2nd Regular Session - 61st Idaho Legislature
Prepared by Joe Stegner, Special Assistant to the President for State Governmental Relations
BUDGET ISSUES OF INTEREST
- Change in Employee Compensation (CEC) (Supported / Passed) The Governor recommended a 3% one-time merit based CEC for all state agencies. The Legislature passed a 2% on-going, across the board, CEC. JFAC only funded 60% of the CEC for higher education from the General Fund requiring 40% of the CEC increase to come from dedicated funds. For additional information about the CEC, see Status of the 2% CEC for Colleges and Universities – FY 2013.
- IGEM (Idaho Global Entrepreneurial Mission) (Supported / Passed) The Governor recommended and the Legislature passed this new $5 million research and business development initiative.
- $2 million to be shared by the three state universities for research at the Center for Advanced Energy Studies (CAES) based in Idaho Falls.
- $2 million to fund new competitive research grants at the three state universities.
- $1 million to the Idaho Department of Commerce to fund new business development grants.
- Enrollment Workload Adjustment (EWA) (Supported / Passed) The Legislature funded the Governor’s request for the EWA appropriation for higher education. This is the first EWA appropriation from the legislature in several years.
- Occupancy Costs (Supported / Passed) The Legislature supported funding for Occupancy Costs but only appropriated approximately one- half of the requested accumulated costs for the operation of new buildings and facilities. This on-going appropriation is the first increase in Occupancy Costs for higher education in several years.
- Higher Education Stabilization Fund (HESF) (Supported / Failed) The Governor had requested a $5 million payment to the newly created HESF as a “rainy day” fund to protect higher education against future economic downturns. A JFAC committee motion to fund a lesser amount of $1 million in this new state savings account was rejected.
- The Legislature appropriated an 8.6% General Fund increase for Colleges and Universities for the next fiscal year (FY 2013).
LEGISLATIVE ISSUES OF INTEREST
- Rangeland Center (SB 1291) (Supported / Passed); Provides for the creation of the RANGELAND CENTER at the University of Idaho in Idaho Code. Sponsor: Sen. Bert Brackett. Passed both Senate and House and signed by Governor.
- Charitable Endowment and Trust Clarification (SB 1314) (Supported / Passed); Clarifies how charities and trusts are required to invest and spend endowment funds. Sponsor: Darin DeAngeli. Passed both Senate and House and signed by Governor.
- Land Board Restricted from Operating Business (HB 495) (Opposed / Failed); Restricts the Idaho Land Board from operating commercial businesses on state endowment lands. Sponsors: Rep. John Vander Woude, Rep. Grant Burgoyne and 12 additional legislators. Passed the House and died by committee vote in Senate Natural Resource and Environment Committee.
- Two additional House bills that would impact the authority of the Land Board were printed but not given committee hearings in the House. HB 477 dealt with Cottage Site and Home Site Lands and HB 612 revised the Powers and Duties of the Land Board.
- State Expenditure Cap and Tax Reduction (HB 559) (Opposed / Failed); Lowers the statutory cap on state budgetary expenditures and dedicated budget savings to various tax reductions. Sponsors: Rep. Mike Moyle, Rep. Bob Nonini and 3 other House members. Supported by Idaho Farm Bureau, Micron, and IACI. Passed by House and then held by Chairman Tim Corder of Senate Local Government and Taxation Committee. This issue is expected to return next year.
- 8 in 6 Public Education Program (HB 426 as Amended) (Neutral / Passed); Creates a state program to pay the cost of summer and overload (extra) classes for junior and high school students. Sponsor: Rep. Steve Thayn. Passed the House, amended in the Senate, passed as amended by Senate and House and signed by Governor.
- Reduction of Maximum Income Tax Rate (HB 563) (Opposed / Passed); Reduces the maximum personal and corporate Idaho income tax rate from 7.8% to 7.4% and reduces on-going state revenues by $ 35.7 million annually. Sponsors: Rep. Mike Moyle, Sen. Chuck Winder and supported by Governor Otter. Passed by House and Senate and expected to be signed by Governor.
STATUS OF THE 2% CEC FOR COLLEGES & UNIVERSITIES - FY2013
The appropriation bill for Colleges and Universities, House Bill 659, definitely includes an on-going 2% Change in Employee Compensation (CEC) for higher education employees; however the State General Fund is only covering about 60% of the cost of the increase. The bill provides the spending authority for the other 40% from dedicated funds and, in the case of higher education that dedicated fund is student tuition. Technically then, the ability of the University to provide a 2% CEC for the next fiscal year depends on the approval of a sufficient increase in student tuition to cover the 40% of the increase that is not covered by state General Funds. That approval is not expected to be a problem, and all of the 4 year institutions of the state have already announced expected tuition rate increases that will easily raise the amounts needed to pay for the dedicated fund portion of a 2% CEC.
The $35.7 million income tax cut that was passed by the legislature on the last day of the session does not affect next year’s 2% CEC for Colleges and Universities (or any other state employee group, for that matter) because there are sufficient estimated revenues to pay for both the CEC and the tax cut.
Likewise, the appropriation for “salary based apportionment” for public school teachers (state money allocated by statutory formulas to school districts to pay teacher salaries) will not affect the appropriated CEC for higher education. The appropriation for salary increases for public school teachers is considerably more complicated than it is for other state agencies, particularly after the significant changes implemented for public school funding (the Luna bills) passed by last year’s legislature. Because of those changes, and additional changes that were made by the legislature this year, public school teachers are now eligible for “pay for performance” bonuses and most teachers will receive an increase in pay next year as a result of this new methodology; however there was no CEC appropriation for public school teachers made this legislative session. The process for awarding these “pay for performance” bonuses is determined partly by state law but individual school districts and school boards will ultimately make many of the final determinations.
There is no connection between the public school appropriation and the higher education appropriation and they don’t affect one another and a more detailed explanation of the public school teacher appropriation would require considerably more time. But now that the legislative session is over and all of the budgets are set, the 2% CEC for Colleges and Universities is now firmly set in law and is only subject to the normal concerns about the health of the economy for the next year. And by all accounts, the state economy looks better than it has in several years.