Rep. Bell: Idaho’s Budget Woes And The Push To Repeal The Personal Property Tax Are A “Perfect Storm”

Idaho State Legislature

Representative Maxine Bell (R-Jerome) has served on the Legislature's Joint Finance-Appropriations Committee since the early 1990s.

Rep. Maxine Bell, a retired school librarian from Jerome, was first elected to the Idaho Legislature in 1988.  She’s the longtime co-chair of the Joint Finance-Appropriations Committee, which crafts the annual state budget.  We spoke December 10.

Q: It seems clear that the personal property tax is going to be one of the defining issues this year.  Do you think that’s right?

A: I can’t think that it cannot be.  This is a perfect storm, as far as I’m concerned.  There was a little tax relief last year.  But this is a bigger issue than that.

I’ve not seen anything come out of Rev and Tax that was affordable at this point, but it’s the right thing to do.  And frankly I don’t know how to do it, with the other issues that are facing us.  I’m hoping that people who can figure this out come forth with something that we can all work with. 

Q: You say it’s a “perfect storm.”  Usually the connotation of a “perfect storm” is that it’s a negative thing, but it sounds like you do think this is necessary tax relief.

A: I do think it’s necessary, but the negative part of it is the fact that our economy is still struggling. Jeff Sayer with the Department of Commerce is doing masterful work, but he needs some back-up from us. We’ve not been doing that.  We’ve been allowing our infrastructure to just simply skate along, and you can’t continue to do that.  We expect high efficiency from employees who perhaps the systems have not been taking care of, and that concerns me.

I think there are some expectations from many of the agencies that should things look better there will be some backfill.  And I’m sorry about that.  I don’t think we can go back and try to redo or undo whatever it was we had to do.  But I’m not sure we can continue to fund the core responsibilities of government at the rate we’re doing it right now.

Q: Do you think there needs to be more money going to state agencies?  I think what I hear you saying is that we need to allocate more funding to things that have been neglected since the recession hit.

A: I think we need to buoy up the infrastructure if there are places where it will affect the efficiency of state government, and that does not mean new services or extended services or enlarged services.  It just means the proper resources for those services that are statutory.

Q: And you also think there needs to be increased funding for the Department of Commerce.

A: They’re working so hard.  The key is to bring good clean industry in, and put people to work, and we’ve not helped them in any way.  They’ve pretty much been on their own.  I know they’re going to assume that they need a little bit in some kind of a fund to help them with that.  That’s a line item, at this point, and this is not a budget, that I can see, that can handle any line items at all, and I think that’s an important line item.

I don’t think there’s enough new money, so you’re going to have to shift from something you’re doing to do something different.  The prison system comes to mind.  It’s not good management to have to send people out of state.  It’s more expensive.  You get less for the money, and it’s just not good management.  So there’s an issue that I think will be coming forth, also.

At this point, I don’t see any way that there can be any budget enlargement with two exceptions.  There’s growth in Medicaid and there’s growth in education, and there’s growth in the prison population.  And those are the first things we look at, to fund that growth.  I can tell you right now that you’re talking 3 percent just funding growth.  So beyond that, in order to put any line items to put anything else, I think it looks dreary.  I truly do.  I hope I’m wrong.

Q: You’re saying that all of those things are in your mind when you’re looking at the personal property tax, and you’re wondering, “How does this all add up?”

A: That’s exactly what I’m saying.  That’s why I say it’s a perfect storm, because obviously that’s an unfair tax.  It’s a difficult tax to administer.  We should not be funding government on an unfair tax. I’m grateful for those who are going to go to work and try to come up with some sort of solution to that, and I’ll just simply have to remain hopeful that people get back to work continually.  But it’s going to be slow.  It’s not going to be overnight, and it’s not going to be, perhaps, for this budget cycle.

Q: One of the key issues around the personal property tax is this issue of replacement dollars – whether the state would make sure that local taxing districts get some of that money back.  It sounds like the way you’re talking about it is predicated on the assumption that, yes, you would want to see local taxing districts get some of that money.  Is that right?

A: That’s exactly right, because if you just assume that you’ll let some other unit of government suffer from your activity and let them worry and put an unfunded mandate on them… There are school districts involved.  There’s county and city government.  I’ve just not heard a solution, yet, that would not mean we were a partner in a backfill of some type.  I’m not going to sit by and fund state government how I want to while somebody else figures that one out.

Q: One of the big things facing lawmakers is what to do in the wake of the Props 1, 2 and 3 votes.  A big question that’s being asked is whether the state is meeting its constitutional requirements with respect to education funding.  Do you think the state is meeting its responsibilities?

A: I thought that was far-reaching.  That was Mike Ferguson that popped out with that, and I look at that and think, “I don’t think so.”  In looking at the funding that has grown and grown and grown over the years that I’ve been there, I think that’s really going a little far.

The portion of the funding is a little less than it was some years ago, but the pool of funding that it comes from is several times as big.  So I would much rather have 48 percent of what we have now to fund with than 50 percent of what we had when I came in the legislature.  I was surprised at his statement.  I don’t think you can say that the effort was not there.

Q: I wasn’t asking the question based solely on Mike Ferguson’s analysis.  A lawsuit was filed not long ago contending that the state is not meeting its constitutional requirements.  That suit began with the issue of schools charging fees for certain classes.  It’s not only Mike Ferguson who is talking about this.

A: I agree with you.  Mike was the one who made the paper here, and it kind of surprised me, because, having worked with him, he knew what the budget was and he knew our efforts all along.  So we’ll just have to wait that one out and see where it goes.

Q: Do you expect to see parts of the Students Come First laws resurrected, and do you have a sense of what aspects of the laws have the most traction?

A: You know, I don’t, but that that is policy, and as a funding person, I am very willing to allow those people — those 33 people that the governor is putting on that committee — to go ahead and work that through.

At this point, my goal is to make sure that the funding is put back in this year’s budget.  We will take care of that as soon as we get back.  Because once those props went down, the funding didn’t match.

It’s about $34.5 million.  There was $34.5 million that would have been in the technology area.  And it needs to go back. That funding simply needs to go back.  If not, the schools will be a little over 2 percent down on this year’s funding, and that’s not our intention at all.  That’s no one’s intention.  I have not seen the draft, but they’re drafting right now

Q: You say this is something you’re planning to deal with as soon as the session gets underway, is that correct?

A: Yes, definitely.  That’s just kind of a no-brainer.  That’s clean-up, is all it is.

Q: Other things that we know will be big issues, even before the session begins, are the health insurance exchange and the Medicaid expansion.

A: I have always been in favor of a state-based exchange for the simple reason that I want to keep state primacy any place I can.  I think it’s a smarter thing to do.  Actually, it doesn’t seem to me to be that difficult, but those who are against it are truly against it.  I don’t know where that will go or how that will go.

Q: How about the Medicaid expansion?

A: I think that’s one of our most difficult issues.  It would be a good thing in many ways, but I am so fearful.  I’ve seen so many times when we got something from the federal government and we wound up putting it in place, there were all of the costs of putting it in place, and then we had to fund it.  We’d call it a fund-shift.

I just cannot think that the federal government, once they start to step that match rate down, why that would be a good thing for us to be involved in. And yet, how could you not think of that as a gift, with all of the people that could use that?

I think that’s much more difficult than the health exchange.  I think the exchange has been a lot of noise and fire, whereas this is one is serious, serious.  Taking something now that is not sustainable.

Q: Do you want to say what you believe the Legislature will decide?

A: I guess my feeling tells me we won’t, because of those who are so against big government, anti-federal government.  But that’s just a very personal feeling on my part.

I’m going to leave that to the policy people.  If the policy people can justify the long-term savings, and justify hooking on with the federal government, who has not been a very trustworthy partner, then that’s their decision.  I’ll support them with the funding however they choose.

Q: You have said you don’t view yourself as a policy person; you view yourself as a budget person.  But are there things that are your priorities for the session?

A: Obviously, I would love to see us get structurally balanced, so that we’re not spending more than we’re taking in, as we are now.  I would like to see us fix some places in the budget where we’ve had to put one-time money into ongoing expenses and hope for  a better year a couple of years in a row.  Those are my thoughts.  And then I will leave the policy on these big issues up to those who are working on them.

The minute you spend a dime you make policy.  But we have no business running ahead and spending money until it is policy from the germane committees.

This interview has been edited and shortened.