With Idaho’s expected surplus, Gov. Brad Little’s budget is a solid fiscal agenda for Idaho
We’re sitting on a surplus of more than $1.6 billion, enough to do some special, long-needed projects that will benefit the state for decades to come, writes guest columnist Stephen Hartgen.
The Joint Finance-Appropriations Committee room at the Idaho State Capitol building on March 23, 2021. The powerful committee is responsible for setting the state’s budget. (Otto Kitsinger for Idaho Capital Sun)
Gov. Brad Little showed more pages of his upcoming proposed budget when he met with several hundred attendees at the annual Idaho taxpayer’s conference in Boise earlier this month. The governor, who has hinted about various items previously, took the opportunity to lay out his thinking in more detail.
The state is in good shape financially. We’re sitting on a surplus of more than $1.6 billion, enough to do some special, long-needed projects that will benefit the state for decades to come.
These include transportation projects such as roads and bridges, improvements in municipal water plants and waste disposal facilities, and the beginning of the statewide network of broadband access. This last item is particularly important in smaller rural communities which do not have the populations to support private expanded service. Yet we all know that in the information age, access is a critical frontline component.
The governor also highlighted the needs in education, including school facilities and holding onto staff. We must keep our wages competitive in this critical sector. If we want a better workforce, we must train it and that means investment.
He also outlined a plan to help businesses immediately by changes in the withholding tax for unemployment reserves. This fund fluctuates with the economy, and Little’s idea is to stabilize it at about $60 million, thereby giving businesses surety and consistency year by year.
He all but demanded the Legislature find and approve a fix for soaring property taxes, and he urged yet another reduction in income tax rates and perhaps a rebate from taxes paid in 2021. Just this month, one member of the House leadership team said officials were thinking of a tax cut of about $200 million, and another $200 million in rebates.
Idaho leads the nation in reducing taxes, but has done so incrementally, which is both prudent and cautious. Nonetheless, another step-down in income tax rates seems likely. What better use of a surplus than to return some of it to those who paid it?
Hard rightists will want to reduce this immediately to zero, as they don’t want to pay for anything. It’s part of their distorted libertarian philosophy that others should pay for all things governmental. Liberals will argue that the state should maintain its current tax levels, but it’s obvious from the size of the surplus, there’s room to cut taxes and accomplish other goals as well.
So on the one side, we see hard rightists argue for smaller government, for starving basic services such as public education. On the other side, we see liberals call for more social spending as well as for huge bumps in teacher salaries. Neither of these extremist positions are likely to prevail, and Little knows that a more nuanced middle ground will attract the broadest support.
There will be some disputed aspects of whatever Little sets out. Democrats and their media friends and social service advocates will all push to put more money into a long list of programs. Hard rightists will argue that Idaho should not take any federal money and should essentially squeeze state and government back to some unstated, but smaller, point of time.
These views on the right and left will get respectful listeners, but Idaho has been well served by a more moderate, centrist approach on fiscal matters. They’ll tuck some money into reserve accounts, cover the state’s basic needs, perhaps start a few new initiatives, and then head home by mid-March. That’s when filings for the May 17 primary are due and those who will run again will be itching for face time and shaking hands with local constituents.
The governor’s budget this year might be termed a MapQuest outline. He showed where he wanted to go, and gave some initial ideas about what route to take to get there. That’s what we expect our state leadership to do: take on major issues and keep us on the overall track.
Little also urged legislators to find a solution to skyrocketing property taxes. There’ve been several attempts in recent years to balance these taxes in a better way, helping those who need it and not overdoing taxes in any one sector. Last year’s efforts were only a partial solution and left important pieces out. The governor is right when he calls on legislators to fix these issues promptly and fairly.
Idaho has a long tradition of centrist/conservative government in which we fund our needs, tuck money away and look at bigger projects as we can afford them. This approach of prudence and caution has given us one of the best economic profiles in the nation, recently upgraded to AAA credit rating. We should stick with these time-proven principles.
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