’t raise taxes.”

“I want to express my sincere appreciation to the Legislature for its hard work in crafting a realistic and sound budget, and to my agency directors and all the State employees whose sacrifices and commitment to delivering essential State services made all the difference. They are dedicated public servants and good stewards of the people’s money,” the Governor said.

“Today’s figures reaffirm the necessity of the actions we took and represent careful, prudent stewardship of our taxpayers’ money,” Senate Finance Committee Chairman Dean Cameron said. “While the armchair quarterbacks, pundits and the minority party criticized us, the fact is they were wrong. Public schools, public health and public safety would have been in even more dire straits under their misguided approach.”

“The past couple of years have been tough. Nobody likes cutting services or reducing support for public schools,” House Appropriations Committee Chairman Maxine Bell said. “However, I have never shied away from doing what’s right. I’m thankful that we have a Governor who’s willing to join us in this heavy lifting and open to working with the Legislature in making the tough decisions necessary to ensure our State government lives within the people’s means.”

Governor Otter emphasized that the work of maintaining a balanced and responsible budget did not end with the close of the fiscal year. The Department of Health and Welfare, the Medicaid program and the Department of Correction all are facing significant shortfalls in the new budget year, and the Governor is committed to restoring public school support when revenues improve. In addition, the State’s rainy day accounts and the Permanent Building Fund will need to be replenished after being drawn down to cover shortages in fiscal years 2009 and 2010.

“While we have taken a great deal of abuse for the tough decisions we made last winter, today’s budget news once again confirms that the conservative approach taken by the Legislature and Governor was the correct course,” House Speaker Lawerence Denney of Midvale said. “By being careful and prudent, we have avoided even larger cuts to education and other State services.”

“Idaho’s financial situation, as critical as it is, has been stabilized by responsible budgeting and realistic revenue projections. The Legislature and Governor Otter have managed the spending in ways that have protected and maintained necessary public services,” Senate President Pro Tem Bob Geddes of Soda Springs said. “Asking for our citizens to sacrifice more during this difficult time-period would have been absolutely irresponsible.”

“Today’s budget numbers confirm that the Democrats were wrong. If left unchecked, they would have spent us into financial ruin,” House Majority Leader Mike Moyle of Eagle said.

“I believe that many in the Legislature are cautiously optimistic that the bottom of the global recession is behind us and the economy is stabilizing. However, tax revenues always lag behind economic activity and while Idaho’s economic outlook appears brighter than it has for several years, it still may be some time before Idaho has significant growth in our economy,” Senate Assistant Majority Leader Joe Stegner of Lewiston said. “We successfully balanced the budget last year, and I think the Legislature and the Governor will continue to provide that same fiscal responsibility for Idaho in the future.”

“This is what it looks like to manage your way through a downturn in the economy rather than throw up your hands and surrender to wholesale shutdowns and tax increases,” House Assistant Majority Leader Scott Bedke of Oakley said. “The minority party would have increased spending beyond our ability to balance the budget.”

“Everyone benefits from fiscal restraint and the stability it provides – both those receiving State services and the taxpayers who provide the funding,” House Republican Caucus Chairman Ken Roberts of Donnelly said. “Republicans in the Legislature took the correct approach by partnering with our Governor to keep spending in check.”