A Million Here, A Million There: Legislators Eye New Accountability for Actual Costs of Legislation 

Statehouse leadership says to expect a change sooner than later.

According to Joint Rule 18, every bill introduced in the Idaho Legislature must have an attached statement of purpose and a fiscal note. The former is an invitation for lawmakers to vote in favor of the bill, while the latter provides a forecast of how the bill could affect the state's bottom line—if at all. At least, that's how they're supposed to work.

All too often, said Senate Majority Leader Bart Davis (R-Idaho Falls), the financial consequences of legislation go unexamined until taxpayers are left with the tab.

"I want fiscal notes to be as accurate as they can possibly be," he said. "My experiences with most legislators is they really are trying to give me a good fiscal note. They're trying to give me a number, but they do have to rely on input from others."

Joint Rule 18 was most recently modified in 2013, when lawmakers added language saying the statement of purpose isn't part of a bill's text, and fiscal notes only apply to unamended bills. Now, Davis and other legislative leaders are looking into ways of encouraging their colleagues to give greater scrutiny to how bills affect state and local coffers—and they can expect change to come sooner rather than later.

"I have a possible re-write right here," Davis said.

According to Idaho Center for Fiscal Policy Director Lauren Necochea, the problem with fiscal notes boils down to a nickel-and-dime effect, with counties, cities, agencies and taxpayers paying the costs of bills that went under-examined during the legislative process.

"It adds up. A million here and a million there, and suddenly you're talking about real money. People sitting around the kitchen table are impacted by state budget decisions," she said. "We pass a lot of bills every year, but if they're costing money we're not acknowledging, it can add up."

Necochea cited HB 311, an elaborate proposal by Star Republican Rep. Mike Moyle late in the 2015 legislative session, which would have increased fuel taxes by 7 cents, removed a sales tax on groceries and repealed the food tax credit. Moyle told fellow lawmakers it would be a tax increase in fiscal year 2016, then turn into a net tax decrease in FY 2017. The Center for Fiscal Policy challenged Moyle's fiscal note, saying passing the bill would actually culminate in a $50 million loss in general fund revenue. The bill cleared the House, but was bounced back to committee by Senate Republican leadership.

Necochea said fiscal notes with more thorough information, including projections, analysis and summaries, would give lawmakers the tools they' need to make measured decisions, but that information isn't included.

"You rarely see two years of impact on a fiscal note. They're leaving information on the table," she said.

A recent report by the Center on Budget and Policy Priorities ranked the Gem State 33rd in the nation for the tools it makes available to legislators to score bills for fiscal accuracy. It gave Idaho poor marks for failing to use detailed, multi-year forecasts of revenue and spending in compiling fiscal notes and finding independent consensus on revenue forecasts.

States that performed well in the report, like Washington, Maryland, Tennessee and Connecticut, have robust services available to legislators to help them plan for budgeting well into the future.

Idaho isn't alone in the need to address challenges stemming from fiscal notes. Connecticut, the highest-scoring state in the report, requires bills and budgeting that increase spending to be audited by a nonpartisan agency, and multi-year budget projections of any piece of legislation that could affect governmental units or agencies extending at least five years into the future.

Lewiston Democratic Rep. Dan Rudolph has expressed concern about the role and scrutiny of fiscal notes in the legislative process. He said he'd like to see stronger tools or more staff available to legislators to help build more complete fiscal notes. From his point of view, Joint Rule 18 provides few guidelines for what constitutes a complete or thorough financial accounting.

"Yes, Idaho law requires a fiscal note, but there's no requirement of accuracy. There isn't any vehicle to provide that accurate estimate," he said. "We don't have resources worth a darn in determining the fiscal impact. It's our responsibility."

Davis wouldn't say exactly what changes leadership could make to Joint Rule 18 during the current session, but he did say possible changes tend toward encouraging legislators to debate the sufficiency of fiscal notes in committee before they reach the House or Senate floor. That could include giving committee chairs more headroom to ask for analysis of legislation, or empowering individual lawmakers to ask their chairs to form small committees for conducting fiscal analyses. Encouraging legislators to debate fiscal impact statements before their full chambers would set a bad precedent, Davis said, since that would imply lawmakers would vote on statements of purpose.

"So now we're voting on them? I think that's the wrong precedent to set because then you're saying this advertising that's in the statement of purpose [is legislative intent], and I don't think that's a good policy for the state to have," he said.

For Necochea, however, the risk of a bill clearing the Legislature without responsible fiscal vetting is immanent.

"I don't think it's rampant, but there's always that potential, and until we have transparent budgeting practices we're at risk for passing a bill that costs more than we think it does," Necochea said.

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