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<DIV><FONT face=Arial size=2>Visionaries:</FONT></DIV>
<DIV>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>You have read
about Idaho’s revenue shortfalls.<SPAN style="mso-spacerun: yes">
</SPAN>Governor Otter has asked agency directors to tell what cuts they would
make in the event of a budget holdback.<SPAN style="mso-spacerun: yes">
</SPAN>He has asked them to be clear about how their programs would be
affected.</FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>On Wednesday,
September 16, I attended a meeting in which the Governor discussed issues
related to the budget.<SPAN style="mso-spacerun: yes"> </SPAN>The
dollar amounts for holdbacks of 6% and 3% for each agency were provided.<SPAN
style="mso-spacerun: yes"> </SPAN>Governor Otter has indicated that he
will not consider a tax increase.<SPAN style="mso-spacerun: yes">
</SPAN>He has expressed a willingness to recommend using approximately half of
remaining reserve funds, but significant holdbacks would still be
necessary.</FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>Budgets set
in the most recent legislative session can be described as austere.<SPAN
style="mso-spacerun: yes"> </SPAN>It might be noted that leaders in other
states are considering ideas such as an income tax surcharge on individuals with
higher incomes to gain revenue to protect vital programs.</FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>In 2008, the
Grocery Tax Credit was increased to $30/person for some, $50 for others.<SPAN
style="mso-spacerun: yes"> </SPAN>(More for those of age 65 or
older.)<SPAN style="mso-spacerun: yes"> </SPAN>These amounts are to
increase by $10 per year until they reach the amount of $100 per person.<SPAN
style="mso-spacerun: yes"> </SPAN>The cost of that increase for next year
is about $15.5 million dollars. <SPAN
style="mso-spacerun: yes"> </SPAN>There have been discussions about
freezing the buildup of the grocery tax credit until state revenues are
stronger.<SPAN style="mso-spacerun: yes"> </SPAN>(Governor Otter has not
said he would support such a move. ) </FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>In 2006, a
majority of legislators voted to shift mandatory property tax support for public
schools to the general funds.<SPAN style="mso-spacerun: yes"> </SPAN>This
requires public schools to compete with other entities for those monies.<SPAN
style="mso-spacerun: yes"> </SPAN>At the time, the promise was to “protect
education” by raising the sales tax from 5% to 6%.<SPAN
style="mso-spacerun: yes"> </SPAN>The notion of increasing the grocery tax
credit helps those who would struggle with the regressive sales tax.<SPAN
style="mso-spacerun: yes"> </SPAN>The cost of the higher grocery tax
credit erodes about half of the state revenue gained by raising the sales tax to
protect education.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><B
style="mso-bidi-font-weight: normal"><FONT face=Calibri>What would you recommend
to handle the revenue shortfall?<SPAN style="mso-spacerun: yes">
</SPAN>Further reductions of agency budgets, including K-12 and higher
education?<SPAN style="mso-spacerun: yes"> </SPAN>Use all or part of the
reserve funds?<SPAN style="mso-spacerun: yes"> </SPAN>Find ways to
increase revenue?<SPAN style="mso-spacerun: yes"> </SPAN>A combination of
these ideas?<?xml:namespace prefix = o ns =
"urn:schemas-microsoft-com:office:office" /><o:p></o:p></FONT></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>Governor
Otter will be in Kendrick tomorrow (September 23) from 9 AM to 3 PM.<SPAN
style="mso-spacerun: yes"> </SPAN>He will be at the Kendrick fire station
– adjacent to the city park.<SPAN style="mso-spacerun: yes"> </SPAN>This
is your opportunity to voice your opinion directly to him.</FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>Shirley Ringo
(883-1005, 301-2272)</FONT></P>
<P class=MsoNormal style="MARGIN: 0in 0in 10pt"><FONT face=Calibri>Please
contact me if you have questions.</FONT></P>
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