Idaho schools face cuts, agencies face elimination in 2010 as Otter seeks to balance $52M gap

BOISE, IDAHO — Two months before the 2010 Idaho Legislature convenes, the session's bitter tenor is set: Public education funding is due to be slashed again and state agencies now scraping to get by could be eliminated to help cover a remaining $52 million budget shortfall.

Speaking Wednesday at the Associated Taxpayers of Idaho annual conference in Boise, Gov. C.L. "Butch" Otter ruled out an income tax increase, including a hike on those earning more than $50,000 suggested last week by a minority Democrat.

"Those who are successful ought to be celebrated and rewarded," Otter told lobbyists and politicians. "I'm resisting the effort to start class warfare."

The original budget deficit was $151 million, before Otter ordered agencies to trim 4 percent from spending in September. To make up the rest, Wayne Hammon, Otter's budget chief, told tax conference attendees that "everything is on the table," including privatizing services, selling state-owned real estate, even eliminating entire agencies.

Otter won't unveil his final plans until his annual State of the State speech on Jan. 11, Hammon said.

Agency heads have been asked to compare their missions with those from five years ago as a guide for reducing spending in fiscal year 2011. In a letter last week, Otter encouraged directors not to fill vacant positions, reduce travel further — even cancel memberships in superfluous professional organizations.

House Speaker Lawerence Denney, R-Midvale, said Wednesday that public education will likely face austerity measures for a second straight year. Idaho's general fund share for public schools in the current fiscal year was cut to $1.3 billion, down 7.7 percent from 2009.

"The only way to balance the budget without raising taxes is to cut public education," Denney told The Associated Press. "That's always very difficult."

Already this year, at least 23 of Idaho's 115 school districts have declared a financial emergency. Superintendent of Public Instruction Tom Luna suggested Wednesday even more districts will join that list, after depleting reserves in recent months.

Asked about his plans to deal with looming cuts for fiscal year 2011, Luna said his priorities remain preserving programs that directly boost student performance but that he would "explore many avenues and many scenarios."

House Minority Leader John Rusche, D-Lewiston, conceded public education, prisons, health and welfare, and state colleges and universities will likely be among the biggest targets for savings in the upcoming session. They make up nearly all of the $2.5 billion budget in 2010, which is down 15 percent from a year earlier.

But Rusche said lawmakers shouldn't gut valuable training and education programs necessary to help Idaho rebound from the economic doldrums and a 9 percent unemployment rate.

"I don't think anybody can really expect to hold those budgets harmless," Rusche said. "But as we understand the consequences, let's focus on what's building jobs."

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AP writer Jessie Bonner in Boise contributed to this report.