Gov. Brad Little kicked off the 2021 legislative session on Monday with his annual State of the State and Budget Address, outlining his expectations and priorities for the coming year.
The governor’s proposed budget for the next fiscal year includes $455 million in tax relief, $250 million to go toward public health infrastructure, and a 16 percent increase in funding for public education, historically Little’s top priority for the state.
“I’m proposing a ‘no frills’ budget for Fiscal Year 2022,” Little said in his address, which he delivered virtually via video.
Little’s tax relief proposal includes $295 million in one-time tax relief and $160 million in permanent tax cuts. When combined, the $455 million tax cut would be one of the largest in Idaho’s history, the governor noted in his address.
About $105 million of the $160 million would come from the state’s dedicated tax relief fund, which is funded by state sales tax collected from out-of-state online retailers. Online sales tax receipts have been “way up this year” amidst the pandemic, Alex Adams, administrator of the governor’s Division of Financial Management, told reporters in a post-address press conference.
“Curbing government spending and returning taxpayer dollars should be the perpetual mission of public servants,” Little said in his speech. “I look forward to working with my partners in the Legislature to get tax relief across the finish line for our citizens.”
In a separate news conference Monday, the Legislature’s Democratic leadership criticized the governor’s tax relief proposal, arguing that setting aside internet sales tax revenues rather than distributing them in part to local governments forces cities and counties to rely more heavily on property taxes. Last year, Rep. Sally Toone, D-Gooding, co-authored an unsuccessful bill that would have shared a portion of the sales tax revenue from out-of-state online retailers with cities, counties and taxing districts.
Under Little’s proposed budget, Idaho would end the year with a surplus of $185 million. The proposal also calls for putting $230 million into the state’s rainy day fund.
In the Democrats’ news conference, House Minority Leader Ilana Rubel suggested that the state should not be budgeting for such a significant surplus in the current moment.
“You have to question whether ‘surplus’ is an appropriate word to use, or whether we should more accurately call it a systematic underfunding of education, infrastructure, and other needs,” Rubel said.
Here’s what else the governor is asking the Legislature to fund this year.
‘Building Idaho’s Future’
On Monday, Little unveiled a plan he calls “Building Idaho’s Future.” The governor described the investment package as “a new plan to put more money back in the pockets of hardworking Idahoans and make strategic investments to propel our state even further ahead in prosperity.”
The proposed package includes:
- $126 million for state and local highway infrastructure projects, rail infrastructure and community airport improvements
- $60 million for water and agriculture infrastructure
- $35 million for “a competitive broadband grant program with an emphasis on bringing access to rural unserved or underserved households”
- $20 million “to enhance literacy and other educational outcomes given the education disruptions associated with COVID-19”
- $4.8 million in career technical education
- $5.5 million toward higher education
- $964,000 for Idaho State Police
- $96.2 million in capital construction projects
- $15 million in federal funds for cash grants to small businesses and individuals “disproportionately impacted” by the COVID-19 pandemic
“Let’s keep our state on this strong economic trajectory, together,” Little said in his address. “Now is the time to make meaningful investments.”
Little’s proposed budget also includes upwards of $250 million in funding for public health infrastructure in light of the COVID-19 pandemic. That includes $1 million to increase nursing capacity through postsecondary nursing programs and $900,000 to fund 15 new medical residents in the state in an attempt to address the shortage of physicians across Idaho. Idaho has the second-lowest number of physicians per capita of any state in the country, according to the American Association of Medical College’s 2019 State Physician Workforce Data Report.
The proposal also includes the full funding of Medicaid expansion—a $12.5 million cost-share with counties “to capture the savings counties have realized from Medicaid expansion”—along with $7.4 million in funding for state veteran homes and $450,000 for community-based substance abuse recovery centers.
Beyond the COVID-related literacy investments included in the “Building Idaho’s Future” plan, Little’s proposed $250 million in funding for public schools includes $44.9 million for growth in the state’s K-12 career ladder, along with an additional $9.7 million for the state’s Advanced Opportunities program, which allows high school students to earn college or technical credits at no cost.
The governor’s proposed education budget also includes $1.2 million to place mental health clinicians in rural schools and $10.6 million to go toward rising health insurance costs for school districts