Monday, January 12, 2009

State of the State Address

Idaho's Capitol Dome by Jake Putnam


Boise--Gov. Butch Otter this afternoon called for budget cuts across the board because of the worse economic climate in the Gem State in more that two decades.

"The impact is serious," Otter told a statewide audience on Monday afternoon. "Fundamental changes are being made in the way we do business. Every director, administrator and employee in state government is re-evaluating processes and rethinking priorities. Some services that were meeting public demands – and in some cases have become expected of state government – have had to be reduced or eliminated . Our new Zero-Base Budgeting process already is identifying a number of programs and operations that have been pursued or continued at taxpayer expense but with no specific statutory authority or direction."

The Governor asked lawmakers to cut higher education budgets by 10 percent, public schools by more than 5 percent, state parks by more than 50-percent.

"My General Fund budget proposal for Health and Welfare is down 7½ percent. Higher education is down almost 10 percent; the departments of Correction and Water Resources each are down almost 12 percent," said Otter.

The Governor proposed a state budget 7.4 percent smaller than the 2008 budget and conceded that the budget cuts will be tough stressing that Idahoans are living in tough times.


Otter stressed in his speech that the transportation revenue system isn’t designed to meet state needs today. So he laid out the second part of a plan to generate new revenue.

"I’m proposing to increase our fuel tax by 2 cents a gallon in each of the next five years –for a total of a 10-cent increase in the tax, to 35 cents a gallon. That will bring in about $17.6 million in additional fuel tax revenue the first year," said Otter. "And after five years it will generate a total of about $88 million a year extra for transportation."

Otter reminded lawmakers that they raised the fuel tax to 25 cents 13 years ago. And that the state is trying to accomplish 2009 goals with 1996 dollars.

"So I also will be asking you to approve increases in our vehicle registration fees in a way that updates our system while continuing to take the age of vehicles into account. My plan will raise about $15 million in new revenue from registration fees in the first full year it’s implemented. After five years, the registration changes I’m proposing will generate about $51 million a year in additional revenue. I also am proposing a 6-percent excise tax on car rentals, and that we eliminate the ethanol exemption from the fuel tax. And I want to shift the 5 percent of fuel tax revenue that the Idaho State Police NOW gets in order to put another $16 million a year into our roads and bridges," said the Governor.

Otters budget proposals reflect his conservative approach and his goal of creating a balanced budget that one day will bring new jobs to this state.

"We want to encourage and create a climate that enables visionaries like the Simplots, Albertsons, and Morrisons of yesterday -- and like the Parkinsons, Hagadones, Vandersloots and Sayers of our own generation -- create more jobs and a bright future for Idaho families and communities," said Otter.

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