LITTLE’S DISAPPEARING ACT: HOW THE GOVERNOR PLANS TO SPEND AWAY IDAHOANS’ TAX DOLLARS IN FY2024

LITTLE’S DISAPPEARING ACT: HOW THE GOVERNOR PLANS TO SPEND AWAY IDAHOANS’ TAX DOLLARS IN FY2024

 

By Idaho Freedom Foundation Staff

 

THE GROWTH OF IDAHO’S BUDGET 

 By Niklas Kleinworth

 

Gov. Brad Little has proposed increasing state spending by 9.6%. This means that state spending is growing faster than the rate of inflation and far exceeds the 5% increase, as reported by the administration and repeated by the media. The accounting gimmicks are being used to hide unprecedented spending, which is why a $1.5 billion surplus nets just $120 million in tax relief under the governor’s plan.

 

It’s a clever ploy that allows the governor to present himself as a fiscal conservative while emptying the state’s account for a host of new programs, entitlements, and projects.

 

The budget, if approved by lawmakers, would add another 326 permanent, full-time positions to state government, despite the fact that there are already 2,500 vacant positions.

 

The spending plan would also increase the state’s dependency on the federal government. Funding from Washington, D.C., would grow by 6.1% to about $5.8 billion. This means that federal bureaucrats will continue to hold a 42% overall stake in Idaho’s budget, strengthening the federal government’s grip on Idaho schools, infrastructure, and health care.

 

The budget would also greatly expand education spending, increasing the state portion of the funding by 14.8% without any movement toward greater accountability. Unlike other states, Little’s budget does not propose any expansion of education choice options for families and students.

 

A closer look at these damaging practices will provide the true picture of how Gov. Little’s spending spree seeks to grow government. Through an impressive disappearing act of the state’s surplus, state agencies and special interests are making out big while Idaho families are left by the wayside.

 

POOF! GOES THE SURPLUS

By: Ronald M. Nate, Ph.D.

 

Imagine: You’ve stopped at the local burger joint for lunch and handed over a $20 bill for your $15 meal. But instead of getting a bag of food and five bucks back, you get only a bag of food. When you ask about your $5 in change, the worker says, “Don’t worry, I added a bunch of extra fries to your bag.” Are you happy?

 

Of course not. You didn’t ask for more food. You just want your excess money returned.

 

Well, Idaho, this is exactly what you have with our big-spender governor, Brad Little. As we pass the halfway point of the 2023 fiscal year, tax collections in Idaho are once again far exceeding expectations and the spending plans of the 2022 Idaho Legislature. Ordinarily, one wouldn’t want the government to “keep the change” but rather return the surplus money to the people who paid in too much — the taxpayers.

 

The general fund surplus forecast is north of $1.5 billion — compared to the original FY23 spending of $4.6 billion. It is a huge surplus.

 

Instead of taxpayers getting their money back, Gov. Little is on a spending spree. He is filling your bag of food with spending items not dreamed of during the budget-setting process and tucking them into the 2023 spending year so as not to make the budget for 2024 look so bloated (as it will be). This is how a big spender makes a massive surplus disappear.

 

Here are just a few examples of spending increases added to this year’s budget:

 

  • Secretary of State: $10 million for “technology enhancements”
  • Workforce Development: $15 million for more “workforce development”
  • Commerce: $2 million for women’s business center grants
  • Energy and Mineral Resources: $15 million for energy efficiency
  • Permanent Building Fund: $300 million for maintenance backlog
  • Idaho Public Television: $2.8 million for transmitter infrastructure
  • Board of Education: $20 million for “securing our future”
  • Public School Support: $30 million for state technology investment
  • Corrections: $2.5 million for alternative placement operations
  • Natural Resources: $3 million for electronic data management
  • Natural Resources: $375 million for additional water/waste projects
  • Health and Welfare: $1.6 million for electronic medical data records

 

Remember, all this spending is on top of our planned spending increases of 14.6% for FY23 over FY22 in all-funds spending. And these supplemental plans are not all one-time spending; Idaho’s government is growing by 94 employees from these supplementals alone. Finally, the governor promises meager tax cuts of $120 million while leaving $210 million on the bottom line after his tax-and-spend frenzy.

 

We are watching a spending spree funded by the excess taxes Idahoans are paying. Families are being crushed by inflation and taxes, and our governor turns a blind eye, spending it up instead.

 

Amazingly, we’ve only detailed some of the surplus spending. In other funding categories (dedicated funds and federal funds), the governor is directing additional surplus spending of $1.6 billion. In all, the governor is recommending a whopping $2.7 billion of additional “supplemental” spending. This moves total FY23 government spending in Idaho from an original appropriation of $12.9 billion to over $16 billion in total appropriations for the year. It’s monumental.

 

Let all that sink in: $2.7 billion of more spending, $0.12 billion of tax cuts.

 

Historically, supplemental spending only happened when agencies ran into shortfalls due to unexpected circumstances (disasters, emergencies, recessions, etc.), but for this governor, supplementals are business as usual. Times are so good for the state government right now, the taxes are flooding in, and agencies didn’t even ask for many of these extra supplemental funds.

 

Hopefully, Idaho will someday have a fiscally conservative governor again, and instead of a big bag of spending stuffed with even more spending and no change, we will see meaningful changes in our tax structure so Idahoans don’t get overtaxed, overspent, and left holding a bag of cold fries in the end.

 

SUPPLEMENTALS AND BUDGET GIMMICKS

By: Fred Birnbaum

 

When the Legislature starts each session, the Joint Finance and Appropriations Committee (JFAC) adjusts the current fiscal year’s spending by appropriating what are known as supplemental spending requests or supplementals. This is generally done before appropriating the next year’s budget. JFAC will soon consider supplemental spending requests for the current fiscal year, FY23, which ends on June 30th, meaning that these supplementals are considered for the last half of the current fiscal year.

 

Historically, supplementals were appropriated to adjust the budget for emergencies and unforeseen additional spending needs by agencies, such as a higher prison population than was anticipated when the budget was approved during the prior session. However, supplemental spending has become a tool to hide bigger spending increases.

 

How does this work? When the governor publicly compares spending in FY24 to FY23, it is based on original General Fund appropriations, not the supplemental spending. So, these additions don’t factor into the overall budget narrative. The mainstream media doesn’t challenge these assertions, but it should.

 

In FY20, the supplemental spending was $111 million, a little over 1% of the all-funds appropriation of $8.962 billion.

 

In FY21, the supplemental spending jumped to $1.394 billion.

 

In FY22, it increased further to $2.484 billion, and finally, this year, for FY23, the request is now $2.744 billion, about 21% of the original appropriation of $12.913 billion.

 

This is an abuse of the process, and it is plainly a way to conceal spending growth.

 

There is yet another budget game: the shifting of general fund revenues to dedicated spending accounts. This does a couple of things: It makes the percentage increase in General Fund spending look smaller, and it conceals the overall growth of state-funded spending.

 

For example, the governor’s FY24 budget request includes a 5% increase in General Fund spending, which, in these inflationary times, might seem reasonable — except that hundreds of millions of dollars are being transferred to dedicated spending accounts not included in that 5% calculation. So, going forward, we should compare total state-funded spending in one year to the next and not simply the General Fund increase. That way, any shifting of funds will be captured in the overall spending increase percentage.

 

When we compare the FY23 original state-funded spending to the governor’s FY24 request, the spending is up 9.6%. That is on top of a state spending increase from FY22 to FY23 of 18.6%. Stated another way, state-funded spending, which excludes the federal spending growth, has increased by 30% over the last two years. Remember: These are original appropriations and don’t include the supplementals, so until the books close on FY23 and FY24, we won’t know how much the spending has actually increased.

 

Furthermore, the governor proposes another $61 million added to rainy-day and other reserve funds when the state already has a cash position in all of these funds of over $2 billion.

 

Some might claim that a lot of this spending is one-time. But until the dust settles on the huge growth of government spending beginning with Covid, we can’t be sure that government spending hasn’t reset to an unsustainably high level.

 

GOV. LITTLE’S BUDGET PROPS UP PUBLIC EDUCATION SYSTEM, DOESN’T SERVE STUDENTS

By: Kaitlyn Shepherd

 

Unfortunately for Idaho students, families, and taxpayers, Gov. Brad Little’s proposed budget indicates plans to increase state-funded spending by 14.8% for a public education system that has proven to be unaccountable for results.

 

Among other priorities, the governor recently foreshadowed his plans to raise teacher pay. According to the governor, this increase will put Idaho among the top 10 states in terms of starting teacher pay.

 

How will this play out? Idaho’s teachers are compensated based on the Career Ladder, which allocates teacher pay based on educational degrees and years of service rather than merit. According to state department of education data, the average base salary of an Idaho teacher is $54,800. Gov. Little plans to give every teacher in Idaho an automatic pay raise of $6,300 each, meaning that a teacher will now make approximately $61,100 on average, an 11.5% increase, regardless of performance.

 

Little also plans to give every high school graduate in Idaho $8,500 to attend colleges, universities, and career technical or workforce training programs in Idaho. Subsidizing students’ educational expenses removes incentives universities might have to control costs and keep tuition low for students.

 

Furthermore, Gov. Little touted the state’s “great advances” in literacy. He stated that literacy spending has increased fivefold over the past four years and reported that “reading scores for all Kindergarten-through-third-grade students are the highest in years, with impressive gains among our youngest learners.”

 

Unfortunately, this literacy spending and other so-called educational “investments” have failed to achieve their desired results. Although student performance may be approaching pre-pandemic levels, viewing academic performance over time shows that student achievement on multiple standardized tests — the National Assessment of Educational Progress (NAEP), the Idaho Reading Indicator (IRI), the Idaho Standards Achievement Test (ISAT), and the SAT — remain stagnant or have declined over time.

 

Rather than throwing more money at the existing system and expecting different results, Idaho should empower students to take charge of their education by passing a robust school choice program that enables all students to pursue the educational provider or environment that best serves their needs.

 

CONCLUSION

 

By: Wayne Hoffman

 

The governor’s budget recommendation is exactly that: a recommendation. It doesn’t have to be approved. Lawmakers have various options at their disposal to address the governor’s proposal besides rubber-stamping it. They could:

 

  • Propose bigger tax relief. That could mean larger reductions in property taxes, the elimination of the sales tax on groceries, additional cuts to income tax, or some combination of all three.
  • Eliminate superfluous government spending. This would include existing state spending on unnecessary or useless programs, as well as eliminating the governor’s proposals for new spending.
  • Restrict the number of new government employees and, ideally, cut the number of people on the state payroll. Remember that adding new employees also poses a problem for the private sector, which is forced to compete with state government jobs in an already-difficult labor market. With 2,500 vacancies, why are new positions being added?
  • End accounting gimmicks. Any additional state spending should appear transparently, meaning emergency spending in the current budget year should be confined to actual emergencies.
  • Reduce dependency on federal funds. For decades, state lawmakers and governors have viewed federal funds as “free money.” This surrenders sovereignty, compels the state to do Washington, D.C.’s bidding, and exacerbates the national debt.

 

From idahofreedom.org

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