When Gov. Butch Otter announced May 1 that he'd accomplished his aim of growing Idaho's economic output to $60 billion before he left office, he saw that it was good.
"Almost five years ago, we established a specific benchmark for creating jobs and growing the state's economy and I'm thrilled that we've achieved that goal despite weathering some of the toughest economic times in memory," the two-term governor said.
Left unsaid by Otter is the depressing reality that Idaho's economy didn't grow at all in his first six years in office. In fact, from calendar 2007 to calendar 2012, the state's annual economic output fell from $51.4 billion to $51 billion in 2005 inflation-adjusted dollars.
Only in 2014 is the inflation-adjusted economy forecast to show real growth. The numbers are bleaker still when accounting for both inflation and population increase. Idaho's gross state product per capita of $34,180 in late 2007 is projected to fall to $32,251 by the end of 2014, a decline of 5.6 percent.
"We, collectively, are worse off than when Otter took office," said Boise State University economist Don Holley. "The same can be said for most every state except North Dakota."
Though he mentioned a jobs goal, Otter never set a specific target, said Idaho Commerce Director Jeff Sayer.
"Creating new jobs is obviously an important outcome that occurs in a growing economy," Sayer said. "Project 60 encompassed that objective as part of the overall target."
The governor's statement on reaching $60 billion in the fourth quarter of 2013 prompted accusations of creative accounting.
To understand the controversy, it's necessary to grasp the distinction between what economists call "current" dollars and "real" dollars.
Current dollars represent value at the time and are unadjusted for inflationary price increases. Real dollars are adjusted for inflation, reflecting actual buying power.
The inflation-adjusted statistics in this story are pegged to 2005, the U.S. government benchmark. For clarity, this story will use "unadjusted" and "inflation-adjusted."
Two other terms: Gross state or gross domestic product measure the entire economic output - all the goods and services produced - in a state's or nation's economy.
Otter's May 1 statement - coming 19 days before the primary election - was immediately blasted by his principal challenger, Sen. Russ Fulcher, who unleashed a string of economic expletives, including "cooked the books," "phony numbers," "changed yardsticks" and "trumped-up figures."
"Instead of acknowledging the lower growth - and the failure to get Idaho's economy off the ground - Otter just counted the higher-priced goods of today, making it look like the economy grew," Fulcher said.
Otter's case was harmed by a significant error that Sayer calls an "inadvertent oversight." Otter low-balled the base year, saying the state's gross domestic product was $51.5 billion when he took office in 2007. That made growth during his terms seem more impressive.
The correct figure for unadjusted state GDP for 2007 is $54.3 billion, according to what Sayer acknowledges as the "gold standard" of economic statistics, the U.S. Department of Commerce's Bureau of Economic Analysis.
Otter says the economy grew to an unadjusted $60.6 billion in the fourth quarter of 2013, an estimate provided by state economist Derek Santos, based on research by IHS Economics, a private forecasting firm. New BEA figures for states are due in June.
Otter declined comment, designating Sayer to take questions.
Sayer acknowledged that the 2007 base should have been $54.3 billion - not $51.5 billion - if the governor was going to say "mission accomplished" when the unadjusted gross state product hit $60 billion.
"We didn't catch it in the flurry of getting ready for that day," Sayer said. "It just slipped through the cracks. We've never used apples and oranges."
Otter never planned to adjust for inflation with Project 60, although economists agree inflation-adjusted numbers demonstrate real growth. "It was the intent of the governor all along to measure the gross GDP," Sayer said.
That's not a good gauge of whether Idahoans are better off, said BSU's Holley. "If the intent is to show an increase in economic activity and well-being, the appropriate measure" is the inflation-adjusted figure, Holley said.
Said Sayer: "We can split hairs on what 'growth' means. I would argue that we have seen growth and we have achieved Project 60. But have we reached that threshold without challenges? No.
"That's the key statement: We're at this threshold, but we know we still have challenges we need to address. We need to strengthen the growth of our economic activity and we also need to increase the income levels of our citizens."
Idaho's per capita income ranks 49th among the states, ahead of only Mississippi. When Otter took office, Idaho ranked 43rd.
Sayer said Otter pulled the trigger on the announcement before federal figures for 2013 become available next month because he wanted to couple the celebration of reaching $60 billion with his announcement of a new economic plan, Accelerate Idaho.
Accelerate Idaho, which immediately supplanted the old Project 60 website, is a three-prong strategy: helping train workers for better jobs; boosting industry; and strengthening communities, including infrastructure.
"We've been watching this for several months to see if we are going to cross the $60 billion," Sayer said. "When we saw those forecasts we felt like we were in good shape to make that declaration. We didn't want to announce crossing the threshold until we had a plan for the next level."
Sayer said the May 20 primary did not drive the timing. "I would say it's fortuitous for the governor's sake - and I say that with a smile, by the way," he said.
A TELLING QUESTION
When Otter stands before the cameras in his ceremonial office, behind him hangs a portrait of one of his heroes, President Ronald Reagan. Like Otter in his new TV ads, Reagan wears cowboy garb.
Reagan got to the White House in significant part because of a sluggish U.S. economy. In a 1980 debate with President Jimmy Carter, Reagan asked a famously devastating question: "Are you better off now than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago?"
When Otter took office in January 2007, Idaho unemployment was 2.7 percent. After peaking at 8.8 percent in the summer and autumn of 2010, the figure was down to 5.1 percent in March.
Fulcher and Otter will appear Wednesday in the lone TV debate that Otter agreed to attend. Don't be surprised if Fulcher reprises Reagan.
"You might hear something similar to that," Fulcher said. "We have a lot of messaging to do and it's only fair to ask that question."
Another BSU economist, Michail Fragkias, said comparing how various states have fared can be telling. Between 2006 and 2012, inflation-adjusted U.S. GDP rose 0.71 percent. Idaho ranked No. 33 nationally, with 0.5 percent growth. Among surrounding states, only Nevada fared worse, at minus 0.85 percent. Both Idaho and Nevada were hard-hit by the burst real estate bubble.
But judging how Otter's policies affected Idaho's performance "is a much bigger question that requires further study," Fragkias said.
After a recession that spread across the U.S. and the world, the question of blaming governors and presidents is wrongly put, said BSU's Holley.
"Neither President Obama nor Gov. Otter control the economy," Holley said. "They can take steps to alleviate the impact of a recession, but they, like us, are at the mercy of market events that cause recessions."
Appealing to voters, Republicans blame Democrats in power and vice versa, and challengers blame incumbents.
"In both cases it may be good politics, but it is bad economics," Holley said.
Dan Popkey: 377-6438, Twitter: @IDS_politics