The Idaho Stimulus...
Margaret Thatcher once said, "The trouble with socialism is that you eventually run out of other people's money"
We are trying to determine the current revenue rate of the state for 2010 to set our budget. As required by the Idaho Constitution, we are required to have a balanced budget at each year's end. Forecasted revenue for 2010 is down, way down and budget setting was to begin next week. That budget would be reflective of Idaho's economy and would become, as is the 2009 budget, the baseline for budgeting in 2011 and so on.
With the new stimulus package from Washington DC being set up for the Gov's office to request funds in the next 45 days, creates some issues. The Executive branch will have to understand what the 1100 page law now is and how to use those funds to meet the needs of Idaho, while not wrapping Idaho up with federal strings that typically come with "free money". But the Gov can not execute those funds unless they have been authorized by the Legislature (and in the stimulus bill, they kind of forgot to include that process).
We have put the normal budgeting process on hold to better understand just how the Legislative and Executive branches can most effectively and efficiently meld the funds into our process to move forward.
In my humble opinion, we need not knee jerk and do something silly before we truly understand the size of the tiger's tail we are about to grab. It makes sense to me to set our budget on what we know today and follow that up with a "stimulus supplemental" bill to keep the two separate. I don't think we will continue to get "socialist money" forever and need to ensure we are able to keep sight of what our true Idaho revenue and costs are to run our state.
One-time money rolled into our budget will cloud our process and our thinking.
Your thoughts?
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2 comments:
I am surprised about the huge concern over "strings." Perhaps I'm not well informed, but I haven't seen any evidence of strings. I have not read the bill, so they may well be there, but from what's been reported I haven't seen any.
It looks to me that much of the opposition is because Republicans in Congress wanted to score political points, and then Republicans around the country are following that lead. So in order to justify that opposition, folks have singled out "strings" to make the opposition look principled instead of political.
A agree that we shouldn't expand Idaho's budget in a way to commits Idaho to permanent future spending, but things like road projects, or extending unemployment benefits, don't do that and should be embraced.
I'd like to see you embrace the parts of the bill that will stimulate Idaho's economy; we need it.
Alan,
I'm glad you asked this question. It really has nothing to do with parties, it has to do with the Federal requirements attached to the funds in order for states to use them.
As an example, our GARVEE funds and agreements with the feds require us to do an environmental assessment on each project (replacing a freeway for example that will have no change in environmental impact) and also paying workers a minimum base wage different that what would be normal for Idaho. These two requirments alone, increase the costs of construction by about 30% for each project and extend the lenght of time it takes to complete by about 18 to 20 months. You have to weigh those costs against the cost of borrowing on the bonds in that case and if the time line can still meet the public's demands.
Other federal funds that come to Idaho many times require a state match. Some are one state Dollar to every Federal Dollar, sometimes it is a 2 or 3 to 1 match.
Some Dollars are attached to federal programs that are required to be ongoing after the federal Dollars go away. Hiring people and spending money on capital equipment, creates an investment that we must really scrutinize to ensure it's something we want or need to take on long term.
These are just a few of the types of "strings" that everyone talks about. Obviously, we would have some issues in getting matching Federal Dollar programs due to our limited state revenues. And starting something long term that we might not need just because we can get some money wouldn't be a prudent decision.
Nothing comes from Washington D.C. for free. There are always "strings" that cost the people of Idaho to get their own tax Dollars back from the Feds.
It is a common practice for the feds to "blackmail" the states to change their laws to match the desires of those that run the various federal offices in each administration. It's become a constant task now for states to have to scrutinize the offers of funding from the feds to ensure that we don't go down a road that our citizens can't afford or just don't want to take on... but those programs are temping to take on with the Dollars attached.
It's like a carrot on a string off the end of a Spruce branch... if we take the carrot, we will likely ge beat with the branch in the end... but that carrot always temps us.
There isn't much of a question that short term, some of these Dollars in the stimulus package could do our state some good, but what will be the longterm effects? If we build a bunch of new roads, will be have the funds later to maintain and preserve them? Where will the folks that build the new roads work after they are done being built? We need to this out long term to ensure we don't put ourselves in worse shape later.
Thanks for asking and I hope this answers your question.
Cheers,
Marv
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