Local governments must prepare coming national fiscal woes
On Feb. 22, U.S. Sen. Mike Crapo visited the Idaho Legislature, speaking to both the Senate and House about the problem of the United States’ $15.4 trillion national debt. He said, “Every day, by somewhere between noon and 4 o’clock, the federal government has borrowed the entire amount of money that it takes to run the state of Idaho for a year.”
The national debt has grown by more than $5 trillion in the past three-and-a-half years. Sen. Crapo indicated the federal government is borrowing $.42 of every dollar spent.
The budget submitted last month by President Obama’s administration does little to stop this unsustainable course. The reality is that at some point, the federal government will not be able to borrow to support its overspending habits any longer nor should it.
Unlike the federal government, Idaho’s Constitution mandates that the state budget be balanced every year. But the state government gets almost 40 percent of its budget directly from the federal government. This reliance has grown during the economic downturn. Idaho’s Medicaid program receives about 70 percent of its funds from the feds.
Hard decisions at the state level will persist as long as the federal debt continues on its current course.
As a member of the Idaho Legislature’s Joint Finance-Appropriations Committee, my colleagues and I have been making the hard decisions the federal government is unwilling to make.
Strategic cuts were made during the downturn to balance budgets without raising taxes. This year, we are again consciously prioritizing the limited resources we have as we begin to set state agencies’ budgets.
JFAC, for the second year in a row, took public testimony. A majority of those testifying expressed concerns over cuts made to certain Medicaid programs last year.
In response to that testimony and the concerns raised by my constituents, I am proposing to restore dental benefits for Medicaid beneficiaries on the Development Disability and Aged and Disabled Waivers. As well as removing the necessity of those who have a dual diagnosis of a Developmental Disability and Mental Health issue having to make a choice between the two programs.
Restoring these two services will cost the state general fund just over $1.5 million dollars. However, in my opinion, restoring these services will cost less overall, we will see better outcomes for those being served and it will minimize costs at the local/county level.
Just as the state needs to prepare for the reduction in federal funding, local governments need to be prepared for the end to the borrowed spending at the federal level. The effects of reduced federal dollars at the state level will trickle down and constrain localities’ future budgets.
Over the past several years, local governments — including Idaho’s 201 cities and towns, and 44 counties — have become even more reliant on the state for funding. The ability for local governments to borrow for projects and services is already constitutionally constrained.
Cities, towns, and counties must be prepared to make difficult choices. These governments have to recognize this national spending problem now; and strategize ways in which they will budget for necessary projects and services with reduced funds in the future when the federal government begins to get its house in order.
The local institutions that govern closest to the people need to hear from you on these important matters. Your input is vital to the process.
Your legislative team always welcomes your opinions either by phone at 1800-626-0471, or by email. jbroadsword@senate.idaho.gov, skeough@senate.idaho.gov, geskridge@house.idaho.gov, and eanderson@house.idaho.gov.