Idaho Budget Expert Outlines Tough Choices Ahead for Legislators

Cathy Holland-Smith

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Idaho’s legislative budget expert expects the state to end the fiscal year with $77 million in the bank.  That’s if current projections hold.

Cathy Holland-Smith manages the Budget and Policy Analysis Division at the Legislative Services Office.  She unveiled budget projections to a group of lawmakers and Idaho business leaders at the Associated Taxpayers of Idaho conference this week.

Holland-Smith reminded the audience she’s not an economist, but she’s an accountant.  And any policy decisions are up to the lawmakers.  Still, Holland-Smith said based on the numbers and projections from the Idaho Division of Financial Management, the legislature will have to take a hard look at spending more money on education and healthcare.  “Whether or not you can really keep the spending down to the levels we reached in 2010, I don’t believe that we can,” Holland-Smith says.  “Health care and education are the two areas we have the most pressure to fund.  It’s hard to believe those pressure’s won’t return.”

Holland-Smith says the state’s current financial picture looks much better than it has in previous years, the last three of which have seen revenue shortfalls.  The AP reports Idaho will begin restocking reserves drained from about $400 million back at the start of the recession in fiscal year 2009.

Holland-Smith says state agencies are asking for money above their existing budgets.  But, she says, not everyone will get what they ask for.  Agencies have requested almost $143 million in supplemental funding:

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Holland-Smith says the legislature will have some tough policy questions ahead of them this session.  In addition to increasing funding for education and health and human services, she says lawmakers need to consider pay raises for public employees, who haven’t seen a positive change in their paychecks since 2008.  She addressed the desire of some lawmakers to spur business growth through tax incentive programs.  Holland-Smith says there will always be an interest in using incentives for growth.  “But, that does take away money from the revenue stream, typically,” she says, “the challenge will be, what can you afford?”