The Return of Butch Otter

The past two years saw a different Butch Otter than many of us bargained for in 2006. I expected a somewhat fiscally austere tenure, instead we got big spending increases and a plan to turn the Grocery Tax Credit into a complex nightmare. Otter’s motto as of that of previous Idaho Govis not a time to raise taxes in Idaho.” Otter challenged Ruchti and House Minority Leader James Rusche, D-Lewiston, saying they were “mixing apples and oranges,” and said, “Are you suggesting we take money out of transportation and put it into social services? … So where are ya going to find the money?”ernors when we’re in surplus seems to be, “If we have the money, spend it.”  Otter really became the consumate apparatchnik of the party and advocate for more spending.

Last night, Otter was more himself in proposing a series of spending cuts.  That these cuts touch education is angering some. Yes, this is one of those hard choices that need to be made, and a budget like Idaho’s presents little more than hard choices. Most of the budget is tied up in Education, Health and Welfare, Corrections, and the State Police. Tell me where the easy cuts are.

Ironically, I’ve seen no call for the Governor to increase the income tax or the sales tax. Like at the national level, where President-elect Obama is abandonning plans for immediate tax increases, there’s a large consensus that raising the income tax in the time of a recession is a bad idea.

Of course, Otter did a propose a tax increase for transportation. Reports Eye on Boise:

As Gov. Butch Otter left his State of the State speech, after talking with the media, he got into an impromptu debate with House Democratic leaders over his budget proposal. First, House Assistant Minority Leader James Ruchti, D-Pocatello, said with Idaho families struggling, “This is not a time to raise taxes in Idaho.” Otter challenged Ruchti and House Minority Leader James Rusche, D-Lewiston, saying they were “mixing apples and oranges,” and said, “Are you suggesting we take money out of transportation and put it into social services? … So where are ya going to find the money?”

The change is somewhat surrealistic given that it’s the Democrats complaining about the tax increase. They favor tapping the rainy day fund in order to avoid cuts or tax increases. The problem ultimately is that Otter is using some of the rainy day funds already, however we have no clue how long the storm is going to be. Thus tapping into the rainy day funds too much will quickly deplete them and just send hard choices down the line.

Regarding Otter’s transportation proposals, I think he has improved the deal considerably in some meaningful ways:

1. The IDT Administration has taken a hit with a 10% reduction in their Administrative costs.
2. I think the Surtax on Rental Cars makes sense and alleviates some of the taxes on the poor and middle class. While Rep. Durst is concerned it might hurt tourism, I think if you got a $400 rental car, you’re still only looking a t $24 and most of the time I rent a car, it $200 or $250 and I’m not sure a $12-24 fee is going to make a huge difference in someone’s vacation plans.
3. Flexibility: The plan’s proposed outlay is $174 million, down from the $240 million Otter demanded. Plus unlike past years when Otter wanted everything “now!” He seems willing to wait, to phase in, and be patient.

I don’t have much objection to the fee increases which are much reasonable than in prior proposals, his gasoline tax increase seems steep, even if it’s implemented at 2 cents a year rather than 10 cents higher beginning Next July. In addition, the underlying supply issues that led to $4.00 a gallon gas are still out there and have not been address. The price has only been driven down because of decreased demand due to a poor economy. This could be a whammy to taxpayers, and I couldn’t imagine backing it unless there was some proivision to not apply the increase to gas priced more than $3.50 a gallon. However, that would probably effectively make the tax useless in years ahead.

Overall, Otter has shown some strong leadership even where I’m not quite on board. The state has tough decisions to make and it’s ultimately the taxpayers that need to be put first in all that is done at the Capitol.