The amount of money in Idaho’s rainy-day fund that serves as a cushion against a potential economic downturn would increase under proposed legislation put forward Friday.
The Legislature’s powerful budget-setting committee followed Republican Gov. Brad Little’s recommendation and voted for the House to hear the bill that would increase the Budget Stabilization Fund to 15% of general fund revenues.
The fund is currently capped at 10%. State officials say the change plus deposits would get the fund to more than $600 million by next year.
“At some point, we will have another recession,” said Republican Sen. Scott Grow.
Democratic Rep. Melissa Wintrow voted for the measure but noted the state was making a 1% cut to budgets this year and 2% next year, and that universities were having to make cuts at a time when the economy was strong.
“What I’m kind of struggling with is we’ve heard that we’re in a time of plenty and good times, but for the last three weeks I’ve heard we’re in bad times and revenues are down,” she said, noting the 2018 tax cut Republicans pushed through. “That’s the backdrop of what we’re doing today.”
Pushing the fund cap to 15% became part of Little’s strategy following what state officials called a credible stress test that looked at how much money the state would need to withstand an economic downturn.
“This is a significant step in the right direction, in our opinion,” said Alex Adams, Little’s budget chief.