From Bert Brackett

Tuesday, January 17, 2012

General fund revenue collections for November were up only up $0.4 million from last November. Cumulative collections year to date through November were $42.8 million more than last year. In August the Division of Financial Management revised upward the revenue projections by about $160 million, but this is the fourth month in a row that revenue has come in below the revised projection fora cumulative total of $16.2 million less than projected. I

It now appears that the budget "surplus" is going to be considerably less than what was projected in August. The Legislative Services Office reported at the Associated Taxpayers of Idaho conference in December that the estimated surplus was down to $77 million.

As we approach the 2012 legislative session, several things will occur. The legislative revenue projection committee will meet Jan. 5 and 6, later this week. They will get reports from business leaders, economists and others to assist them in selecting a revenue number for the remainder of fiscal year 2012 and for fiscal year 2013. The governor will present his State of the State address on January 9 and will unveil his budget for 2013 as well as revenue projections for the rest of the year. It is expected to contain a downward revision in revenue for the rest of fiscal year 2012. Then, at some point, the Joint Finance and Appropriations Committee will settle on a number that we will use to construct the state budget for fiscal year 2013.

The Legislature will consider replenishing some of our reserve accounts. By statute, the budget stabilization reserve account will receive a transfer of funds if the economy grows more than 4%. This account automatically receives up to 1% if growth exceeds 4%; so if we experience growth of 5% or more, then the full 1% is transferred but there is a cap of $140 million.

However the Legislature can vote to defer or suspend the transfer into the fund. Replenishing the Public Education Stabilization Fund (PESF) requires an appropriation from the Legislature. I support starting to replenish this fund, but not at the expense of current public school operation. The PESF account was very valuable this past several years of declining revenue in maintaining the level of operations of our public schools that we did while avoiding even deeper cuts.

During the 2011 session, JAFC appropriated a little over $1 million to the Idaho State Tax Commission to increase tax compliance. At the end of September 2011, returns from the tax compliance efforts were about$43 million and costs were slightly under $5 million. The rate of return is currently declining but the initial effort has been very productive. While none of us like to pay taxes, we all want them to be collected fairly and uniformly and this project helped ensure that is happening.

As part of the fall JAFC update, we toured the State Tax Commission office in Boise. It is a very impressive operation with their increased use of technology to fairly and efficiently collect the taxes to run state government. Under the leadership of former Senate Pro tem Bob Geddes, it is reassuring to see the operation of this necessary part of our state government.

I do not expect a lot of activity in the Transportation Committee, but one issue we may discuss is making a uniform speed on the Interstate highways for cars and trucks. There is some thought it would be safer if all vehicles were traveling the same speed. My primary concern is for public safety so I look forward for the discussion.

I expect a very busy session in the Natural Resource and Environment Committee. It is my understanding the ATV interim committee did not fully resolve the hunter, ATV use and road closure issues. So I expect some of those bills we held in committee last year will be reintroduced. For a discussion of that issue refer to my comments in District 23 Newsletter #8, April 8, 2011. Other issues I expect to see in the committee is right to hunt legislation and a discussion on the ability for landowners to sell tags.

Animal cruelty is another issue that I will be working on. If we can approve legislation that makes the third offence a felony, that should head off an initiative effort. Idaho is one of a few states that does not have that felony provision and because of that, Idaho is being targeted. It makes more sense to me to pass the legislation than to try defending against an initiative.

This is looking like a very busy and challenging session. Please contact me if you have any questions or suggestions.