Most of Gov. Little’s budgets passed. How did Idaho spend its $1.9 billion surplus?
Less than a year after the Idaho Legislature slashed public education funding amid rigid debates about “indoctrination,” lawmakers passed school budgets, and most other appropriations, with little controversy.
The conservative Legislature approved most of Republican Gov. Brad Little’s budget proposals. That included significant spending on education and infrastructure along with the largest tax cut in Idaho history — all backed by a massive tax revenue surplus on top of unspent federal pandemic relief funds. The state will also set aside nearly $250 million in rainy day funds.
“In all my years, I have never seen a more successful legislative session that produced so many positive results for the people we serve,” Little said in a news release.
The session began with a projected $1.9 billion surplus, buoyed by population growth and an influx of federal COVID-19 stimulus money that led to increased consumer spending. Three of the state’s major revenue streams — individual income taxes, sales taxes and corporate income taxes — together grew by 24% last fiscal year. Little recommended allocating most of the surplus money.
In the months before the session, Little met with lawmakers to develop core spending proposals, said Alex Adams, the governor’s budget chief.
“You never know what to expect in the legislative session,” Adams told the Idaho Statesman by phone. “But I think the front-end work that the governor did this year helped ensure success.”
Key to the budget strategy was “carefully” using the surplus and federal funds primarily for one-time expenses, rather than increasing ongoing spending, said Rep. Rick Youngblood, R-Nampa, co-chairman of the budget-setting Joint Finance-Appropriations Committee (JFAC).
“We extended the largest amount of funds that I’ve had the pleasure of working with in the last 10 years,” Youngblood told the Statesman by phone. “In the end, we got a lot of great things … accomplished for funding, and we still left a good bottom line going forward. And Idaho continues to grow.”
Legislature approves transportation investments
Among the budgets passed is an injection of hundreds of millions into an aging road and bridge system, both at the state and local level. In total, $500 million will go to roads and bridges next fiscal year, which begins July 1. About $35 million will fund infrastructure improvements for airports, railroads, pedestrian walkways and the Port of Lewiston.
Nearly one-third of Idaho’s 4,500 bridges are at least 50 years old. The Legislature cleared a $200 million one-time expenditure to repair or replace bridges overseen by local jurisdictions that are in the poorest shape. The funding is expected to address a third of deficient bridges.
Another $200 million will go toward long-term bridge maintenance. The ongoing general fund money will be split 60-40 between the state and local governments.
In addition to the governor’s road and bridge recommendations, the Legislature allocated another $100 million to reduce the amount of funding needed for projects that the Idaho Transportation Department bonded this year.
“I think there’s a broad recognition at the Legislature that there’s more that needs to be done for our roads, especially with all of the additional Idahoans who have moved here,” Adams told the Statesman.
Adams said some of the road and bridge repair projects could start as soon as this fall.
Education also saw lofty gains this session. Last year’s more than $2 million cut to universities remained, but overall education spending increased 12.5%.
That included about a $104 million infusion into the teacher career ladder, $1,000 bonuses for all school staff — the governor recommended bonuses for teachers only — and nearly $50 million for literacy programs, which could be used by school districts to provide full-day kindergarten.
While Democrats supported the education boosts, they said it wasn’t enough.
“Even though we were capable of passing budgets, it was extraordinarily stingy,” Senate Minority Leader Michelle Stennett, D-Ketchum, told reporters Monday. “We still are under-funding our public education system. That didn’t improve, though we didn’t blow up the budgets this time. But it still is at a deficit.”
ARPA funds remain controversial
The Legislature rejected or reduced a few of the governor’s budget proposals. Lawmakers declined a request for $6.8 million for Idaho State Police to buy a new helicopter and $10 million for a dormitory to house trainees in the Idaho Peace Officer Standards and Training Program.
Lawmakers also trimmed $10 million from the governor’s $90 million recommendations on water quality projects and cut $70 million from Little’s $150 million request to bolster fire suppression funds.
The governor also recommended a $225 million investment of federal funds to upgrade broadband infrastructure over the next five years. Lawmakers approved $50 million, while they await a strategic plan from the Idaho Broadband Advisory Board.
The federal funds can be used through 2026, and once the strategic plan is public, additional broadband funds likely will be “more warmly embraced,” Adams said.
Heading into the session, Idaho had allocated just $50 million of the $1.1 billion in coronavirus relief funds from the American Rescue Plan Act. Officials said they wanted to wait for more guidance from the federal government before committing the funds.
Now, about 99% has been allocated or obligated in the coming years.
“The spending will obviously go up now,” Adams said.
Much of the ARPA money, along with additional federal funds from last year’s Infrastructure Investment and Jobs Act, will go toward natural resource maintenance. About $850 million, with some general fund money but mostly federal funds, will improve water quantity and quality through recharge, cleanup and other projects.
Some lawmakers outright rejected federal funding. Rep. Ron Nate, R-Rexburg, and others, said ARPA money is “borrowed from our grandchildren.” Rep. Karey Hanks, R-St. Anthony, said during a House floor debate that she would not vote for a bill that included ARPA money.
Youngblood said if Idaho returned the money to the federal government, it would be sent to another state, not trimmed from the federal deficit.
“I would rather have my grandkids paying for one-time improvements to our home state than sending it to California and having my grandkids pay for funds to California,” he said.
This story was originally published April 4, 2022 at 12:57 PM.
