Lewiston Tribune: Gov Continues Idaho Death Spiral

Idaho did not become 50th in family wages and education investment by accident.

This is not something that Idaho’s GOP politicians in the Capitol don’t know or understand. They simply aren’t telling the truth when they claim education is their top priority and yet they are still proposing millions in handouts to wealth and well-connected corporations and individuals.

By any good economic measurement, Idaho is in the midst of economic catastrophe. The evidence is in: these policies have obliterated Idaho family incomes and made the path to success for our children more difficult. As the Lewiston Tribune’s Marty Trillhaase notes:

“Idaho’s leaders are making conscious choices. Nobody is holding a gun to their heads.”

The only way to improve Idaho’s economy and educational opportunities is to end the 20 years of one-party rule that has brought us here. And we need to do it this year: http: Vote A.J. Balukoff for Governor.

Otter Opts to Continue Idaho’s Death Spiral

Marty Trillhaase / Lewiston Tribune

Four years ago, Idaho’s former chief economist, Mike Ferguson, argued Gov. C.L. (Butch) Otter and the GOP-dominated Legislature had lowballed revenue estimates and cut programs too deeply.

He wound up being vindicated.

Now director of the Idaho Center for Fiscal Policy, Ferguson is about to show up the governor once more.

This time, Ferguson has no qualms about how much tax money Otter expects the state’s economy to generate. But he thinks the governor is playing a shell game with it.

By funneling more than $70 million toward six reserve accounts that already have more than $200 million – and offering another $30 million in tax relief – Otter has handcuffed Idaho to what White-Cloud Analytics CEO Bob Lokken last week dubbed “a death spiral.

Fifteen years ago, Idaho led five states in how much money it allocated to each school student. Since then, Idaho has cut back and it leads just one state – Utah – in terms of per-pupil expenditures.

Poorly educated Idahoans are trained to work for low pay. Therefore, the state has produced the largest proportion of minimum-wage jobs in the country.

In 2007, Idaho’s per capita earnings were better than seven states. Today, only Mississippi has a lower per capita income.

Otter says Idaho must scrimp and save again – even though it means continuing to give education a smaller slice of Idaho’s expanding economic pie. At this rate, public education has lost 25 percent of its share of personal income. If the state’s commitment to public schools had not been tampered with, education would have about $625 million more every year.

And so Otter feeds the cycle.

Disinvestment in education begets unskilled workers who command less money and pay fewer taxes, which leaves fewer resources for education.

Ferguson has a way out of the cycle.

He would stop the corporate tax goodies. Last year, $20 million was sliced from the property taxes due on equipment. The year before that, corporate and wealthy individual income tax rates fell by $35 million. Two years is enough.

Ferguson would also stop putting money on ice. Idaho has a sufficient financial cushion. If it needs more, Ferguson suggests accepting the Obamacare offer to expand Medicaid coverage to 100,000 working poor adults – thereby freeing up more than $40 million the state now spends providing care to that same group of people.

All in all, that would leave about $130 million to spend in the budget year that begins July 1. Here’s what Ferguson would do with this money:

School funding – When you sort through the dollars Otter shifts in and out of public education’s accounts, you’re left with a paltry 2.1 percent increase. Ferguson would double the $35 million Otter has proposed – a 7.6 percent increase that gets schools within spitting distance of where they were six years ago.
Salaries – In six years, Otter has never recommended a pay hike for public employees. They’re now 19 percent underpaid. School teachers are better off, but not by much. The plan now before state lawmakers – a 1 percent pay boost plus a 1 percent one-time bonus – is more of a gesture than a solution.

But Ferguson says there’s money enough to provide 4 percent permanent raises to public employees – which would cost $21.5 million – and to teachers – which has a $36.8 million price tag.

Health – To balance the budget without raising taxes, lawmakers at one point cut Medicaid services to Idaho’s neediest adults – including those suffering from debilitating mental illnesses – by about $35 million. For every dollar the state withheld, the federal government pulled back at least another $2, which translated into the loss of more than $100 million. Ferguson says there’s more than enough money to restore that $35 million.

Odds are Otter and the GOP aren’t going to reverse their priorities. Ferguson will have to settle for bragging rights in a year or two.

He has stripped away the veneer and revealed this much: Idaho’s leaders are making conscious choices. Nobody is holding a gun to their heads. – M.T.

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