Legislative budget writers took no action this morning on expanding the Idaho Education Network from high schools to elementary and middle schools next year, or on whether to cover $7.3 million in expected e-rate shortfalls in the coming year, as requested by the state Department of Administration. While setting the department’s budget, JFAC set aside no funds for those items. “That’s just not going to be decided today,” said Senate Finance Chairman Dean Cameron, R-Rupert. “We’re still working on it. We have the Attorney General’s office looking at language.”

Budget writers said while tens of millions in federal e-rate funds are in doubt due to questions over the award of the contract, they can’t vote on expansion. “Until we figure out what’s going on with e-rate, I don’t think we need to go and expand it,” said JFAC Vice-Chair Rep. Darrell Bolz, R-Caldwell. He joined with Reps. Youngblood, Thompson and King in crafting the budget motion, which passed on a 19-0 vote.

The state’s original award of the contract for the statewide broadband network that links every Idaho high school to Education Networks of America and Qwest, now CenturyLink, drew a lawsuit from another, lower bidder, Syringa Networks; the Idaho Supreme Court ruled last March that the lawsuit could proceed on the question of whether the award violated state purchasing laws, and last month, a district court judge also ruled the case can proceed on that question.

Since the Supreme Court ruling, the Federal Communications Commission has been holding up three-quarters of the funding for the IEN, which was supposed to come from e-rate funds generated by a telephone tax, while it investigates whether the contract award was improper. That prompted the Department of Administration to request $14.45 million in state funds to make up for the lost e-rate funds; JFAC approved only the $6.6 million for this year’s portion of that, and still hasn’t decided about next year.

If the feds conclude the contract award was improper, the state might have to pay back another $13 million in e-rate funds paid to ENA prior to the Supreme Court decision as well.