Idaho Lawmakers, Gov Agree On Revenue Forecast


BOISE, Idaho (AP) â¿¿ In a rare move since the Great Recession hit the state, Idaho lawmakers decided Gov. C.L. "Butch" Otter's tax revenue forecast for the coming fiscal year wasn't too optimistic.

The Economic Outlook and Revenue Assessment Committee voted 14-4 Tuesday to support the estimate Otter announced Monday, which foresees 2014 revenue of $2.8 billion, for about 5 percent more than the current year.

The vote reflects optimism that Idaho's economy is on the rebound.

It also leaves plenty of financial wiggle room to pay for Otter's proposal to use $20 million to fund personal property tax relief and to put $35 million in savings accounts.

House Speaker Scott Bedke, R-Oakley and a supporter of Otter's forecast, conceded he was behind it in part for tactical considerations, so as not to artificially restrain debate in coming weeks over the governor's budget priorities.

"At this date, I don't see anything wrong with the governor's placeholder number," Bedke said. "If we get out in front of this and tighten the number down too much, then I think that will stymie discussion with respect to personal property tax."

This forecast is an important starting point for budget talks, but it is only a recommendation to members of the Joint Finance-Appropriations Committee who will be crafting the spending plan for the fiscal year starting July 1.

They'll have the benefit of seeing at least February's numbers before making a final decision.

Since 2009, Otter's fiscally conservative credentials have largely been one-upped as nearly every edition of this panel voted to undercut his administration's revenue projections. That year, the lawmakers adopted a budget figure that was a full $101 million less than Otter's economists.

Last year, even as the economy showed signs of balking improvement, their figure was still $33 million less than the Republican chief executive's.

The consequence to this rift was some mild, early-session tension between GOP lawmakers and their governor over whether there was even enough money to accomplish Otter's decidedly modest session to-do lists.

Derek Santos, Otter's chief economist in the Division of Financial Management, told the panel there was good reason for going with the higher number this time around.

"My forecast reflects a gradually recovering economy â¿¿ nothing extraordinary, but acceleration nonetheless," Santos told the panel, adding that among things that make him feel comfortable, "The housing industry is starting to show some strength again."

The more pessimistic lawmakers on the panel said they worried adopting Otter's number could leave the Legislature scrambling in future years to make up for unduly rosy expectations.

Particularly worrisome, said Rep. Steve Hartgen, R-Twin Falls, was that Santos had just in December pared back the current year's revenue forecasts.

Hartgen wanted to go with a $2.74 billion estimate, a number that reflected the median of all the panelists' forecasts.

"It seems to me that the median of the committee is the better estimate of the real world," Hartgen said. "Some additional caution is warranted."

In the end, however, the optimists won out against a backdrop of an Idaho unemployment rate that in November dropped to 6.8 percent â¿¿ the lowest since March 2009 and well under the peak of 8.9 percent in July 2011.

In what's become a bit of a mantra for Idaho lawmakers this young session, Rep. Marc Gibbs, R-Grace, told fellow a panelist that "maybe there's nothing wrong with being cautiously optimistic."

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