2009 LEGISLATIVE SESSION

May 7, 2009. The End Game. After numerous blusters, threats, guffaws, grimaces, and posturing that would make a fifth-grader green with envy, it appears the majority party has finally agreed to agree on a deal the provides a way home. Essentially it generates a limited amount of additional funding for transportation (about $54 million in all) beyond the two bills passed earlier in the session, the repeal of the ethanol exemption and the omnibus increase in DMV administrative fees; notable no gas tax increase made it to the finish line. All in all it gives both the House and Senate leadership bragging rights over certain features, and saves face for the Governor to a lesser extent. Though the final figure is substantially less than the $70 - $80 million figure he floated last week ( and the $125 million suggested earlier the session), since the money flows directly to State transportation funding skirting the usual distribution formula, it is the equivalent of $87 million in gross transportation revenues.

The most troubling feature of the package is that almost half the funding, some $21 million, is raised be removing the funding received by the Idaho State Patrol and Parks & Recreation from the present transportation source, and conditionally shifting it to the general fund. This feature is delayed until July I of 2010, leaving the intervening period for a newly created task force to identify a source of dedicated funding, thus preventing the need to tap the general fund. Right now general fund dollars are in very short supply and without a source of dedicated funds, we would have one more shark in the general fund pool competing for its shrinking dollars. As in typically the case, compromise solutions, though vastly superior to no solution, make all stakeholders nervous. This one certainly satisfies that criteria. In any event if there are no last minute glitches we should be out of here either late today or early tomorrow, barely avoiding the stigma of being the longest running legislative session in Idaho history. Praise the Lord.

April 30, 2009. Groundhog Day? It’s Wednesday morning in the House chambers. Some members are cleaning out their desks, others are reading the morning newspapers, and others are on the computers, responding to constituent e-mails. Republican leadership left the third floor about twenty minutes ago, heading over for a last (?) face to face with Governor before executing their version of the nuclear option, unilateral adjournment, leaving the Senate still in session and the Governor’s transportation funding requests unfulfilled. Unless the Senate or the Governor throws in the towel, it will start all over again on Monday. Bill Murray should be brought in as a technical advisor.

Crystal Balls ‘R Us. It’s now Thursday morning and I'm writing this from a nearly empty House floor. The Senate is in session across the way and a handful of Democrats, me included, are dealing with constituent issues, responding to e-mails and wondering when sanity will prevail. It appears the House/Senate impasse is still alive and healthy, though I've just recently heard a few snippets that they may be working on a compromise. It purportedly builds on the economic trigger amendment I offered about a month and a half ago by adding a calendar trigger as well - whichever triggers first (or last depending on how it’s worded). That way each side gets to save face, they hold hands, dance in a circle, and sing Kumbaya. A joint House/Senate majority leadership press conference is scheduled for 3:15 this afternoon and (assuming they actually reach an agreement) odds are its primary purpose is to announce this compromise. So sayeth Nostradamus.

April 23, 2009. The Creature from the Black Lagoon. In an effort to craft a going home bill that would satisfy the Governor’s demand for increased transportation funding, the House majority leadership has put forth a four part proposal that is projected to raise about $80 million annually. The first three parts are reasonable ideas put forth earlier in the session and now resurfacing. The fourth is reminiscent of some horror movie protagonist, arising from the swamp of bad ideas, covered with unknown policy permutations, and dripping with unforeseen consequences to be visited on unsuspecting future taxpayers and legislators.

The trio of non-threatening ideas includes removing the ethanol/biodiesel tax exemption which produces about $18 million additional fuel tax revenues; the next consists of nominal increases to a smorgasbord of routine automotive related fees administered by DMV – this produces about $12 million. The third regroups the car and light truck registration fees to a broader number of vehicles, producing about $3 million in additional revenues without actually changing the fees themselves – essentially it moves the higher registration numbers onto older vehicles increasing the overall take.

The fourth part is only roughly defined and, as of late Thursday afternoon, was still lurking in the swamp. In general outline it would siphon some 2% of general fund revenues, i.e., income and sales tax, to be used for transportation funding. This would be a major change in policy since historically transportation funding has come exclusively from related activities such as fuel, registration, DMV fees and the like. Without an increase in the income tax, the sales tax, or both, this would inevitably produce a further shortfall in revenues for schools, corrections, public employees and any and all governmental functions dependent on general fund revenues. At present revenue levels this amounts to about $50 million annually, and would grow when and if revenues grow. As envisioned it would be triggered by an upturn in the economy and would be funded by getting in line with similarly funded programs. This would be one more bite out of the general fund revenues triggered by economic growth. In effect we would be creating a body of “entitlements” that would continually reduce the discretionary funding available for our “meat and potato” programs. This approach creates a real risk down the road of deficit spending in these areas, guaranteeing future tax increases in order to meet our balanced budget mandate. I can’t see the creature clearly yet, but I can hear it gurgling and sloshing as it wades ever closer. Head for high ground and hang on to your wallets.

April 16, 2009. Who let the Dogs Out? It’s early Thursday morning as I write this entry; as you may know by now, the morning Statesman ran an article that the “big dogs” met yesterday and sorted out who gets which bones and which bones get buried and forgotten. If accurate, we may be getting out of here sooner rather than later. If the majority party can keep all the young pups in line, they clearly have all the votes they need to pass anything – the sticking point to date has been a difference between the House and Senate leadership as to which ideas survive and which get buried, perhaps to be dug up in a future session, gnawed on for a bit to clean them up and then offered to the pack for consideration and, hopefully, consumption.

Notably glossed over in the news article was the fate of the Governor’s fuel tax increase. One scenario surfaced late yesterday; it was based on a Senate amendment to one of the House transportation bills still on their amending order; it proposed two consecutive 3 cent increases which would produce about $53 million additional transportation dollars, presumable to be split 62/38 between the Idaho Transportation Department and Local highway districts. This would generate about $33 million for the state to maintain their system and about $20 million for local government, a far cry from what the Governor was looking for a year ago.

In contrast, the House Leadership, fresh from their facedown with the Senate and the Governor, and still enjoying their perceived success in the junkyard scramble, appear to be prepared to go home with the fuel tax bone buried deep. Except for the repeal of the ethanol subsidy and a pittance from the Governor’s one-time discretionary stimulus funds, no additional funding proposals will be considered. Coupled with their success in insisting on a 5% cut for state employees, it appears the economic doomsday clique will carry the day. Given the effect of the legislation they have spawned to date, it may well be a self fulfilling prophecy.

April 10, 2009. A Tale of Two Bills. Thursday and Friday this week saw the two remaining transportation bills come to the House floor for debate and vote. The first was H 135 and provided for a 2 cent increase in the fuel tax which would raise some $17 million to be used for highway maintenance programs statewide. The second was S 1186 from JFAC and authorized an additional $82 million in GARVEE bonding for construction, reconstruction and maintenance of Idaho’s portion of the interstate highway system. H 135 went down to defeat 32-37; S1186 survived handily 39-29. In the case of the former bill House Democrats split 4-14; on the latter they supported the bill 18-0. “Why the difference? “, I was asked this morning when I spoke to the Boise Metro Chamber.

The first bill imposed an additional tax on fuel at a time when the economy is still heading down and people are still losing jobs. At the beginning of this session the House Democratic caucus took the position that even if the need was great, the timing was lousy. The latter bill required no new taxes and was a continuation of a longterm program designed to preserve and protect our interstate system for the next generation. A policy had been clearly articulated, funded and planned. It simply made good sense in this case to stay the course. The other bill was essentially a stop gap, shoot from the hip, we need to do something, no matter how puny it is. Early in the session we opted for “people over potholes.” Nothing has changed since that warrants changing that position, though we have repeatedly left the door open for the Governor, seeking to explore ways of closing the gap between our positions to our mutual advantage, and, more importantly, the benefit of Idaho citizens. We made it clear that we would be willing to soften our position if we could get his commitment on measures we saw as priorities. Among these were protecting our public schools, enhancing higher education’s ability to meet the increasing demand by workers for re-training preserve jobs, and better protecting job holders in both the public and private sectors. We went away empty handed every time.

It is clear to us, and hopefully is equally clear to the other players in this legislative session end-game, that the House caucus can help in getting done the things that need doing. With 18 players on our team, and so long as there continues to be a fault line (or two) running through the majority caucus, these 18 votes can make a difference. Without our support, H135 failed; with our support S 1186 survived. If the chief executive is really set on making things happen, the “can-do” caucus in the House is ready willing, and able to help.

April 3, 2009. Whack-a-mole in the House. On Tuesday this week the House took up the sole remaining transportation funding bill on its amending order. The process is somewhat arcane with the body dissolving and reconstituting as a committee of the whole; though it sounds ominous, nobody is transformed, no puddles are scattered about the chamber, but magically, we no longer have a Speaker, but rather a chairman of the committee of the whole. Once constituted the various bills are ripe for change; in this case H 135 from the Transportation chair, JoAn Wood, was offered up with eight possible amendments – an unusually high number, but well below the reputed record of twenty five offered several years ago when the House was faced with raising the sales tax following the dot-com bubble burst. Like the arcade moles, they popped up throughout the morning debate with all but one roundly dispatched by the mallet wielding members of the body.

Branden Durst (D- Boise) easily garnered the award for the most creative amendments; essentially they grafted local option authority into the bill, complete with sideboards requiring voter approval, limited voting dates, detailed project proposals, and the like. It gave local government, including transit authorities the opportunity, should they convince their local voters to support them, to fund and develop public transit programs, traditional road and bridge projects, and where desired, public infrastructure projects totally unrelated to transportation. Civic centers, parks, city halls, anything that is a legitimate governmental infrastructure project would have been within the scope of the bill. Bottom line is that it would have put the decision making authority in the hands of locals for tax programs beyond the existing property tax authority they currently enjoy. His idea was light-years beyond merely thinking out of the box. As expected it was soundly whacked back into the box.

The balance of the amendments restructured the fuel tax increase by varying amounts or over varying periods; the largest was five cents immediately, the smallest was the two cents in the original bill. Each penny is projected to bring in an additional 8 to 9 Million dollars annually. None of them received sufficient support to pass. The only mole that got to stay out of his hole was one that changed how the funds being raised would be distributed – it change the bill’s language from a 60/40 split between State and local highway agencies back to the 62/38 split presently applying to fuel tax revenues – pretty momentous, huh?

The bill itself, as amended, will be coming back for an up or down vote on Tuesday the7th; based on what happened this week I expect it will get whacked soundly and expire on the floor of the House. With the economic downturn still at full throttle, legislators are extremely reluctant to raise taxes or fees of any kind, particularly with about $400 million still untouched in our rainy day funds. A cynic might suspect that the reluctance to commit to using those funds now is somehow tied to the fact that next year is an election year and if we run short then, after having committed those funds now, it might force sitting legislators to consider a tax increase in an election year – oh the horror of it.

March 27, 2009. The Wrecking Crew Visits the House. In August of 2006, a joint special session of the Legislature, called by then governor Risch, set in motion a chain of events that has resulted in the gradual dismantling of Idaho’s public education system. Idaho’s Constitution, from its inception, imposes upon the Legislature a duty to”establish and maintain a general, uniform and thorough system of public, free common schools.” The special session of 2006 removed the ability of school district’s to use local levies for funding their routine maintenance and operations. The $ 250 million raised in this way was replaced with an additional 1 cent sales tax, to be collected by the state and distributed to the schools. Even in the relative strong economic climate of 2006 this replacement left the schools $ 50 million short. “Never fear’ said the supporters of this change, for we will always protect public education now and into the future. Well that future is now, and we are at the school house steps with wrecking balls and crowbars.

The three bills crafted in the House Education committee starkly illustrate the contrast between the right way and the wrong way to meet and deal with the severe economic challenges facing all Idahoans. H 252, the first to come forward, arose from a bipartisan committee, inclusive of stakeholders in our system of public education, and spearheaded by Dr. John Rusche (D-Lewiston). It was a result of difficult negotiations, compromise, and consensus building. It passed on the House floor unanimously. The next two bills, H 256 and H 262, came from closed door meetings involving only politicians, with no bipartisan involvement, and no stakeholder input. Guess how they fared on the House floor? Heated debate, parliamentary maneuvering, the specter of lawsuits in the offing ricocheted off the walls of the House Chambers. Both bills passed, an inevitable result given the dominance of the majority party in the chambers, but at what cost to our schools? If, in fact, these steps were truly necessary to deal with the current crisis, why are they permanent in nature, why is there no sunset to restore the status of the affected programs when the economy recovers? This lack, more than anything, makes abundantly clear what the unspoken agenda is – to bend school districts to further obedience to the vision of the legislature and continuing the erosion of local control. Is this your vision of Idaho? It’s not mine.

March 22, 2009. When Worlds Collide. All you Sci-Fi B-movie fans out there may remember the one where the Earth, Moon, and some other planet were all on a collision course with the whole of mankind at risk of annihilation. A somewhat scaled down version of that classic is playing out in the House this week with the upcoming votes on the Governor’s scaled back Transportation initiative. Our chief executive has made this the centerpiece of his legislative agenda this session, the House majority leadership has agreed to ensure it gets a hearing, but no commitments beyond that, and the House minority caucus is solidly opposed to increasing taxes and fees on Idahoans as the economy continues to tank. I agree that the Governor has a great plan - however, I also believe his timing is off by a year or two. I am hearing from many constituents on transportation generally and the majority are frustrated that there is absolutely no movement on public transit. If the governor would help move that forward, making it part of the mix, he would have a whole lot of votes from our caucus for his other proposals.

Kaboom. Well only one of the worlds collided with the House today (Thursday the 19th); H246 – the revised fuel tax bill with a 7 cent, 3 year phase in, went down to defeat 43 to 27 after vigorous debate. To this observer it appeared the most telling sentiment was the reluctance on many of the legislators, on both sides of the aisle, to impose additional taxes on Idahoans struggling to hang on to their jobs and homes in a down economy. No one disagreed with the need to develop additional funding for our transportation system – many questioned whether this was the time to start. H247 – the bill substantially increasing registration fees was pulled from the 3rd reading calendar. The House Ways and Means committee sent to print a revised version of that bill, directing that this time it be scheduled for hearing in the House Transportation committee. In addition to some technical errors in the bill as printed, some additional changes were made to the categories of registration fees by vehicle age.

GARVEE Bonding. I believe the Governor will get the solid support from our caucus - some reluctantly, but all realizing that we need to see the program through - a midcourse hiccup would not be in anyone's interest. AdaCounty in particular stands to benefit, given that a number of major local projects are on the priority list if the additional bond financing is authorized. That bill will be a straight appropriation bill coming from JFAC somewhat later in the session. If it is not approved, the Governor has stated he will shift the Federal stimulus moneys earmarked for transportation to Garvee projects, leaving the projects currently listed for those funds high and dry. It may well be the red veto stamp will come out as well if that bit of information doesn’t change some votes. It is clear the transportation needs, though lacking any help for public transit, is the Governor’s top priority, topping education, both pre-k and higher education, Health issues, substance abuse, and all the other myriad of bread and butter concerns facing all of us. Each of us, whether in the legislature or not, will have to decide whether or not they agree with such a prioritization.

March 13, 2009. The Gifts are Unwrapped. Governor Otter released his recommendations yesterday on how the Federal stimulus funds for Idaho should be allocated. As a member of minority leadership in the House I had an opportunity to meet with him and members of his staff prior to the release. He gave us a brief heads up on what he was proposing and why. In many cases, if not most, the funds came to Idaho prepackaged, limiting their use to certain programs, such as transportation, education, Medicaid and the like. He also made it clear that his allocations further down the food chain were not without conditions themselves. In particular, his recommendations for project funding in the transportation package are conditioned on the Legislature’s passage of further bonding authority for the Connecting Idaho program, commonly referred to as the GARVEE program. If that passage is not forthcoming, he intends to ask the Idaho Transportation Department (ITD) board to do a rerun on their current project list with the goal of moving the underfunded Garvee projects to the head of that list, displacing the projects already there - so much for an independent, nonpolitical transportation board.

His views on Education funding were most disappointing to the minority caucus. While the stimulus moneys are all being made available, he is endorsing Superintendent Luna’s “cut to the bone” budget recommendation for FY 2010 while simultaneously taking all the rainy day stabilization funds off the table. This leaves local school districts with some rather stark options – either cut back programs, grow class sizes, lay off teachers, raise local property taxes, or a combination of some or all of the foregoing. These Stabilization funds were created to deal with economic downturns – now that we are definitely in one, Luna , with the Governor’s support, wants to hang on to every dime, because it might get worse next year and the years after. It’s like a mother or father with a sick family, choosing to not spend any of their savings for medical emergencies because – we might get more sick next week or the week after. This is real leadership when Idaho families are hurting?

March 6, 2009. Another Victim of the Killing Grounds. On Monday the 2^nd of March a tax collection measure was introduced before the House Revenue and Taxation committee proposing that Idaho take very preliminary steps towards joining the multi-state Streamlined Sale Tax Project (SSTP). At present there are 28 member states with additional ones progressing towards full participation. The purpose of the project is to streamline the sales tax process between and among all 50 states to achieve sufficient uniformity to allow for the efficient collection of sales tax owing from on-line internet retail purchases.As so often happens, this proposal, put forward by Rep. Bill Killen (D- Boise), which would have protected Idaho business from unfair competition, died in committee on a 10-7 vote.

At the present time the collection of taxes from on-line sales is a hit or miss proposition with some major retailers participating while most do not. Under current law, unless the retailer has a significant nexus – a substantial physical or business presence in the purchaser’s home state, there is presently no way to compel the payment and collection of the sales tax otherwise due and owing – save for any voluntary reporting and payment by the purchaser when they file their annual income tax return. Tax experts asked opine that little if any revenues are realized in this fashion.

The measure would have formally directed Idaho’s Tax Commission to observe the STTP’ working group meetings and decisions and return next session with specific legislative proposals allowing Idaho to begin the process of joining the project as a voting member. A commission appointed by the Governor would act as an advisory authority during the preliminary stages with the final say resting with the Legislature before any formal commitment was made. Earlier estimates put Idaho’s loss of revenue at $50 million annually. Inasmuch as on-line retail sales are continually growing, a failure to capture the tax revenue due to the state will result in an ongoing erosion of our general funds as more and more purchases shift from local “brick and mortar” retail outlets to out of state on-line outlets. Equally important is the harm to our local businessmen who will suffer a like erosion in sales, profits, jobs, and potentially their very business.

The House Revenue and Tax committee enjoys the dubious distinction of being the killing ground for almost any bill which includes the word “tax”. The eighteen member committee includes every leadership member of both parties and, on the majority side, the most strident supporters of the “all taxes are bad” and “all government is bloated” brigade. While conservatism in the fiscal arena clearly does have its merits, when it leads to the rejection of efforts to actually collect taxes due and owing under the hubris of “all taxes are bad”, it simply puts off the day of fiscal reckoning. Even worse it preserves a competitive disadvantage for local merchants at a time when we should be helping them not only compete, but survive. We are all victims of the misguided vote.

February 27, 2009. The Age of the Internet. The House Judiciary and Rules Committee is often the frontline for addressing issues blending, and hopefully reconciling, the new frontier of cyberspace with the old frontier of the criminal justice system. Two bills coming before the committee recently made that abundantly clear. H 60 was one of these bills – it dealt with the issuance of administrative subpoenas to be issued either by the Attorney General or a county prosecutor in order to obtain the subscriber and location of a particular computer which has been used to access internet child pornography exchange sites. It does not allow for the interception of the content of any particular communication, being limited to who signed up for the service and their address. However, with this crucial information, an investigator can contact the subscriber and determine whether or not they are a knowing participant in the proscribed trafficking of child pornography. If that proves to be the case, the next step follows the traditional approach, namely a search warrant issued by a magistrate judge, based solely upon a showing of probable cause that a criminal violation has occurred, and stating with particularity what is subject to search and seizure. In a sense the new law is akin to an investigator finding a phone number in a bookies black book and working backwards in the system to determine who has that number and where it is physically based. It’s simply one more example of adapting our justice system to changing technology while, hopefully, continuing to preserve our very special and unique civil rights guaranteed by the constitution.

February 20, 2009. To Tax or Not to Tax, That is the Question. With apologies to Shakespeare, the burning question facing the Legislature this week, and in the weeks to follow, is whether or not to impose any new taxes or fees on Idahoans. The governor’s long awaited transportation funding bills were introduced in the House Transportation committee this last week and sent to “print” – setting them up for public hearings in the near future. Since that time a virtual deluge of legislator sponsored bills have also been introduced; some of these mirror the Governor’s bills, but with differing amounts or timing for fuel tax increases and registration fee increases. Others deal with the issue of rental car excise taxes, the removal of the ethanol subsidy, the funding for the State Patrol, and other transportation related matters. Fundamental to all of these proposals is whether or not it is an appropriate time to raise any transportation related taxes or fees. To date, the House Democrats have consistently opposed raising these taxes, not because the proposals are unnecessary, but because of the timing. With so many Idaho families living on the edge financially, an increase of this scope will affect every one of them. Whether or not the President’s stimulus bill will afford Idaho with road maintenance dollars is still in dispute. It may be another week or two before that question is answered; until it is, it would be irresponsible, no matter how compelling the need may be, to saddle all Idaho families with this additional financial burden.

February 13, 2009. The Rubber Meets the Road. The Governor’s long anticipated transportation package hit the House this week. What started as a massive, nearly 200 page bill has morphed into six separate bills dealing with distinct elements of his original proposal. Reaction has been mixed; some legislators see it as a long overdue first step in catching up with long overdue highway maintenance; others see it as poorly timed tax and fee increases being imposed on struggling taxpayers at the worst possible time. While virtually no one opposes the increase in the rental car tax, or the removal of the ethanol subsidy, the fuel tax increase and registration fee increase have been with varying degrees of skepticism on both sides of the aisle. The Governor has clearly made this his flagship program for the session and a great deal of political capital will be expended by him in bringing it safely to harbor by session’s end. The House minority caucus remains firm in opposing these elements given the worsening economic conditions, the job losses affecting working families throughout Idaho, and the very real possibility that the Federal stimulus package may provide an independent source of funds. Life is tough enough right now without adding further injury to taxpayers and their pocketbooks.

The Attack on Education. Thursday morning Rep. Bob Nonini (R-Coeur d’Alene) proved true to his home cities namesake – the heart of an awl. His package of bills rolls back the authority of local school districts by several decades, essentially removing much of the authority they currently enjoy in managing their local affairs and freezing it in statute. They also contain provision stripping funds available to the local districts, not simply as a matter of budget reductions due to the current revenue shortfalls we are experiencing, but by permanent changes to funding formulas that will remain in place even when our economy and revenues recover in the future. While stripping funding and local control authority from the locally elected trustees, it increases funding available to charter schools. The message could not be clearer – the majority party seeks to dismantle at worst and hobble at best our public school system while shifting more school dollars to the charter schools. The tail is starting to wag the dog.

Change is coming. I was part of a group of Minority party leaders who met with Superintendent Luna on Friday morning, together with Bert Marley and Robyn Nettinga of the IEA. By the end of the morning, Nonini and the other sponsors agreed to put a hold on further hearings, partly in light of the tremendous pushback they were getting, partly in response to the news that Obama’s stimulus bill was about to become a reality, and partly due to some significant problems with the bills themselves, namely a lack of sunset provisions and the elimination of continuing contracts

February 5, 2009. Treading Water. Activity in the House is akin to treading water rather than advancing down the pool. While the Joint Finance & Appropriations Committee (JFAC) is continuing to hear agency proposals on a daily basis, the real issue unresolved is the revenue projection for the upcoming budget. Ultimately all individual budgets, when added up, must fit within the cap established by the projection. A variety of bills impacting revenue are on hold given the current climate of uncertainty. However, the deadline for submitting bills to standing committees is fast approaching, forcing sponsors to decide whether to file them anyway, or hold off a little longer, hoping the dust settles on the projection before the filing deadline arrives. I spoke with JFAC co-chair, Maxine Bell (R-Jerome) on Tuesday morning; she indicated that the earliest they would likely be setting the number would be this next week – in part due to Governor’s shoulder surgery. My best guess is that it will come sometime next week – keep treading!

Revenue & Taxation Redux. All minority party legislators believe that protecting jobs should be the first priority in a down economy, but the mix of bills receiving hearings in the House Revenue & Tax committee would belie that view. Many special interest groups, headed by Idaho’s premier big business lobby, the Idaho Association of Commerce & Industry (IACI) introduced an amendment to last year’s business tax repeal that could greatly shift costs from them to local governments and individual taxpayers. Three other new bills have been submitted dealing with the same issue. Representative Bill Killen (D-Boise) introduced the simplest amendment, proposing that no repeal takes effect until revenues increase at least 5% over the 2008 figure.

However, the IACI bill proposes expanding the tax break by including operating property such as utilities, railroads and the like. This approach is markedly different from the present system, and will generate an enormous and costly administrative task simply to make it work. Further, it will create another tax shift benefiting IACIs members at the expense of individual taxpayers, making the current struggle to make ends meet even more difficult. Rep. Killen will be serving on the subcommittee tasked with reconciling the competing proposals and will be guided by doing everything to ensure fundamental fairness to those struggling individuals.

January 29, 2009. The Great Collapse. Bob Maynard, the chief investment officer for PERSI, gave members of the House minority caucus a once over of how the financial community meltdown came about as well as some clues as to what needs to happen to get things moving upward again. To a great extent the “shadow” financial sector –namely, the minimally regulated investment banks such as hedge funds and the like, had become highly leveraged ( using borrowed funds to invest), and were placing those funds in more fragile and risky securities ( such as bundled home mortgages). Then, when the housing values started to shrink, they were forced to start selling off their assets to maintain the ratio of debt to asset value required under their loan agreements. With virtually every hedge fund taking the same action at the same time, selling became frenzy, quickly collapsing their portfolios to the floor, the first one hitting bottom being Lehman Bros. Very quickly most financial institutions panicked, lending ground to a halt, and the business entities, all of whom depend to some extent on the credit markets to operate were left with little or no access to ready cash; no working capital, no hiring, and no purchasing , quickly followed by no hiring and then layoffs. In effect the cash and credit normally used to lubricate the wheels of the economy is sitting on the sidelines waiting for someone to make the first move. So far no one’s moving very much.

A Silver Lining. I attended one of my first Agricultural Affairs meetings this week (I hadn’t realized that there even were agricultural affairs – I always thought farmers were pretty straight-laced). Dean John Hammel of the University of Idaho presented an overview of the economic performance of Idaho’s agriculture sector and it was clearly outstanding, contributing a record $8.4 billion to the Gross State Product (GSP) in the most recent period for which data is available. The record commodity prices which contributed to this performance had softened towards the end of the year, but still managed to make a huge contribution to bringing dollars into the state. It was extremely nice to hear some good news for a change.

January 22, 2009. Neighboring with the Governor. This week the members of minority party leadership, both House and Senate, had an opportunity to sit down with the Governor on his turf and talk. LBJ referred to this as “neighboring…” President Johnson was the ultimate arm-twister in his day and both respected and feared by his fellow Senators when he was the majority leader and the entire Congress when he served as President. Regardless of one’s personal views of his tactics, no one questioned his ability to get things done. Our visit with the Governor was much more low-key. He candidly discussed his views on why the changes between the State Board of Education and Luna’s Department of Education were needed. He also explained his desire to promote a health insurance proposal focused on 25 – 40 year olds, the largest group of uninsured in the state. On a more personal note, he cautioned us against assuming that his position on issues was being reliably relayed by inquiring reporters, suggesting we might consider confirming such statements before commenting. I was somewhat puzzled by his observations since that has not been my experience in dealing with reporters, but that experience is considerably abbreviated compared to the Governor’s. Time will tell.

Revenue & Taxation – the Games Begin. The committee held its first print hearings on new bills on Tuesday of this week, with additional ones on Wednesday followed by discussion and votes on proposed rule changes on Thursday. One bill brought forward by the tax commission corrects an oversight from the 2006 session creating the indexed homeowner’s exemption. The bill title and preamble contemplates a varying index to reflect fluctuations in its value; the actual language in the bill provide only for increases. The current bill changes one word, substituting “change” for “increase”. A second bill eliminates the need to obtain a fuel distributor permit, and to pay a gallonage tax, for those hardy souls who produce limited quantities of bio-diesel for their personal use. The cost of collecting and processing the paperwork exceeds the value of the taxes otherwise owing. A potentially major debate will likely ensue when the proposed rule clarifying what is and what is not business personal property for tax purposes comes before the full committee. The rules sub-committee was unable to reach a consensus and essentially bucked it up to the full committee. It has potentially major impact when and if the property tax repealer from last session is triggered (H599).

January 16, 2009. Once again we are back at the Capital Annex for the commencement of Idaho's legislative session. The downturns in the global, national and state economies which commenced about a year ago have since deepened and show every sign of continuing well into next year. The impact on existing and prospective legislative programs and initiatives is profound.

Hard Times are Here Again. The 2009 session is just days old, but has already developed into a full contact contest over budgeting priorities. Virtually all programs will take major reductions in services, cuts of existing programs, or both. The Governor has made it clear that there will be no new taxes to soften the cuts, nor is he willing to dig deeper into the state’s rainy day funds. Yet, in almost the same breath, he has elevated transportation funding to a super priority status in his budget hierarchy. The proposal calls for ten cents a gallon fuel tax increase over the next five years coupled with a doubling or tripling of vehicle registration fees over the same period. While fuel taxes and registration fees are constitutionally limited to being spent only on roads and highways, they come from the same taxpayer pockets as the general fund dollars collected by sales and income taxes. Many legislators on both sides of the aisle are questioning the implied prioritization of potholes over people.

New Hats. This session I’ll be trying on some new hats. In addition to serving as the minority party caucus chair, I will be serving on the Judiciary, Rules and Administration Committee as well as Agricultural Affairs. These assignments replace Local Government and Business. Change can be good and I am looking forward to learning about new issues and opportunities. I will continue to serve on the Revenue and Taxation Committee along with other members of leadership from both sides of the aisle. Bipartisan cooperation will be especially important this year. Many of you made it clear during this last campaign season that cooperating across the aisle was a must. We agree and with our limited resources, making every dollar count will be high on everyone’s list of priorities and a real measure of the legislature’s effectiveness.

Once again thanks for giving us the opportunity to serve you in the Legislature; your priorities are our priorities and we count on you letting us know how we can best meet your needs. We hope to hear from all of you during the session as to what is important; also our Team 17 office hours will begin January 27^th at the Borah High Career Counseling Center from 7:00 p.m. until 8:30. It’s a great opportunity to get some personal one-on one time to discuss issues or concerns of particular importance to you. Hope to see you then.

December 31st, 2008. Issues 'R Us. Without a doubt the dominant issue this session will be the budget setting process. Though primarily the province of the Joint finance and Appropriations Committee (JFAC), the extreme downturn in the economy is going to produce scrutiny throughout the entire session. In the past almost all appropriation recommendations put forth by JFAC were accepted in both the House and Senate with little controversy. With fewer dollars to dole out, every program, old and new, will be at risk for reduction, outright elimination or suspension. Policies which will be at play will be the need to protect those most vulnerable in the downturn and the desire to preserve safety net programs which allow us to garner additional federal funds, It is also essential to preserve programs such as Drug Courts which have had a major impact on reducing direct prison costs and, indirectly, social costs that affect all of us. Finally, now is the time to invest in programs and incentives that will position us to leverage the growth of Idaho's economy when things start up wards again. A lack of challenge is one thing not in short supply this session. Be sure to let your legislators know what your priorities are; it's going to take an effort by everyone to get the job done.

December 14th, 2008. Room at the Top. I have been selected by my fellow members of the Democratic House as their Caucus Chair. This is one of the three leadership positions, the others being the Minority Leader - John Rusche of Lewiston, and the Assistant Minority Leader, James Ruchti of Pocatello. Former House Minority Leader, Wendy Jaquet, stepped down from her post in order to take a position on the critical Joint Finance and Appropriations Committee (JFAC ), the body charged with developing Idaho's budget. Leadership may not serve on this committee by rule. As Caucus Chair I will concentrate on keeping the information flow going among all members of the caucus regarding pending legislative votes and upcoming hearings as well as assisting in fine-tuning pending bills. Coordination with our Senate counterparts is also part of the assignment, made easier since the new Minority Caucus Chair in the Senate is my fellow District 17 legislator, Elliot Werk. With some new faces in the Caucus, committee assignments have changed also. This session I will be serving on Revenue and Taxation as before, but will take on two new committee assignments, the Judiciary and Rules Committee and Agriculture. Times are changing.