BOISE — When state Treasurer Julie Ellsworth went before lawmakers for her budget hearing last week, Sen. Mark Nye, D-Pocatello, said, “I don’t see in here anything about the litigation costs. Without getting into the pros and cons of litigation between entities, can you give us an estimate of the cost of litigation … on the occupancy question?”
Ellsworth is currently being sued by House Speaker Scott Bedke and Senate President Pro-Tem Brent Hill over her refusal to move her offices out of the first floor of the state Capitol building, where they’ve been located for more than 100 years – but a 2007 law gave the Legislature, not the executive branch, control over the first floor of the Capitol. Legislative leaders want to remodel the treasurer’s current space to provide private offices for House members, many of whom now just have open cubicles.
Both the legislative leaders and the state treasurer are represented by private legal counsel in the lawsuit – former Idaho State Bar President B. Newal Squyres of the firm Holland & Hart for the legislative leaders, and former Idaho Attorney General and Lt. Gov. David Leroy for the treasurer. Taxpayers will pay the legal bills for both sides.
Ellsworth deferred Nye’s question to Chief Deputy Treasurer Laura Steffler, who said, “At this point we don’t … have an estimate of what the legal fees will be, but we do have a vacant position in our office and we’ve been using the salary savings from that position and moving that to operating, to fund what we have paid for so far.”
Nye responded, “I worry about being underfunded for this constitutional position. Is there an estimate in the budget for the probable or proximate future cost of the litigation part of the issues that are going on?”
Steffler said, “We did not put in a line item for an additional appropriation for legal fees, so it is not included in our 2021 budget request.”
When Nye again asked, “An estimate?” Sen. Steve Bair, R-Blackfoot, co-chair of the Legislature’s joint budget committee, said, “I think they’re pretty clear that they don’t have an estimate yet, and it’s not in the budget.”
Ellsworth added, “We do have the one vacant position that I would like to fill. It would be a position that interacts with the public and helps with speedy services, so that’s how we’re funding it.”
According to state budget documents, 1.7 positions were vacant in the state treasurer’s office as of September; Ellsworth said the position she’d like to fill is a customer-service position.
So how much has each side paid in legal fees thus far? As of last week, the treasurer’s office had spent $84,599; the Legislature, $122,566.
The Legislature’s joint budget committee on Friday unanimously approved a supplemental appropriation for the STEM Action Center, which is an additional appropriation for the current year. But it won’t cost the state any additional money.
The STEM Action Center already was authorized to receive and spend up to $1 million in donations from public, private or corporate donors a year; the supplemental appropriation request says the center anticipates raising even more this year, as it’s nearly up to $1 million now. The supplemental appropriation permits the agency to spend up to $2 million a year in private donations, in addition to its state funding. Joint Finance-Appropriations Committee members congratulated the center on its successful fundraising and approved the change, 20-0.
The Little Administration has released its executive revenue forecast for the coming year, and it’s considerably lower than what the state’s seen in recent years: 4.2%. Alex Adams, Gov. Brad Little’s budget director, said the administration is following new procedures for revenue forecasting, including establishing a baseline, pessimistic scenario and optimistic scenario, assigning odds to each, and incorporating additional economists’ input.
The administration is projecting 6.1% growth in state general fund revenue during the current year, fiscal year 2020; 4.2% next year in fiscal year 2021, the year for which lawmakers will set budgets during the current session; and in the following year, fiscal year 2022, 3.5%.
When the Legislature’s Joint Economic Outlook & Revenue Assessment Committee voted on its own projections, it adopted the governor’s forecast for the current year, but went slightly lower for the coming year, at 4.1% growth. JFAC accepted the joint committee’s report and praised the committee’s work, but didn’t commit to using its figures in setting budgets.
Adams noted that in the past year, the state was anticipating 7% revenue growth, but then revised that in August down to 5.2%. “The new forecast has performed well through November,” he said, and revenues are now coming in above the forecast. “This year-to-date experience, coupled with new economic information … form the basis for the revised revenue forecast in January,” Adams told JFAC last week. He also noted that the revenue forecast for fiscal year 2021 comes to more than $4.1 billion – the first time in state history that it’s topped $4 billion. For the current year, it’s $3.96 billion.
Rep. Melissa Wintrow, D-Boise, who serves on JFAC, told Adams she had a question “that my constituents ask me all the time: They’re scratching their heads, because they keep telling me the economy seems to be booming, and we’re growing, there’s all these jobs. Why are we not collecting more revenue?”
Adams said, “Revenue is growing. Even when we were at 5.2%, that’s ranked as the top 10 states nationally.” He said when he talks with other state budget officers, “They would kill for the level of growth we’ve seen.” State tax revenue is projected to grow for the next five years, he said, “even under the most pessimistic scenario.” But, he said, “It’s tapering off.”
When the governor asked state agencies to trim 1% from their current year’s budgets and 2% from next year’s, Adams noted that he called it a “spending reset.” “I’m not sure revenue was our primary concern,” he said. “That’s why we called it a spending reset rather than a revenue reset.”
Adams said the problem was that the cost of simply maintaining government services as-is, especially with a growing population, is rising substantially each year, and the concern is that those costs will grow faster than state revenues do. “That’s not sustainable,” he said. “What we’re trying to avoid is those lines crossing.”