Idaho to take time to study stimulus funds

BOISE – Gov. Butch Otter said Tuesday he’ll take until at least late March to study how Idaho should use its share of the $787 billion federal stimulus plan, delaying state lawmakers as they try to write the 2010 budget.

Budget setting, originally scheduled to start Monday, will be pushed back, perhaps prolonging the 2009 legislative session.

Otter is giving state agencies until March 4 to tell him how they’d use Idaho’s estimated $600 million to $1 billion share. Once those plans are in, Otter says a “stimulus executive committee” he will name will evaluate the submissions until March 19 and make recommendations for using money to help balance Idaho’s budget for fiscal year 2010, which starts July 1.

The federal stimulus bill, signed by President Barack Obama on Tuesday, gives governors 45 days to request money for state projects.

“There remains a lot of unknowns here,” Otter said in a statement.

“It will take a lot of work to get our arms around all the implications of this law.”

In his executive order, Otter said that priority would be given to federal money allocated for one-time projects or reducing the need for state spending in the next few years.

Wayne Hammon, Otter’s budget chief, and David Hensley, his legal counsel, will be on the committee. Others weren’t named.

After meeting with the Republican governor Tuesday, legislative leaders said that regardless of how the state uses its share, they tentatively plan to stick with the 6 percent spending cut already ordered by Otter for the current fiscal year.

“There is a perception that this is going to balance our budget,” Sen. Dean Cameron, R-Rupert and co-chairman of the Joint Finance-Appropriation Committee, said of the stimulus package’s effect. “It’s not.”

According to numbers from the research group Federal Funds Information for States, a service of the National Governors Association and the National Conference of State Legislatures, Idaho’s share could include nearly $220 million for highways, bridges, public transit, clean water and other infrastructure projects and some $300 million for Medicaid.

Still, proposed cuts in 2009 and 2010 to state- and federal-funded Medicaid health insurance programs for Idaho’s poor due to a tax revenue shortfall will likely not be restored to previous levels, even with the new federal money, said Cameron and Rep. Maxine Bell, the committee’s co-chairwoman.

Instead, she and Cameron said Idaho would likely use the stimulus package’s higher federal match to state Medicaid spending to shift money to state agencies that don’t stand to directly benefit from the federal aid, including to soften the impact of proposed 5 percent personnel cost reductions in fiscal year 2010 at all agencies.

Cameron also said public education’s share of the money may be short of the $346 million estimated by Superintendent of Public Instruction Tom Luna. That means that while Idaho likely won’t have to use about $80 million of its public education reserve account for the current fiscal year, money for education will still be tight in fiscal year 2010.

“I can’t stand here and honestly say public education will be held harmless,” Cameron said.

Melissa McGrath, a spokeswoman for Luna, said her office is sticking by its estimate, but conceded numbers may change as more details emerge.

Senate Minority Leader Kate Kelly, D-Boise, said Democrats met with Otter Tuesday and support his plan to assess how – and how much – to use federal stimulus money.

“I think there needs to be a deliberative process,” Kelly said, adding that it’s too early to say what the effect of the stimulus will be on Idaho’s budget.

Department of Health and Welfare spokesman Tom Shanahan said that agency also is reviewing how the plan could affect Medicaid.

All four members of Idaho’s congressional delegation voted against the stimulus package, saying it expanded the U.S. debt without having long-term stimulative effect. On Tuesday, U.S. Sen. Mike Crapo, R-Idaho, urged state lawmakers to use caution with their share.

“I encourage you, as you deal with this largesse that’s going to be coming your way, that you pay very close attention to what it will do with your base … budget.”

On Tuesday, the White House estimated up to 18,000 new jobs could be created in Idaho through the stimulus package.