Politics & Government

Battle looming over Idaho's stimulus funds

The economic-stimulus law was supposed to make it easier to set Idaho's budget. Instead, the fight may become one of the biggest of this year's legislative session.

Sen. Dean Cameron, the Rupert Republican who co-chairs the Joint Finance-Appropriations Committee, said Otter's plan for stimulus money does not deliver enough for state employees and education. And while Senate GOP leaders lean toward Cameron's view, House leaders so far are siding with Otter.

"It is all an argument on how you use the stimulus funds," Cameron said Friday.

Earlier Friday, JFAC set a general-fund spending target of $2.507 billion for the fiscal year beginning July 1.

That is $42.3 million less than Otter's latest recommendation and more than $450 million less than last year's original appropriation – a 15 percent reduction that reflects how quickly the economy has deteriorated.

Meanwhile, the federal government is sending $1.24 billion in stimulus funds to Idaho. Much of the money must be spent on purposes Congress specified, but part of it is intended to offset state government's revenue decline by providing funds for public schools, higher education, Medicaid and other state programs.

Otter recommended a 5 percent cut in payroll costs for state agencies funded by the general fund. He suggested holding onto nearly $80 million in public schools stimulus money to compensate for potential revenue shortfalls in the next two years and also recommended spending $45 million in stimulus funds on water, sewer and highway projects - not to fend off payroll cuts.

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