Idaho sustains fiscal strength

There is a difference, Eileen Norcross said, between measuring a state’s economy and its overall fiscal health.

She suggested numbers alone can’t tell you everything about why Idaho is in good financial shape, but if you know where to look...

The signposts are there.

Norcross is a senior research fellow at the Mercatus Center at George Mason University.

The institution in Fairfax, Va., just released its fourth annual rankings of states’ financial records — and although a good-sized staff was needed to pore over various documents, Norcross has been left in the position of explaining it.

Florida was ranked No. 1 and New Jersey dead last in the rankings after all the numbers were chewed up, with Idaho sitting at a very healthy No. 9.

“But be careful jumping to conclusions,” Norcross said. “It matters quite a bit how a state got to its financial position... and whether it can be sustained.”

NORCROSS understands her language of comparative long-term solvency, fiscal discipline, spreadsheets and service-level solvency can glass almost anyone’s eyes in no time at all.

She tries to keep conversations at an everyday level most people can understand.

“The metrics of service-level solvency may seem confusing unless you work with them every day,” Norcross said, “but in this case, the numbers really are important because they indicate that Idaho has financial maneuverability if it becomes necessary.”

State Rep. Luke Malek, R-Coeur d’Alene, believes he can make Norcross’s explanation even simpler.

“We are a conservative state whose first obligation is to the vulnerable people in our society,” Malek said. “It’s our job to meet the state’s needs with the money available.

“We are a balanced-budget state, so we can’t go spending money we don’t have.”

If Malek’s view is correct, then why doesn’t every state stick to a conservative, balanced-budget approach to its finances?

“I can’t speak for other states,” Malek said, “but people have different feelings about debt. And to be fair, Idaho is a state with very few obligations and also a very small revenue stream.

“Our economy is a lot easier to manage than California.”

THERE’S another issue facing some bigger states with huge debt hanging over every piece of business: inherited obligations (for instance, pension plans) that make digging out of debt difficult for states like Illinois and New Jersey.

Idaho doesn’t have that particular problem, but there are still troubling decisions in every session.

“Everything we do starts with education,” Malek said. “All these other issues you hear about, they can’t even be addressed until we take care of education.”

There is a hue and cry every year about spending more on education, but Malek pointed out roughly 66 cents out of every tax dollar goes to education — an amount comparable to other states in the region.

“All you can do in a state like Idaho is continue to be cautious and not go spending like crazy if there is a windfall,” Norcross said. “We’ve seen that happen in North Dakota and Alaska, with really disastrous results.

“What I’d say to Idaho is to concentrate on the word ‘sustainable.’

“Keeping your state fiscally sound begins and ends right there”

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Steve Cameron is a special assignment reporter for The Press. Reach Steve: scameron@cdapress.com.