BOISE — Idaho Gov. Brad Little focused on a package of tax cuts and infrastructure investments in his State of the State and budget message to state lawmakers on Monday, saying beyond that, he’s proposing a “no-frills budget.”

Little gave his third State of the State address in the shadow of the COVID-19 pandemic, departing from tradition to speak remotely, as lawmakers watched on screens, each house from its own chambers.

“I thought it was a good vision for the future, and I think things that we can work on with him and improve our state,” said Senate President Pro-Tem Chuck Winder, R-Boise.

The governor asked for a moment of silence to remember the more than 1,500 Idahoans who have died of COVID-19 since the pandemic began. He praised lawmakers, the Idaho National Guard, health care workers and hospitals for their work to cope with the pandemic.

"The COVID-19 reality is heartbreaking," Little said. "To Idaho's hospitals and health care workers, thank you."

He noted that the pandemic "turned our work lives, social lives and home lives upside down. It pushed our health care, education and unemployment systems to new lengths."

Yet, the state ended up with a significant budget surplus, as federal aid funds poured in, the economy continued to chug along despite the spring shutdown and people continued moving to Idaho by the thousands.

“The sound decisions of Idaho leaders in the past have gotten us to where we are today,” the governor said. “Let’s keep our state on this strong economic trajectory, together. Now is the time to make meaningful investments.”

The governor outlined a “Building Idaho’s Future” package of tax cuts and infrastructure investments that includes $295 million in one-time tax relief and $160 million in permanent, ongoing tax relief each year into the future, though he left the details of the cuts up to lawmakers.

He also called for restoring the cuts he imposed on the state budget at the start of the fiscal year out of concern for the pandemic’s impact on state revenues; and a $206 million investment into transportation, including $126 million one-time and $80 million ongoing into the future.

The governor also called for spending $54 million next year to expand broadband, economic development and tourism across the state; a $30 million investment in education to include addressing concerns raised by the pandemic’s impact; and tens of millions more in water and construction projects.

“My budget leaves a prudent surplus, bolsters rainy-day funds, and reflects my continued priority on education, including our valuable teachers,” he said.

His budget recommends $250 million to fully implement Idaho’s teacher “career ladder,” which has been phased in for several years to increase teacher pay.

House Speaker Scott Bedke said the governor’s priorities match those of legislative Republicans — with one big exception. The priority the House GOP put at the top of its list — “Balance of Power Realignment” — was missing from the governor’s agenda.

“Other than the balance of powers,” Bedke said, “we’re pleased to see that our priorities and the governor’s priorities, it doesn’t take a lot of spinning to make them be pretty well aligned.”

House Republicans plan to introduce a package of bills on Tuesday morning aimed at trimming the governor’s emergency powers. “That’s what we intend to do,” Bedke said. “That’s Job 1.”

The Senate plans to follow up with three more bills on Wednesday morning, Winder said, including requiring legislative concurrence to extend an existing emergency declaration; declaring all jobs in Idaho “essential”; and protecting rights to assemble and worship.

House and Senate Democrats found some common ground with the GOP governor over his proposals to restore budget cuts, fully fund Medicaid expansion and invest in broadband infrastructure, but they parted with the governor over tax cuts and the state’s budget surplus. House Minority Leader Ilana Rubel, D-Boise, said, “One must question whether ‘surplus’ is an appropriate word to use, or whether we should more accurately call it a systematic underfunding of infrastructure, education and other vital needs.”

“Idaho does not have a budget crisis right now,” she said, “but we do have a health care crisis, a housing affordability crisis, a workforce development crisis, an infrastructure crisis and a childcare crisis. I’m very glad to hear the governor plans to restore the held-back funding for our agencies.”

Overall, the governor is proposing a general fund budget that would come to a 3.8% increase over the original appropriation for the current year, to $4.2 billion. He would bolster the state's rainy-day funds, boosting the Budget Stabilization Fund to its maximum legal limit of 15% of general fund revenues.

For K-12 public schools, the governor is proposing a 3.71% increase in the general fund; colleges and universities, 2.65%; community colleges, 5.45%, including a nursing education program expansion; Health & Welfare, 5%; and Corrections, 0.65%, way down from last year's big jump.

The governor is proposing full funding in the state Controller's office budget for a new transparency reporting system on local government spending proposed by a legislative interim committee; along with a new initiative to create a "one-stop shop" through the Controller's office where citizens could access all state agency and commission meetings and minutes.

The governor’s budget proposal includes 2% merit raises for state employees.

“In times of hardship, opportunity for growth emerges,” the governor said. “As Idahoans, we must choose to come out of the pandemic stronger, more resilient, and more united than ever before.”

Little opened his address with a reference to “the dark events at the U.S. Capitol last week.”

“The violent acts of some overshadowed the peaceful acts of many,” he said. “Former President George W. Bush aptly described the events as fitting of a ‘banana republic, not our democratic republic.’ The riots tarnished the shining values America stands for. This is not who we are.

“Hostility and violence are not an expression of your rights," he said. "They are a violation of everyone else’s.”

Betsy Z. Russell is the Boise bureau chief and state capitol reporter for the Idaho Press and Adams Publishing Group. Follow her on Twitter at @BetsyZRussell.

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