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From the Executive Director: 2019 Legislative Session Update

The end of the 2019 Legislative Session is in sight! Below you’ll find some of the highlights of this year’s session. For a complete overview of the session, I invite you to attend the Spring County Officials Insititute. I’m looking forward to seeing our members around the state.

-Seth Grigg, IAC Executive Director

Spring County Officials Institute

I hope everyone takes the opportunity to attend our upcoming IAC Spring County Elected Official Institutes scheduled to take place around the state. Training information, including a draft agenda and registration links can be found on the IAC website. The meetings will include the following training for county officials:

  • A review of the proceedings of the 2019 Legislature, including:
    • IAC’s Legislative Package
    • Medicaid Expansion Legislation
    • Elections/Campaign Finance Reporting Legislation
    • Public Defense Funding
    • Revenue Sharing
    • Transportation Funding
  • County official budget training, including:
    • Roles and responsibilities of county elected officials and department heads in the budget setting process
    • County revenue sources, including estimates for 2020
    • County expenditures
    • Budget implementation
    • Financial accountability and transparency

The meetings are intended for all county elected officials, department heads, chief deputies, and budget staff. To make it easy for everyone to attend, the trainings will take place at the locations and dates listed below. Registration is required and lunch will be included in the registration fee of $45.

  • Tuesday, April 30th: Hilton Garden Inn, Twin Falls, ID (click here to register for Twin Falls location)
  • Wednesday, May 1st: Idaho Central Credit Union Headquarters, Chubbuck, ID (click here to register for Chubbuck location)
  • Tuesday, May 7th: Vendome Event Center, Weiser, ID (click here to register for Weiser location)
  • Thursday, May 9th: Best Western Coeur d’Alene Inn, Coeur d’Alene, ID (click here to register for the Coeur d’Alene location)

State Revenues Continue to Lag Behind Projections

Over the weekend the state released revenue collections for March indicating that the state budget outlook is more concerning than originally anticipated. Individual income tax collections have lagged behind projections for most of the year. Many pointed to last year’s federal and state income tax law changes and under-withholding of individual income taxes from employee paychecks as the likely culprits. Because under-withholding of state and federal income taxes from employee paychecks was thought to be the primary problem, state budget writers believed state revenues would catch up in March and April; however, according to collection data released by the Division of Financial Management, individual income tax collections for the year are short by $107 million. The state will need to make up this shortfall as Idahoans file income tax returns between now and April 15th in order to meet budget projections. The chart below reflects state individual income tax collections as of March 31, 2019.

Adding to the concern, state sales tax and corporate income tax collections also came in short (although both receipts are still above projections for the year). When taking into account all state revenues through the end of March, the state is looking at a $75.8 million shortfall. These late budget developments have unfortunately killed any hope of extending the budget surplus eliminator program as well as other prospects of meaningful transportation funding for the year.

The Session is (Slowly) Winding Down (Maybe)

Wednesday, April 10th marks the 94th day of the 2019 Legislature. To put this in perspective, the session is now the third-longest session since 2000. Over the last twenty years, the average session length has been 86 days. It costs an estimated $35,000 per day for the Legislature to be in session.

In spite of being one of the longer legislative sessions in recent history, there have been fewer bills introduced and passed this year. To date, the Idaho Legislature has introduced 519 House and Senate bills, 320 of which have been passed. The passage rate will increase in the next few days as final appropriation bills are passed. Over the last 20 years, the Legislature has introduced an average of 592 bills a year and passed 369.

Governor Vetoes

Governor Little vetoed Senate Bill 1159 on Friday and House Bill 296 on Tuesday over constitutional concerns. These are the two bills adding restrictions to the citizen initiative and referendum process. To date, the Governor has only vetoed two bills, in line with the historical average of three governor vetoes a year (when controlling for 2009 when Governor Otter vetoed 36 appropriation bills to keep the Legislature in session to address transportation funding needs).

Medicaid Expansion

On Tuesday, the Governor signed Senate Bill 1204 into law days after the Senate passed it on a 19-16 vote. Senate Bill 1205 seeks waivers from the federal government from certain provisions of federal law including imposing eligibility requirements for those enrolling in Medicaid expansion. Over a dozen amendments to Senate Bill 1204 were offered up in the House and Senate. As amended, Senate Bill 1204 directs the department to seek the following waivers:

  • Allow greater flexibility for Medicaid to be used for mental health and substance abuse treatment.
  • Allow individuals between 100 and 138% of the federal poverty level to purchase (subsidized) health insurance on the state insurance exchange.
  • Require able-bodied Medicaid recipients to work, volunteer, or participate in a job training or education program for at least 20 hours a week (note that there are many exemptions for individuals with disabilities, illness, children at home, caretakers of individuals will disability or disease, etc.).

The Department of Health and Welfare will immediately begin pursuing these waivers. If the waivers are not granted by January 1, 2020, then Medicaid expansion will be implemented without the above eligibility requirements. The Department is confident it will be granted the mental/substance abuse treatment waiver. There are doubts that the waiver to allow individuals to choose insurance between insurance on the exchange and Medicaid will be granted. Similar (though not the same) waivers regarding work requirements were granted to the states of Arkansas and Kentucky; however, those waivers were overturned in court. We will not know the full impact of the requested waivers until later in the year.

On the funding front, the House finally passed Senate Bill 1171 by a 42-28 vote. Senate Bill 1171 is the appropriation bill for the state Medicaid program, including the first six months of Medicaid expansion. The Senate passed Senate Bill 1171 on a 31-3 vote on March 11.

Transportation Funding

On Monday, the Senate killed Senate Bill 1126 due to the ongoing state budget woes. Senate 1126 would have replaced the sunsetting budget surplus eliminator program with a new permanent transportation trust fund. Interest from the trust fund would have funded state and local transportation projects. Unfortunately, due to the late year budget uncertainty, there is growing concern that the state will need to tap into its rainy day account. Tapping into the rainy day fund will draw down the same fund that was envisioned being used for the transportation trust fund. Legislators have indicated a commitment to revisiting the idea of creating a transportation trust fund early next year.