In the red 

Governor not seeking federal handouts, orders cuts

While states across the nation look to Washington, D.C., and to the incoming administration for help with faltering revenue, Idaho Gov. C. L. "Butch" Otter prefers that the state go it alone.

The majority of state governors have lobbied Congress and met Dec. 2 with President-elect Barack Obama to plead their case for a state budget bailout that could include additional Medicaid funding, spending on state infrastructure programs and extended unemployment benefits.

They call it economic stimulus. Otter calls it fiscally reckless.

"I think that exacerbates the problem," Otter said at a Dec. 1 press conference where he announced an additional 3 percent, across-the-board budget cut. "I don't think that's a responsible course of action by the governors themselves. Certainly it's one that we complain about almost on a daily basis through any campaign, about the federal spending."

Flanked by Republican legislative leaders and his budget staff, Otter announced the latest budget cut, bringing the total cuts for the current fiscal year to 4 percent, or some $130.6 million in cuts.

"I think there's going to come a time when we're going to have to start to take a look at some of the nice programs initiated in many areas of government and go back to what is necessary. Those aren't just smart, cute little words," Otter said.

Otter is allowing the Idaho State Department of Education to use reserve funds so that public schools remain fully funded, but he is saving other state reserves in case they are needed in next year's budget.

Otter refused to quantify how low state revenue collections have been, though he saw preliminary November figures from the State Tax Commission prior to announcing the holdback on Monday, Dec. 1. Earlier that day Otter had decided to order 2 percent cuts, but by 11 a.m. he decided to change the amount to 3 percent. Sales tax collections were down in November as were income tax withholdings.

"It changed from last week to this week, which is why we delayed the press conference," said Otter budget director Wayne Hammon. "It keeps changing."

Otter called Idaho Democratic leaders that morning to deliver the news, but did not offer any more detailed figures to them.

"We haven't seen the numbers so it's hard to tell," said House minority leader Wendy Jaquet of Ketchum. "You have to trust the governor and his staff and certainly in the past [state economist] Mike Ferguson has been right on."

Jaquet and Senate minority leader Clint Stennett called for more targeted cuts so that higher education and state programs to help the growing numbers of unemployed Idahoans do not suffer.

"Democrats will work hard to ensure the efficient delivery of critical services to our citizens and protect middle-class families from any further tax shifting," said Boise Democrat Sen. Elliot Werk in a statement from the Idaho Democratic Party.

Asked what he considered "nice programs," Otter responded obliquely that some state agencies have been doing the bidding of prior governors, such as preparing multiple annual reports without any good management reason.

Otter also said he would not ask for a pay increase for state workers in the coming Legislative session, despite recommendations from his own Department of Administration for a 3 percent pay hike.

Otter skipped the National Governors' Association meeting with Obama in Philadelphia, saying he had pressing matters to deal with in Boise.

"I am working with the Western Governors Association to make sure our region's views are carried to the president-elect, and I have talked with transition co-chair and senior White House adviser Valerie Jarrett. I expressed my thoughts and opinions to her, and we have opened a direct line of communication with the president-elect and his team."

The governors of South Carolina and Texas also oppose an infusion of borrowed federal dollars to help out the states. But later in his Dec. 1 press conference, Otter relented a little, saying he would accept some additional federal highway funds, as a form of restitution.

"Compared to the other moneys that they owed us on PILT and No Child Left Behind and all the other federal programs that they mandated on us, we still felt that they owed us a whole lot more money so they got a lot of catch-up to do," Otter said. "That may be a sinful way to salve my conscience, but I'm gonna do it."

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