State senators put their foot down against deeper budget cuts to Idaho’s Department of Health and Welfare on Thursday.
The 10-25 rejection of the state’s largest budget – $1.2 billion in general funds – revealed uneasiness within the Republican caucus of how the Joint Finance and Appropriations Committee chose to cut its way out of a projected budget deficit for the upcoming fiscal year.
“We have put ourselves in an uncomfortable financial corner,” said Sen. Jim Guthrie (R-McCammon).
Last year, the legislature cut taxes by $450 million and made spending decisions before setting a revenue target, Guthrie said, likening it to advice his father gave him: “It’s not the bad times that will hurt you. It’s the good years.”
In crafting next year’s spending plan, JFAC imposed a 5% cut to most state agencies beginning July 1, which includes the governor’s 3% holdbacks implemented last summer.
That’s instead of following Gov. Little’s proposal, which largely relied on one-time spending reductions for local transportation projects and using interest income to cover the budget gap.
Both Little and JFAC’s leadership rejected using part of Idaho’s $1.7 billion in reserve funds in any way.
Medicaid in particular took cuts totaling tens of millions of dollars in the current fiscal year, including hits to provider rates and programming.
“The calls I get about the Medicaid cuts have been nonstop since summertime,” said Guthrie. “The fallout from these cuts will have a negative ripple effect for years.”
That’s because failure to treat health conditions early can become far more serious and costly down the line, he said.
“You might save a penny today, but we’re going to pay a dollar later for every penny we save,” said Senate Democratic Leader Melissa Wintrow (D-Boise).
Wintrow said these reductions have already had profound consequences: four people participating in an acute mental health program have died after being cut by the governor in December.
In addition to moderate Republicans joining forces with Democrats, traditional fiscal hawks voted to kill the budget for a different reason – they said it’s too big even with the cuts.
Rep. Christy Zito (R-Mountain Home) said Idaho needs to not rely on federal programs, like Medicaid, which could shift extra costs to state budgets in the future.
“All of these shifts are coming to the state and we have to make structural budget reforms,” Zito said.
Sen. Glenneda Zuiderveld (R-Twin Falls) agreed.
“We need to start really making some really hard decisions on how we’re going to maintain a lot of this,” Zuiderveld said.
JFAC members will have to reconvene to tweak IDHW’s budget before a new bill can be sent to the chamber.
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