As the Capitol Annex building in Boise is being prepared to serve as the Idaho Legislature's home for another year, and the start of the 2009 Legislative session is just eight days away, state lawmakers from Southeast Idaho have one thing on their mind - money.
Nearly every state senator and representative from Districts 28, 29, 30 and 31 identify the state budget and transportation shortfalls as the first and second most important issues respectively for the upcoming session, which starts Jan. 12.
"Everything else pales in comparison," said Rep. James Ruchti, D-Pocatello. "Everything else will probably take a back seat."
Idaho Gov. C.L. "Butch" Otter has already trimmed the 2009 fiscal budget by 4 percent during the past four months through a series of holdbacks. Some lawmakers anticipate another 2-percent cut could be looming on the horizon.
Otter also sought an additional $240 million for the Idaho Department of Transportation's budget a year ago, but sent lawmakers home to think about a resolution after the House and Senate could not agree. The economy a year later is far worse and many legislators are concerned those funds simply aren't available anymore.
Among the looming issues is just how the state should use some $330 million in total budget stabilization funds, also referred to as "rainy day funds," in light of a declining economy. The funds were set aside during years of revenue surpluses to aid the state during poor economic years.
"We have to make sure we are using the rainy day funds smartly," Ruchti said. "The governor is talking about stretching these funds out over three or four years. He wants to make sure we have some if this economy goes on for several years. I want to know why."
Ruchti said the funds are supposed to fill the gap between good economic years and they are meant to be used in a year just like this one. Like many Idaho families are doing, state agencies need to tighten their belts, but the funds must also be used, he said.
"By holding off on spending in years one or two to soften the blow against state agencies, you are only going to exacerbate the problem," Ruchti said. "I think a better approach is to make those funds available in the first two years, but you still have the agencies tighten their belts."
Rep. Ken Andrus, R-Lava Hot Springs, believes it's likely the Legislature will have to dip into the rainy day funds this year, but he's of the mindset that it must be a small percentage if any.
"I think the mentality of the majority of the Legislature is that it is a sacred cow and you don't dip into it unless it's extremely serious," he said. "If the economy continues to get worse, then I think there is a possibility we could use some of that money. But if the economy is not any worse, then I wouldn't think it would be used."
Sen. Steve Bair, R-Blackfoot, sees use of the rainy day funds as something that will have to be considered on a fund-by-fund basis. The stabilization funds are not collected in one account, but broken into backup accounts for several different budget items.
He said one fund that may be dipped into is the $114 million that is set aside for education.
"There are some other budget stabilization funds that could be used as well," Bair said. "But I don't know that this is the right year to do this. I don't know that we are at the bottom of this downturn. We would probably be wise to not spend it all at once and find good ways to trim fat."
Rep. Dennis Lake, R-Blackfoot, isn't advocating to use the rainy day funds to supplement the next two budget years, but that's just what he foresees happening.
"We have already started. We will use about half our rainy day funds during the course of fiscal 2009, which we are in right now," he said. "The next year, we will probably use most of what is left and there will be little left for fiscal 2011."
Because of the holdbacks Otter has already initiated, 2009's use of rainy day funds may not be so dramatic, Lake said, but he still believes revenue shortfalls for the remainder of this year and in fiscal 2010 could absorb much of the $330 million in stabilization funds.
To keep from using those funds, budget cuts across the board with some agencies targeted for deeper cuts could be necessary.
"I will be listening to all the economists this week and we will make some projections of the revenue that will be available," Lake said. "But we are talking about a fiscal year that starts July 1, and we are trying to figure out what our revenues are going to be 18 months out. That's difficult."
Rep. Elaine Smith, D-Pocatello, is also interested in looking at revenue expectations before deciding what kind of budget cuts need to be made for fiscal 2010.
"It will hurt to make any cuts," she said. "But I think they need to be targeted in some way. We need to evaluate each agency and determine which ones are running leaner than the others."
Rep. Donna Boe, D-Pocatello, also favors a more targeted approach to the impending budget cuts.
"The budget cuts are likely to be across the board. That's what the governor has called for," Boe said. "I prefer targeted cuts, but at the same time, I am not sure I want to be the one to decide which to target."
One of her concerns with budget cuts made across the board is further debilitating agencies that are already running too lean, including many that fall under Health and Welfare.
"I have had a lot of letters about services for developmentally disabled," Boe said. "One proposal out there would reduce the number of hours paid by the state for rehabilitation services."
Rep. Jim Marriott, R-Blackfoot, said he too has received the letters of concern regarding potential cuts to Health and Welfare programs. He believes that is the third most important issue the Legislature will deal with during the upcoming session.
"All of the letters I have received claim that those who are benefitting from the programs will regress if they are cut," Marriott said.
Freshman Rep. Marc Gibbs, R-Grace, doesn't believe any agency will be saved from the budget cuts that will be made this session.
"To generate the kind of cuts we are going to have to make this year, all groups are going to have to participate to some degree," he said.
Gibbs may be new to the Legislature but by no means is new to some of the issues. He is a potato seed farmer who spent seven years on the Idaho Department of Fish and Game Commission.
He is the lone legislator from those inquired upon for this story, who did not list the transportation shortfall as the second most important issue. He put it third.
The issue he felt would be second most important in 2009 is water.
"Water is always a significant issue in Idaho," Gibbs said. "How the state is handling water, how they determine where the water goes and how we mitigate the conflict between surface irrigators and pumpers are important issues for the entire state."
When it comes to the transportation shortfall, Gibbs is reluctant to make any certain determinations at this point. Idaho has commissioned a study of its Transportation Department and the state's needs.
Most legislators are waiting for that report, which they expect to be available at some point during the session, to be able to accurately determine the route that must be taken to supplement the department.
Gibbs said he anticipates a use-based fee, such as a gas tax, and increased registration fees will both be looked at.
"We have to decide how we come up with the funding for highway maintenance and keep this resource from deteriorating," he said.
Sen. Diane Bilyeu, D-Pocatello, is on the Senate Transportation Committee. She is hoping for a significant update on the study next week, but anticipates the full report could still be weeks away from completion.
"I'm looking for help from the federal government, but that may not be as simple as it sounds," she said. "Whatever we get from the federal government, we would probably have to match in some way. There will be strings attached."
While many speak about resolving the transportation budget shortfall through raising gas taxes and registration fees, Andrus said another possibility is out there.
"A sales tax percentage has been discussed," he said. " I could be in favor of something like that if it's modest."
The sales-tax approach would tax gas at a percentage rate, which means the total tax collected would increase as gas prices increase. Idaho currently has a 25-cent flat tax rate on each gallon of gas sold.
Ruchti believes the state will probably rely on increases to the two current funding options already available. What is undetermined is just how much to which funding source and how quickly should they should be raised.
"I am hesitant to raise taxes in an economy like this, but something has to be done," he said. "We just have to be careful about how we go about doing it, " Ruchti said.
He also has another major concern when it come to the transportation shortfall.
"What we need to find out is what the real number is," said Ruchti of the speculated $240 million shortfall. "The audit will be completed sometime during the session and we are hoping that will give us a better idea of how large the shortage really is."
Among the third most important issues many of the legislators feel will be addressed during the upcoming session are Fish and Game fees, Health and Welfare programs and education.
Many of the legislators believe education has already been hit hard enough.
"Certainly, taking care of education is important to the state's economy," Bilyeu said. "You have to make sure people can get the education and training needed to find better jobs."
Boe agrees.
"Whether you are talking about K-12, or higher education, cutting more just doesn't seem to be the way to develop the future workforce employers will be looking for," she said.