Idaho’s looking at a $100 million-plus budget surplus when the state fiscal year closes at the end of this month — something GOP legislative leaders are calling a “blessing,” but minority Democrats say could be better used.
The Legislative Council, the panel of lawmakers and legislative leaders from both parties that oversees legislative business between legislative sessions, received a general fund update on Friday from legislative budget director Paul Headlee, showing the projected surplus is $100,015,600.
Because state lawmakers passed a “surplus eliminator” bill again this year, that money will be split 50-50, with half going to the Budget Stabilization Fund, the state’s main rainy-day savings account; and the other half going to road and bridge projects.
“I mean, what a blessing,” said Senate President Pro-Tem Brent Hill, R-Rexburg. “We knew that we did not have enough revenues coming in for meeting our needs for roads and bridges.”
He noted that this is the fourth year of the surplus eliminator approach; the $50,007,800 that will go to roads and bridges will make a big difference, as have the transfers in the past three years, he said. “It has really supplemented the basic tax revenues.”
Hill said the funds go to projects that already had been identified by the Idaho Transportation Department. “They’re putting it to use,” he said, “being able to complete some of the projects that they already had in the works.”
As for the $50,007,800 transfer to the Budget Stabilization Fund, Hill welcomed that as well — though the fund’s balance already is healthy.
Currently, the BSF has a balance of $353.23 million, which is 9.6 percent of the state’s annual general fund revenue.
Under state law, Idaho makes an annual automatic transfer to the fund in every year that state tax revenues grow by 4 percent or more, until the fund hits a balance equal to 10 percent of state general fund revenues; it’s nearing that point now. Nothing prevents the Legislature from transferring more in above that level, however.
“There are many places that surplus money could go,” said Senate Minority Leader Michelle Stennett, D-Ketchum. “We’re actually lagging behind, even with all they’re putting in, and there’s going to be more pressure with the population moving in.”
She said Idaho has pressing needs in education, transportation and more. “We’re not putting a plan together for the next 10 years about how we’re going to meet the needs.”
The state also has $97.2 million in its public education stabilization fund, or PESF; $2.9 million in the higher education stabilization fund; and $400,000 in an an economic recovery reserve fund.
Asked if the state’s got enough in reserves now, Hill said that depends on how deep the next recession is. When Idaho went into the last big recession, it had more than $400 million in state budget reserves, he noted, but the recession was far bigger than anticipated and lasted for several years, and there still were cuts, including to schools. With a growing population and increasing needs and another big, deep economic downturn, Hill said, “The $500 million is not going to go very far.”