Otter: Schools top priority, even before tax cuts

BOISE- Education is the top priority for Idaho for the coming year, Gov. Butch Otter declared Monday, coming even ahead of tax cuts for businesses and top earners. “While I appreciate your support for the tax relief we’ve been able to provide these past two years, and while I would love to see a third year,” Otter told a joint session of the Legislature in his State of the State message, “it’s also my view that any effort to provide additional tax relief for our citizens must be in the context of advancing our goals for Idaho’s education system.” What that means: Otter has set aside $30 million in his budget proposal for some form of tax relief. But he’s done so with a caveat: That his education improvement proposals must come first. Those include $54.7 million toward carrying out some of the recommendations of a task force of education stakeholders that Otter convened, in the wake of voters’ rejection last year of the “Students Come First” school reform laws. Otter’s proposing putting $35 million toward restoring the $82 million-plus in annual operational funding cut from Idaho schools during the economic downturn, plus funding for technology, professional development for teachers and more. But he’s not proposing any raises for teachers – a key centerpiece of the task force’s plan – nor is he proposing funding raises for any of Idaho’s state employees, despite a new state report showing state employee pay has fallen to 19 percent below market rates. State schools Superintendent Tom Luna, a fellow Republican, criticized Otter’s proposed budget as a $21 million cut in teacher pay. That’s because this year’s budget includes $21 million in one-time bonuses for teachers that aren’t repeated next year, and aren’t replaced with anything else. “The governor’s budget proposes reducing overall teacher compensation in order to help schools pay the light bill. I cannot support that,” Luna said. “I believe we have the funding and the plan to accomplish both, and I will fight to ensure we continue to improve teacher compensation this year and in the future.” Rep. Luke Malek, R-Coeur d’Alene, said, “It sounds like it’s something we definitely need to look at.” The task force proposed major boosts to teacher pay, but those would come as part of a new teacher career ladder and tiered licensing structure that’s not yet been developed. House Minority Leader John Rusche, D-Lewiston, said, “I guess the employees and the teacher salaries are lower on the priority scale, because they didn’t get anything.” If the education proposals are funded, Otter offered lawmakers some examples of tax cuts he’d consider: Further trimming Idaho’s top individual and corporate income tax rates, and increasing the personal property tax exemption for business equipment, enacted last year, from $100,000 to $250,000. Overall, Otter proposed a $2.885 billion budget for next year in state general funds, a 3.7 percent increase from the current year’s $2.781 billion. But that includes a number of one-time expenditures, including deposits into rainy-day funds. Under the governor’s proposal, public schools would see a 2.9 percent increase in general funds, 2.4 percent in total funds. The entire budget in total funds reflects a 2.5 percent increase. “I’m sure some will argue that the proposals I’m putting forward today are not bold enough, not front-loaded enough or simply not enough,” Otter told lawmakers. But he said his proposals are “conservative, sustainable policies.” Rep. Kathy Sims, R-Coeur d’Alene, said she won’t be convinced until she sees the details. “I’m just going to add it up and see how much we’re really growing government,” she said. Otter drew applause from the chamber when he announced that he won’t back expanding the state’s Medicaid program in the coming year – at least not until the state knows much more about what it would get. Rep. Ron Mendive, R-Coeur d’Alene, said he was “real relieved.” He said, “I wasn’t ready to go there either.” Sen. Shawn Keough, R-Sandpoint, cautioned that people in her district don’t want to see property tax increases – and that’s the source that funds the state’s current program for people who can’t pay their catastrophic medical bills. “To the degree that Medicaid could address that, I think people want us to take a look at it,” she said.