Minority Leader John Rusche Monthly Newsletter

August 8, 2011

July has come and gone.  We finally are starting to see some color to our tomatoes and the hot days has turned the grass on the Lewiston Hill brown.  Here is a brief update on various things.

The hottest political news is probably the Redistricting process.  They have less than a month to finish, and have finished all of their outreach meetings.  The Commission  must be done by September 6.

The meetings have turned a bit contentious.  The Republican Commissioners appear to want to make even more secure conservative districts and do in moderates.  The Democratic Commissioners seem to be focused on keeping the cities and the more urban districts in tact.  Both maps pit incumbents against each other in many places.  Although they originally thought they could have a map done by the end of July, I think they will be lucky to reach an agreement at all.

You can see the maps and even try your hand at drawing maps.  Here are links to the Redistricting Commission website and mapping tool.

Here are some links to stories about the proposals.

There is no precident showing a path forward if they fail to vote out a map.  I expect that the State Supremem Court will decide either on a map or how to proceed.

Budgeting and Financing
FY 2011 closed out July 31 with a “surplus” of about $85 million.  $67 million of that was required by Fedral law to be sent to schools, and public schools received almost $60 m and professional-technical $7.5 m.

I am sure that most of the districts are thrilled to have the extra money.  But it comes with  a catch.  It is “one time” and cannot be counted on for on-going uses.  Some districts have big holes because of the last two years of funding reductions, and others see the handwriting on the wall for this year (FY2012) and are setting it up as a reserve.  The school districts are likely to need this (and other) additional funding going into next year given the prior reductions in the FY 2012 budget.

But the really interesting thing about the revenue for 2011 is that it sets the baseline for 2012.  The Legislature was very conservative is estimating 2012 revenue and setting 2012 budget, cutting public schools, healthcare and higher education funding.  But to reach the conservative number chosen for tax revenue, Idaho will actually need to collect less in FY 2012 than we actually did in FY 2011.  More reasonable extimates of revenue growth (3% 2012 over 2011) will result in almost $120 m “surplus”.  This begs the question of the Medicaid and school budget cuts–were the necessary or a manifestation of an idiology.  And will we end up paying more later for “savings” now.

Already, there have been calls for a tax cut because of the anticipated “surplus”.  I think that some return of funding to needed operations and replenishing our rainy day funds come first.

Leadership and solutions
I know of few people who were pleased with the performance of the Congress over the last few months.  But the thing that really perplexed them  is the brinksmanship around the debt ceiling.

I am not a Congressman, but as I see it, there are two issues.  One is a deficit, the other is a debt (or future debt).

First is the annual shortfall, the annual deficit.  That seems to be to have gotten worse for a few reasons.  First the recession produces less economic activity and tax receipts fall while more support for unemployed workers and their families is needed by more Americans.  Second, we have not been collecting enough taxes to match Congressional appropriations. (interestingly, our tax burden is the lowest it has been in a long time, perhaps 60 years.  Here is a link to an article and chart of tax burden as a percent of GDP).  Especially interesting is the decrease in corporate taxes and increase in employment taxes.

The second is the long term concern about money owed in future years for Medicare, Social Security and other benefits to which Americans are entitled by law, and future bond payments for money we are currently borrowing.  The major problem here is actuarial.  Medicare and Social Security have been wildly successful in extending the lives of senior Americans, and the anticipated revenues do not cover the anticipated expenses in future years.  As with any similar plan, a small adjustment in revenues and a small adjustment in outgoes can have dramatic results in the estimates of future shortfalls.

So why was it difficult for Congress to get to a workable solution (which I think still eludes them)?  Maybe because the solutions are different. Short term cuts in discretionalry budget  do not address the long term actuarial difficulty. And, in the short term, when you need more cash flow, you need more cash flow now not planned lower payments 10-20 years from now.

From my point of view, it appeared to be politics over solutions, partisanship over pragmatism.

So what will be different?
I was thinking about the show in DC and the problems during our last Legislative session with ideologic posturing (nullification, admittedly unconstitutional bills, federal government bashing) and wonder what the next election cycle will bring.  Do we expect much difference?

I am quite concerned that the closure of primary elections will lead to further polarization, more heat and less light.  RINOs, DINOs, moderates and compromisers, beware.

Summer Travels and Legislative Interim work
This is the right time to be working on bills for next session.  So if there is an issue to discuss or a legislative solution to a problem, let me know so we can begin work.  It is easier now than if we wait until the session.

I will be doing a bit of driving around Idaho trying to talk to people and identify good community members who might be interested in running for the Legislature.  If you want to help or want to know more about the Legislature, let me know.  There is a link on the side panel if you want to help offset the costs of the effort.

Information and Contact Information
It is not always easy to know what is up in Boise when the Legislature is not is session,  I try to keep track of things through the papers and blogs (Betsy Russell’sEye on Boise, Bill Spence (of the Tribune) Political Theatre, Dan Popkey (of theStatesman) Idaho Politics), or just keeping my ear to the political ground.

Thanks again for the honor you have shown in me by allowing me to serve as your representative.  You can call and leave a message at home (208-743-1339) or email me and I will get back to you.

It continues to by my honor to serve as your representative.