AdWatch: Idaho governor candidate makes big promise to cut ‘wasteful’ state budget

BOISE – Tommy Ahlquist, one of the GOP candidates for governor of Idaho in 2018, launched a new TV ad on Wednesday promising to cut $100 million from the state budget in his first 100 days in office.

Ahlquist’s ad says he’ll “cut $100 million dollars in wasteful government spending,” but offers no details.

“Where is that going to come from?” said Jaclyn Kettler, a Boise State University political scientist, citing her initial reaction to the claim.

She noted that the majority of Idaho’s state budget goes to education, and BSU’s annual public policy surveys long have shown strong citizen support in Idaho for more funding for education, not less. “I don’t know how you propose to cut that much money and not look at education,” she said. “In the Idaho budget, there’s just not necessarily a lot of fluff.”

Pressed for specifics on his proposed cuts during an interview this week, Ahlquist offered three: shifting the state employee health insurance plan to self-funding, consolidating and competitively bidding all state broadband services and pressing for more competition to find savings on state infrastructure investments.

“We have 11 months to go before the election, we’re early,” Ahlquist said. “I’ve got big buckets I’m studying like crazy, I’ve got data and reports I’m looking through. I will have specifics very soon.”

Of the three items he named, the first – self-funding state employee insurance – already has been under study by the state for several years. A legislative interim committee on state employee benefits is looking favorably at the idea and is in the process of bringing on a consultant.

According to an actuarial report prepared for the state by Milliman, the state’s actuarial consultant, the change could save the state $60.6 million over the first three years, and then $16 million annually thereafter.

Most states already self-fund their state employee insurance plans, as do most large employers in Idaho. Idaho’s current system is a hybrid that gives it some of the benefits of self-funding but also employs Blue Cross of Idaho to administer and process claims.

“I’m a physician,” Ahlquist said. “I’ve been around health care my whole life. The state of Idaho has all these employees. There is a better way to maximize how we cover their health insurance in the state of Idaho to save a bunch of money. I’m studying it like crazy right now … but I’m telling you there is a better way, through self-insurance.”

His other two proposals, which both have little detail, are less clear in proposing savings.

On broadband services, Ahlquist said, “Right now each state department does their own thing. … Let’s pull all this together, let’s competitively bid that – let’s save a lot of money.”

Idaho’s Department of Administration already oversees a competitively bid contract for broadband services for 21 state agencies through its Office of the Chief Information Officer.

Previously, Idaho had a larger contract that also tried to provide broadband services to all Idaho school districts, but the Idaho Education Network collapsed amid cost overruns, legal problems and political questions.

The project, pushed by former state schools Superintendent Tom Luna and current Gov. Butch Otter, was abandoned after a court declared the multimillion-dollar contract illegal.

Idaho already has competitive bid requirements for infrastructure programs, from highway construction to buildings.

“This is my business,” said Ahlquist, who is a developer as well as a physician. “We’ve invested $331 million in the state of Idaho. All of that has been with competitive bids and grinding of budgets and pro-formas, where we make things happen. We can do exactly that same thing with tax dollars.”

“With a $3.5 billion budget … we can’t find $100 million?” he added.

Asked why he chose the $100 million and 100-day figures, Ahlquist said, “It probably should be more than that, but I think $100 million is a good place to start.” And as for the time frame, he said, “I just want people to know that I’m serious about it – it’s not just talk.”

His campaign later clarified that Ahlquist wouldn’t necessarily propose $100 million in midyear holdbacks in his first three months in office. Idaho’s state budget year starts July 1, and the governor typically proposes a budget to lawmakers in January, for approval during the legislative session, to take effect on July 1. That would be the time frame for Ahlquist’s proposed cuts, his campaign said, though senior adviser Todd Cranney said in an email that Alquist would also look for savings outside the budget process.

Midyear budget holdbacks typically are imposed only in times of severe fiscal crisis, as they ask agencies that already have been ordered to provide services at a certain level to stop halfway through the year.

“There’s a process you have to go through. … Spending is determined by the Legislature,” said Idaho Lt. Gov. Brad Little, who is among those Ahlquist will face in the GOP primary election for governor in May 2018.

Little said there are numerous issues the state is facing now in health care, including self-funding the state employee insurance plan. “Given the size of the state of Idaho, there’s a reason that we continue to look at that as an option,” he said. But he noted that the U.S. Senate is about to vote on a health care reform bill, and the state may have new options shortly.

“And if Congress is not going to act, then we need to do something at the state level, and taking into account what we do with state employees might be part of that – that might be one of the factors,” he said.

Little also noted that Idaho made big budget cuts during the recession. “But we did it as a partnership between the executive branch and the legislative branch,” he said.

China Gum, campaign manager for Raul Labrador, the third major GOP candidate in the 2018 governor’s race, said the Labrador campaign had no comment.