Some highlights from Idaho’s 2020 legislative session, which adjourned for the year Friday:
Lawmakers approved a $4.06 billion general fund budget for fiscal 2021, an increase of $152.1 million, or 3.9 percent, from the current year.
On a percentage basis, that was the slowest spending growth since 2014. The figure likely would have been larger had the governor not ordered a 2 percent base reduction — a move that saved about $38 million.
Public schools accounted for more than half the increase. The fiscal ’21 K-12 general fund budget weighed in at $1.985 billion, up $87 million or 4.6 percent compared to this year.
More than half of that amount — $50 million — went to boost teacher salaries and benefits. School districts also received a $13.7 million increase in the funding they receive for utilities, health care premiums and other discretionary expenses.
The overall budget for the Division of Medicaid was $3.1 billion, an increase of $283 million or 10 percent from the current year. About two-thirds of that was because of Medicaid expansion.
The federal government will cover 80 percent of the year-over-year increase, or $229 million. State general fund support jumped $36.6 million, or 5.3 percent, to $724 million; dedicated funding, mostly in the form of hospital and nursing home assessments, increased by $17.5 million, or 6.9 percent.
The Idaho Department of Correction saw a 12.6 percent, $31.4 million increase in general fund support for fiscal ’21, to $281.3 million.
Lawmakers also transferred another $30 million into the state savings account, bringing its total to $423 million by July 1 — up from $373 million from a year ago.
Projected revenues for fiscal ’21 are $4.125 billion. However, that forecast was made in February, before global work and travel restrictions related to coronavirus increased the likelihood of a recession.
Lawmakers unanimously approved $2 million in emergency funding to help to combat the COVID-19 virus.
The move came a day before Gov. Brad Little declared a state of emergency — the same day that the first confirmed case of the virus was identified in Idaho. As of Friday afternoon, the state had 23 confirmed cases, two of which required hospitalization.
Lawmakers freed up another $1.3 million to allow more state employees to work from home while continuing to provide critical state services during the emergency. The state also expects to receive at least $4.5 million in emergency funding from the federal government.
Perhaps the most unsung accomplishment of the session was the adoption of a new five-year, $223 million teacher compensation plan.
The bill, which was introduced with virtually no fanfare, reflects the recommendations from Gov. Little’s “Our Kids, Idaho’s Future” education task force.
It adds a third rung to the career ladder teacher salary schedule, specifically for highly qualified veteran teachers. It also increases state support for beginning and mid-level teachers.
The legislation passed the House on a 52-10 vote, and passed the Senate 30-1. Rep. Priscilla Giddings, R-White Bird, was the only north central Idaho legislator to oppose the bill.
No relief at home
The biggest issue coming into the session — and one on which there appeared to be broad, bipartisan support – went down in flames.
House Majority Leader Mike Moyle, R-Star, sponsored legislation imposing a one-year freeze on property tax collections for all nonschool local taxing districts. Moyle estimated the move would forestall up to $132 million in additional property tax collections in fiscal 2021.
The intent, he said, was to provide the “hammer” needed to convince cities and counties to come to the table and look for real solutions to the problem of soaring property tax rates.
Local government entities countered that the measure would hamstring their ability to provide public services.
Those complaints bore fruit in the Senate, which changed the bill from a temporary freeze to a three-year, 4 percent cap. The amended bill then died on a 24-11 vote.
Three late-session efforts to increase the homeowner exemption or the property tax circuit breaker also stalled.
However, the Legislature did recommend that an interim committee be created to take an in-depth look at this issue.
Study, study, study
As happens every year, the Legislature punted on several major issues, either because they were too complex, too controversial or simply too time-consuming to address during a three-month session.
They proposed interim committees to study several of these matters, including: Idaho’s property tax structure and how local taxing districts expend the monies they collect from property owners; public school content standards; and state funding for higher education, “with the goal of making higher education more accessible and affordable to Idaho students.”
These committees need to be approved by legislative leaders. They were supposed to discuss the issue last week, but coronavirus and other matters took precedence. House Speaker Scott Bedke said the meeting will likely be rescheduled to April or May.
Any recommendations coming from the committees will be forthcoming in the 2021 session.
Dog bites man
The most shocking outcome of the 2020 session was when the Republican-dominated Legislature adjourned without spending an estimated $80 million that was specifically earmarked for tax relief.
The money comes from sales tax collected on online purchases.
In his State of the State address, Gov. Little suggested that $35 million of that be used for some form of tax relief.
House Speaker Scott Bedke, R-Oakley, upped the ante to $48 million. He proposed raising the grocery tax credit to $135 per person — enough to offset the impact of the 6 percent sales tax on food for virtually all Idaho taxpayers, while keeping the tax in place for nonresidents and tourists.
Although the bill was sponsored by the entire House Republican leadership team, it never gained any traction in the Senate. The legislation languished in the House for more than a month while negotiations took place, but eventually died when the House adjourned.
Behind-the-scene discussions continued until the final day, but no other tax relief proposal advanced — meaning the account will continues to grow until next year.
The incremental erosion of state general funds continued, as transportation advocates grabbed another $18 million in tax revenue to address Idaho’s highway maintenance needs.
Several funding proposals were introduced this session, including a plan to shift $272 million in state savings into a new endowment-like transportation account; a second bill doubling the amount of sales tax revenue going to the Idaho Transportation Department; and legislation rebating $12 million in sales taxes paid on road construction materials.
The endowment bill stalled because of technical issues, but may come back in revised form next year. The rebate bill also didn’t advance.
An amended version of the sales tax bill was the final bill passed during the 2020 session. It awaits the governor’s signature.
The measure has a fiscal impact of about $18 million per year. The money would be divided 60-40 between ITD and local highway districts; the local funding must be used for bridge maintenance and replacement.
Dodging a bullet (until next year)
Ever since the Medicaid expansion initiative passed in 2018, lawmakers have talked about shifting part of the cost to counties.
An interim committee recommended that counties chip in up to $10 million, or roughly a quarter of the state’s 10 percent matching share. The joint budget committee left an $8.5 million hole in the Medicaid budget for county funding.
House lawmakers, however, never agreed on a specific proposal. After debating the issue behind closed doors for weeks, two bills were finally introduced in March.
Both bills eliminated the county indigent and state catastrophic health care programs, and shifted about $12 million in sales tax revenues from the counties to the state.
Neither proposal, however, came up for a floor vote — leaving the issue unsettled for another year.
The Legislation did agree to shift hospitals and nursing homes from a fee-for-service Medicaid model to an outcome-based model intended to reward them for improved health outcomes. The bill, which has been signed into law, is expected to save the state nearly $19 million per year.
A matter of degrees
Lawmakers approved and the governor signed legislation allowing Lewis-Clark State College to offer graduate classes or programs, with approval from the State Board of Education.
LCSC President Cynthia Pemberton said the move will help the college grow strategically and meet industry needs for years to come.
The Legislature also approved an additional $531,000 in funding for the Lewiston school, over and above the governor’s recommendation, to give it more flexibility to meet the 2 percent base budget reduction ordered for all nonpublic school general fund agencies.
The other four-year institutions weren’t so fortunate. The House rejected two higher education budgets and nearly rejected the third, which only provided a $1.05 million, 0.3 percent increase in state support.
Conservative Republicans objected to what they perceive as excessive administrative salaries and expenditures that don’t focus on the schools’ core mission.
Rep. Mike Kingsley, R-Lewiston, voted against one of the budgets. Rep. Thyra Stevenson, R-Nezperce, voted and debated against it twice.
House Minority Leader Ilana Rubel, D-Boise, graded her Republican colleagues with an “F-” for their higher education support this year.
“There was a total lack of support for higher education,” she said. “The failure to pass even a starvation-diet budget sends a terrible message to students.”
A year after the House rejected a Democratic proposal to abolish child marriages in Idaho, lawmakers supported a Republican bill that accomplished the same goal.
The measure set a minimum marriage age of 16, and prohibits anyone between the ages of 16 and 18 from marrying someone who’s more than three years older.
The House approved the measure 55-2; it passed the Senate 32-0 and awaits the governor’s signature.
The most significant revamp of the state sales tax distribution formula in more than 20 years passed the House and Senate with minimal opposition and was signed into law.
Rep. Jason Monks, R-Nampa, worked on the legislation for about five years. He modified it repeatedly during that time to address various objections. This year’s final version received no negative testimony.
The bill will gradually equalize sales tax distributions to Idaho cities on a per-capita basis, as opposed to the current, highly variable scheme that reflects population levels and market values in Idaho more than 50 years ago.
The shift takes place over time. Although some cities — including most communities in north central Idaho — will see slower growth in funding, they should all continue to receive at least as much funding as they do today, so long as gross sales tax receipts don’t decline.
“I think it’s a significant piece of legislation,” Monks said. “It’s a big deal — especially in communities that are experiencing high property tax increases. This will get more money into their budgets.”
At 75 days, this tied for the fourth-shortest legislative session in the past 20 years.
A total of 559 bills and 70 resolutions were introduced. The six-year average is 541 and 72, respectively.
As of Friday afternoon, Gov. Little had not vetoed any legislation. However, a number of bills were still awaiting his signature — including controversial measures related to transgender athletes, abortion, changing birth certificates and anti-affirmative action efforts.
Spence may be contacted at email@example.com or (208) 791-9168.