Printed on: January 08, 2013

Otter lays out agenda

By Clark Corbin
ccorbin@postregister.com

BOISE -- Gov. C.L. "Butch" Otter laid out plans for spending an additional $25 million on Idaho schools next year during his State of the State address Monday at the Capitol.

Otter's proposed 2014 budget listed $2.8 billion in general fund spending for the year -- an overall increase of 3.1 percent compared to this year's approximately $2.7 billion budget. The spending increase for public schools translates to about 2 percent -- but does not include money for raises for teachers or other state employees.

This year, many state employees received a 2 percent raise.

Although Otter asked for more money for schools, he made it clear he is not expecting the newly opened 2013 legislative session to be marked by major education reform proposals.

On Nov. 6, Idaho voters struck down the suite of Students Come First laws championed by Otter and Superintendent of Public Instruction Tom Luna. Otter stressed he does not want to revisit the reforms that voters shot down.

"What I heard was dissatisfaction with the process and a plea for more collaborative leadership," Otter said. "Let me say it again: I am neither calling for nor expecting major school improvement measures this year."

Instead, Otter asked education officials to assemble a group to "study the message voters sent us and identify elements of school improvement on which there is broad agreement."

Otter did not specifically address what lawmakers should do with about $37.4 million in funding that had been allocated to schools through Students Come First but now appears in limbo following the election.

As expected, Otter used his speech to call for eliminating the personal property tax. Otter set aside $20 million to offset the approximately $141 million in money raised by the tax that is split between cities, counties and schools. Otter told lawmakers any plan should consider the financial stability of local governments.

"This isn't necessarily about using state revenues to make counties whole," Otter said. "In fact, my preference is granting local-option taxing authority that enables county voters to decide for themselves how to address their most pressing needs."

Placing local-option taxing authority on the table was one of the few surprises in Otter's speech, which lasted about 42 minutes.

"That caught me a little flat-footed; I did not know he was going to propose supporting a local-option tax," said Senate Majority Leader Bart Davis, R-Idaho Falls. "I've always supported that, and it's always made a great deal of sense to me."

Following his speech, Otter said he favors leaving it up to local governments how they would create such a tax.

On health care reform, Otter called for no expansion to Medicaid benefits for Idaho adults, as outlined in President Barack Obama's federal health care plan. Citing the lack of a federal deadline, Otter asked for time to consider the issue, despite the fact that in November a 15-member panel he appointed unanimously recommended expanding Medicaid.

Otter also called for increasing government spending at a slower rate than the economy is growing. Otter's lieutenants forecast a 5.3 percent increase in state revenues over the current year's estimate, but just a 3.1 percent increase in state spending.

As the state's economy recovers, Otter asked for $35 million more to be set aside for state savings accounts, adding to the approximately $71 million that will be there before the end of this year. Prior to the recession, savings balances reached $400 million.

Finally, Otter called for returning the state budget to a structural balance -- meaning he called for no one-time money (such as stimulus funds) to be spent for ongoing programs.

"The Great Recession showed us beyond any doubt the value of maintaining a healthy financial reserve," Otter said. "As much as any other factor, it set Idaho apart from most other states in response to tough times."

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