Business stakeholders approved Gov. Brad Little’s State of the State message and budget proposal, which featured a heavy emphasis on public education but was conservative to help the state prepare for a possible recession.
Presented on Jan. 6 in the Idaho Statehouse, the budget called for a 3.75% increase, which Little said was the smallest increase in a state budget since 2014. In October, he called on state agencies to cut their budgets this year by 1% and to identify a 2% base reduction for next year.
Little also proposed putting an additional $102 million in the state’s rainy-day funds, after a recommendation from Moody’s Analytics that states have between 18% and 23% of their annual budget in reserves. With the additional money, that will bring Idaho up to 15%, said Alex Adams, administrator of the division of financial management. That will also means lifting the current statutory cap of 10%, he added.
“From our clients’ perspectives, it was a five-star speech,” said Roy Eiguren, partner with Eiguren Ellis Public Policy, in an email message. “They are exceptionally pleased with his positions on matters that are of the highest concern to them: Education, workforce development, transportation, regulatory reduction, a conservative state budget and continued progress in environmental cleanup and enhanced research at the Idaho National Laboratory.”
“The Boise Chamber was pleased with the Governor’s State of the State address as it highlighted several Chamber priorities,” said Bill Connors, president and CEO of the Boise Metro Chamber, in an email message. “All of these issues have been a part of our legislative agenda, and we are pleased to see Gov. Little so engaged on all of them.”
Building on this summer’s reported 75% reduction in agency rules – an opportunity Little got when the Legislature was unable to confirm the “drop dead” bill that typically extends those rules to the next year – he called for a further reduction in state rules, including a zero-based initiative to look at 20% of the state’s rules annually.
Little also wants the Legislature to continue reducing occupational licensing requirements. In addition, he said his administration had prepared 30 pieces of legislation to repeal outdated statutes.
Despite the lean budget, Little did call for investments in some areas, most notably education, ranging from literacy funding on the K-3 level to increasing teacher pay to an ongoing $7 million in Opportunity Fund scholarships to support up to 2,400 students. In addition, he called for investments in career-technical education (CTE), such as $6 million in capital expenses to improve classrooms at the College of Eastern Idaho, Lewis-Clark State College and the Department of Juvenile Corrections.
While saying that he wished to wait for an updated report next spring on Idaho’s transportation backlog, Little proposed spending an additional $100 million this year on transportation infrastructure. The Idaho Transportation Board would determine how the money would be spent, he said.
“We could not be more pleased with the structure of investments in CTE, teacher pay, highways, broadband and Medicaid,” said Alex LaBeau, president of the Idaho Association for Commerce and Industry, in an email message.
Little praised the state’s IT modernization project, which he said would improve cybersecurity. And, following the recommendation of his Broadband Task Force, which issued its report in November, his budget included $113,000 to set up a state broadband office in the Department of Commerce. He also budgeted $75,000 for a state drone office intended to coordinate 90 programs across Idaho state agencies, and $1 million toward cybersecurity education.
However, Little did not include a tax exemption for equipment in data centers, which stakeholders in that industry have said would make it easier for Idaho to attract such businesses. He said during a Jan. 3 press conference that he was not in favor of tax exemptions. Neighboring states either have such a tax exemption or no sales tax at all.