Otter to support more cuts as revenue tanks

BOISE - Gov. Butch Otter will support deeper cuts to Idaho's 2010 and 2011 budgets than he proposed in January after the state missed its tax revenue collection targets by a combined $25 million over the last two months.

Otter's budget chief, Wayne Hammon, said Wednesday the governor is increasingly convinced a more pessimistic revenue forecast is warranted.

Based on his original forecast, Otter had proposed cutting an additional $40 million from the fiscal year 2010 budget, including $28 million from public schools.

However, lawmakers on a forecasting committee on Jan. 20 decided millions more in cuts would be necessary in order to fulfill the Idaho Constitution's requirement that lawmakers balance spending. Otter now agrees with them.

"The governor believes it's more prudent to budget to the lower number," Hammon said. "Even if we miss it by a little, that little has real consequences."

Last month, the 18-member Economic Outlook and Revenue Assessment Committee recommended setting a 2010 spending package based on just $2.28 billion in tax revenue, $69 million less than the Republican governor's original proposal.

For 2011, the forecasting panel recommended a revenue target of $2.29 billion, about $60 million less than Otter's January recommendation.

Hammon said he doesn't plan on issuing a revised budget proposal to reflect Otter's change of heart, but said the Republican governor's office is working with the Joint Finance-Appropriations budget-writing committee members and legislative leaders to establish new spending priorities under a more pessimistic scenario.

Members of the joint budget panel plan to adopt target 2010 and 2011 revenue figures this Friday.

Rep. Maxine Bell, R-Jerome and the panel's co-chair, said its 16 GOP members agree with Otter: The more-conservative forecast of lawmakers makes the most sense.

"We're pretty much united," Bell told The Associated Press. "That's the reality of it. That's what we've chosen to work toward."

Minority Democrats make up only a quarter of the Legislature and have again been relegated to a largely observer role.

Still, they insist policy changes driven by Republicans in recent years have boxed Idaho into making deeper cuts to programs than otherwise would be warranted.

For instance, GOP lawmakers during a 2006 special session voted to eliminate a $260 million property tax levy for public schools, covering that share of school funding instead by hiking Idaho's sales tax rate from 5 to 6 percent.