“We’re going to be trying to cut through the fog and state information clearly, accurately and in a way that can’t be argued, because we’re just talking facts,” Ferguson told Idaho Reporter.

Ferguson’s center is part of the Mountain States Group, a Boise health and human services nonprofit that has several state and federal contracts. The center also received grant funding from the Northwest Area Foundation, a multi-state organization with a goal of reducing poverty.

Ferguson had several interesting but not immediately apparent observations on the state budget. The state ended its last budget year with an $85 million surplus, most of which went to education and the grocery tax credit. Ferguson pointed out that the tax collected in the last budget was $15 million more than lawmakers set as a revenue target for the current goal.

Ferguson wouldn’t comment on claims from some Democrats that the state had an artificial surplus, but said the state could have a $160 million surplus in the current budget. That’s subject to growth in Medicaid or public school student needs, as well as potential tax cuts.

“There’s still going to be a pretty sizable amount of excess revenue,” Ferguson said. He estimated that surplus could grow to $250 million in the next budget year.

In his former job, Ferguson used to provide economic forecasts and projected amounts of taxes the state would take in.  During the recent recession, lawmakers had set targets below those forecasts.  While there was news of a surplus this July, the opposite was true last year.

“I’m not going to be doing forecasting,” he said. “That’s a good thing from my perspective, because that’s not a fun thing to be doing.”  When it comes to forecasting, Ferguson joked, weathermen are doing better than economists these days.

Ferguson said he’s not coming into the job with any specific changes to fiscal policy in mind. He has two initial projects.  The first is a budget primer that will make the process of putting a budget together more understandable.  The second is a comparative tax report that looks at how Idaho tax revenues measure up to other states, as well as other points in state history.

Part of the budget primer will be explaining the difference between general funds, the tax revenues that are usually bantered about when discussing the state budget, dedicated funds, which come from fees and other sources, and money from the federal government.

Chart courtesy of Legislative Services Office

“Everybody talks about the general fund, but the budget is really much more than that,” Ferguson said. “I think there is a need to look at it from a broader perspective.”

“There were big cuts in Medicaid last (session) … $34.5 million was a number that you saw most of the time,” he said. “Well, that is the number that was the JFAC (Joint Finances-Appropriation Committee) number, the general fund portion. But if you look at the entirety of it, it was somewhere in the neighborhood of $105 million, and that’s because there’s matching funds (from the federal government).”  Democrats, who opposed those reductions, also brought up the loss in federal Medicaid dollars.

Budgeting is a balancing act with two sides, revenue and spending.  Ferguson’s work will start out on the revenue side, where he has more experience, though he said both are equally important.  “You don’t raise revenue just for the sake of it,” he said. “The expenditure side is really what it’s about — that’s the reason you have a revenue system.”

Ferguson outlined four principles of tax revenue that will factor into his two projects

1. Fairness in the tax structure, both vertically, between people with high incomes and low incomes, and horizontally, across different tax circumstances.

“If you give someone a sales tax break that someone else doesn’t get, that would on its face undermine horizontal equity,” Ferguson said. “There may be some justification for it, but one of the important points is there needs to be some clear justification.”

2. Efficiency, including what it costs taxpayers to comply with the tax code, state officials to collect taxes and how tax policy affects business decisions.

3. Adequacy, ensuring that the amount of tax revenue is enough to pay for all state services. Ferguson said that’s changed over time, and that Idaho’s sales tax base has eroded as the state shifted from a goods-based economy to a service-based economy.  He said Idaho is among the states that includes the fewest services in its sales tax.  For example, other states tax dry cleaning, though Idaho doesn’t.

“On its face, that undermines the adequacy principle,” he said.  “What it means is that the economy is shifting in a way that it undermines the base of the … sales tax. Maybe that’s something Idaho wants.”

4. Stability in collecting revenue. “As we’ve all seen, that’s an elusive goal,” he said.   “We’ve seen more instability in the revenue structure in the last decade or so than I had in the previous several decades of my career.”

Ferguson said he thought the 2001 recession would be “the big one, the equivalent of a 500-year flood.” It was surpassed by the recession that started at the end of the last decade.

“The Idaho economic outlook turned unseasonably cool this summer, which is a slight change from spring’s warming trend,” began the new forecast, prepared by the Division of Financial Management (DFM) and state economist Derek Santos.  The forecast said state businesses are showing “signs of growth this year followed by modest gains thereafter.”

“The forecast is generally weaker than the one from last quarter,” said Wayne Hammon, who leads DFM. “However, it’s still positive.”  Hammon told state lawmakers in an e-mail that they shouldn’t start planning where to spend the new revenue, since there will be a new forecast before lawmakers convene in 2012, and it’s unclear if the expected tax revenues will hold.

The latest revenue projection is almost $80 million higher than the last projection from this year. The projected $2.6 billion is much higher than the target lawmakers set the current state budget to, $2.43 billion.

Lawmakers set low tax revenue targets the past two years after Gov. Butch Otter had to issue holdbacks to cut spending in 2009. In 2010, that lower target wasn’t cleared, but a contingency plan, including state reserve funds, made up the difference. This year, the target was cleared by $85 million, which triggered sending additional funds to schools. Otter also used the surplus to thaw the planned freeze of the grocery tax credit, which results in a $10 credit for most income tax filers.  After those policy decisions, the state still had a $17 million surplus to start the current budget year.

Otter’s spokesman, Jon Hanian, said the governor is sticking with his approach to the budget in light of the new forecast.  “Given what we’re seeing in the financial markets, not just in this country but worldwide, I think caution is the watchword,” he said.

Hanian also laid out where the governor would want to put any additional revenue.  “If we have additional money at the end of the day, we’re going to ensure that education gets that,” he said.  “It’s also important that we replenish our rainy day funds.”  Hanian said the stockpile of reserve funds cushioned the blow to the state economy during the recession.

Democratic lawmakers have criticized Republicans in power for the low revenue targets.  Boise Democratic Reps. Grant Burgoyne and Bill Killen wrote in a recent opinion piece that it led to an artificial surplus.

“The Republican budget forecast was intentionally low,” they wrote.  “And it resulted in a budget that significantly underfunded public schools, colleges, and the help needed for the disabled and mentally ill … None of this needed to happen.”

courtesy: Idaho Economic Forecast

DFM also released the tax revenue report for July, the first month of the current budget year.  The state took in half a million dollars less than the brand new forecast expected.

The new forecast expects Idaho to create slightly fewer jobs during the next four years and for personal incomes to be less than expected, though both economic measures will increase from their current levels.

Almost $60 million of the money will go to public schools, which is required since the state took hundreds of millions in federal stimulus money in 2009 and more than $50 million for educators’ jobs last year.  Those federal strings also require the state to give $7.5 million to Idaho’s three community colleges.

An additional $15 million will pay for the next increase in the grocery tax credit, which would give most Idahoans an additional $10 on top of the current $50 they currently receive.  Seniors and poor Idahoans get $70 in the grocery tax credit, which would also rise by $10.

State officials are pleased by the good news, as revenues were $19.1 million above expectations last month.  Some did question Gov. Butch Otter’s decision on the grocery tax credit.  “I’m grateful for the revenue growth,” Otter said. “But I still think that we’re a long way from out of the woods.”

“I thank the Legislature and Gov. Otter for their fiscally responsible approach to budgeting and continued commitment that Idaho public schools will receive the first dollars available,” said Superintendent of Public Instruction Tom Luna.  “Now, we are able to distribute $60 million in additional funds to our schools, which will more than cover the $47 million shortfall school districts were going to face in the upcoming year.”

Money will go to local schools based roughly on how many students they teach.  Districts in Idaho’s 10 largest cities and several other sizable districts will all get more than $1 million apiece, topping out with Meridian’s $7.5 million.  For a full list of district’s surplus payments, click here.

Sen. Dean Cameron, R-Rupert, one of the leading budget writers, said districts need to be prudent with the funds.  “They should consider the money one time in nature, so I would discourage them from trying to use it on ongoing expenses,” he said.  He cautioned that districts could see a drop in state funding for teachers’ salaries due to the school reform plan lawmakers approved this year.

The community college money will be divvied up by enrollment growth, so the state’s newest college, the College of Western Idaho, will get $5 million of the $7.5 million pie.

“There hasn’t been a decision as to how the money will be spent,” said CWI spokeswoman Jennifer Couch.  She said the school’s board will discuss how to spend the money at a meeting next week.  “We are taking a look at a number of different options, since we’ve had increased expenses due to our enrollment growth.”

Before lawmakers knew about the surplus, they passed a resolution asking the governor to freeze the grocery tax credit.  Now that there’s extra money, Otter said he won’t follow that request.  “That’s one of the promises we made long ago, and we’ve desperately tried to keep it,” the governor said about increasing the tax credit.

“That’s pretty much the governor’s decision,” said Senate President Pro Tem Brent Hill, R-Rexburg, though he added that he generally agreed with the decision.  “Sixty seven million dollars for public education and $15 million back to the taxpayers seems like a pretty good compromise to me.”

Cameron said that if it was his call, that money would go elsewhere.  “If it were left to my choice, I would probably restore some of the reductions in health districts and the Department of Health and Welfare (DHW),” he said.

Democratic House Minority Leader John Rusche of Lewiston also questioned putting the surplus to the grocery tax credit.  He said the money could go to other state programs, including DHW programs for the poor and disabled, probations and parole programs as well as building and maintenance programs that have been put off during the economic downturn.

“Is giving this tax credit the best way to use this money?”  Rusche asked.  “Those questions will persist.”

The $85 million surplus amounts to 3 percent of the state’s $2.44 billion in general fund tax revenues for the past year.  The surplus arose when lawmakers set their revenue to a dollar amount recommended by the governor, but that was lower than his staff economist predictions and requests from legislative Democrats.

“it’s pretty clear that we did set that bar too low,” said Sen. Diane Bilyeu, D-Pocatello.

Otter, Cameron and Hill all said that the lower revenue target was needed given the economic uncertainty and the difficulty of putting in spending holdbacks if the $85 million surplus ended up as a $85 million deficit.

“Lawmakers were very conservative in the projection that they did, realizing the very adverse consequences of estimating it too high,” Hill said.

“We had to make a decision based on the information at the time,” Cameron said.  “Based on that, I think we set the revenue projection just right.”

Rusche said that low target may have led to more cuts than were necessary.  “What’s done is done, but I think that it may have caused unnecessary harm in the budgeting process,” he said.

STATE BUDGET ENDS FISCAL YEAR WELL AHEAD OF EXPECTATIONS; GOVERNOR URGES CAUTION

(BOISE) – Governor C.L. “Butch” Otter announced today that the State ended fiscal year 2011 on June 30 with significantly more General Fund tax revenue than expected, but not enough to warrant big changes in the cautious, conservative approach to budgeting that yielded such a positive result.

The State received $2.44 billion from all forms of tax receipts – sales, income and corporate – in the past 12 months. That was $85.3 million more than the most recent Division of Financial Management projection in January, and 7.95 percent ahead of total tax receipts in fiscal 2010.

“I’m grateful for the revenue growth. But I still think that we’re a long way from out of the woods,” Governor Otter said. “You need to remember that this is about half a billion dollars less than we had in my first year as Governor. So we’re going to keep working hard to grow our economy, and along with it our revenues.”

Under Senate Bill 1207 passed by the 2011 Idaho Legislature, most of the unexpected additional revenue will be distributed to public schools and community colleges to meet the federal “maintenance of effort” requirements that the State agreed to under the American Recovery and Reinvestment Act and the Fed Jobs Act, which allocated federal funding to state education programs.

Public schools will receive a little over $59.9 million, distributed to local school districts through the Idaho Department of Education. The State Board of Education has determined that – based on enrollment growth – the College of Western Idaho will receive about $5 million, North Idaho College almost $1.8 million, and the College of Southern Idaho almost $668,000, for a total of about $7.5 million to community colleges.

All $59.9 million in additional public school funding can be used at the discretion of local trustees. However, Governor Otter urged them to be prudent with the one-time funds, to save as much as they can for future needs, and not to obligate the money to continuing expenses.

Senator Dean Cameron of Rupert and Representative Maxine Bell of Jerome – co-chairs of the Legislature’s budget-writing Joint Finance and Appropriations Committee (JFAC), echoed the call for continued caution despite the one-time payment that was a key part of the budget plan agreed upon by legislators and the Governor.

“Today’s positive news is greatly needed and appreciated for Idaho’s school districts and community colleges. I am grateful to the JFAC committee, legislative budget office, the Legislature and the Governor for agreeing to this approach,” Cameron said.

“None of us wanted to see further reductions in education, but the instability of the economic numbers forced us into a cautious approach,” Bell said. “With this approach, JFAC and the Legislature shared with the Governor the desire that any additional available funds would go first to education, and today’s news delivers on that commitment.”

Besides one-time money for education, Governor Otter determined that the unanticipated revenue will enable the next phased increase to the grocery tax credit for those who file State income tax returns. That will provide about $15 million in income tax relief for Idaho taxpayers.

“That’s one of the promises we made long ago, and we’ve desperately tried to keep it,” the Governor said.

Governor Otter also said he would be contacting former Governor Cecil Andrus about a friendly wager they made when fiscal year 2011 started in mid-2010. Governor Andrus bet State revenue would exceed the official projection from Governor Otter’s budget office.

“I made a silly bet with Andrus. I was hoping that he was right, and then I did everything I could do to make sure he was right,” Governor Otter said. “It’s a payment that I’m very happy to make.”

Superintendent of Public Instruction Tom Luna released the following statement on the $59.9 million in surplus funds going to public schools:

“This is a great day for Idaho schools … I thank the Legislature and Governor Otter for their fiscally responsible approach to budgeting and continued commitment that Idaho public schools will receive the first dollars available. Now, we are able to distribute $60 million in additional funds to our schools, which will more than cover the $47 million shortfall school districts were going to face in the upcoming year.”

“I certainly didn’t see anything that I would consider to be inappropriate,” Cameron said about bonuses paid out to workers at the Legislative Services Office (LSO).  All LSO employees received a bonus of more than $1,200 this year, for a total more than $90,000.  Those bonuses were within LSO’s budget for the fiscal year.

Agency head Jeff Youtz said the payments came after several years of stalled wages and were recognition and compensation for workers doing less with more as the agency reduced its overall staff.

“That savings was what generated enough funds for them to give these one-time salary adjustments, in essence replacing the money that was lost because they were furloughed,” said Cameron, one of the co-chairs of the Joint Finance-Appropriations Committee (JFAC), which sets the state budget every year.

JFAC members reviewed the payments to LSO staff at a meeting earlier this month.  Cameron said there were questions about the payments and that it was a perception issue, since the so-called bonuses come as other agencies face cuts and economic growth is slow.

While the payments to LSO workers weren’t as big an issue, Cameron said he was more worried by salary increases given to other state workers.  “In my mind, the permanent increases are more concerning because they won’t necessarily have the money next year in salary savings to maintain those,” Cameron said.

Cameron mentioned the Division of Financial Management (DFM), the office that helps Gov. Butch Otter put together a budget plan every year.  Six DFM budget analysts received salary increases this year, though budget chief Wayne Hammon said those bumps in pay brought those workers in line with their co-workers.

“It’s a fairness issue: I can’t have two people sitting right next to each other doing exactly the same job, getting exactly the same performance review, but getting different salaries,” Hammon said.

Hammon said the salary increases in his office are sustainable amid tight state budgets.  “Every one of [LSO’s] staff members got bonuses—a couple of DFM staffers got raises that total less than $8,000 a year,” Hammon said adding that raises won’t lead to an overall increased budget for DFM.  He also said that DFM, which has fewer employees and tax dollars funding it than LSO, trimmed its budget by 36 percent in the last few years, which is more than LSO.  “We have led by example.”

LSO paid out the most to its workers in a report of one-time payments released by the state controller’s office earlier this month.  Second on the list was the state court system, which paid 40 court reporters slightly less than $1,000 each.

Court administrator Patti Tobias said those payments to court reporters, who keep records of what happens in courts, aren’t bonuses, but a necessary payment.  Reporters’ payroll period and pay days were pushed back by two weeks due to an administrative decision by the court, which would’ve delay their pay for work this year into 2012.

“The court reporters would have experienced a negative financial impact,” Tobias said.  “The court did not want them to suffer in 2011.”  Court reporters will get another one-time payment later this year.

Other agencies that gave workers bonuses or one-time payments include the Department of Finance, State Appellate Public Defender, and Industrial Commission.

“We are continuing to hold claims, but also hopeful that we will begin to pay those next week,” said DHW spokeswoman Emily Simnitt, who said the agency could resume making payments on June 29 or 30. The state’s fiscal year resets starting in July, so payments would likely go out the door after the Fourth of July weekend at the latest.

Medicaid provides insurance to more than 200,000 Idahoans who are children from low-income families, have a disability, are elderly, or are pregnant and low-income. It’s a nearly $2 billion annual spending program, and for every dollar Idaho pays in Medicaid, the federal government pays more than $2.

After hospitals and other providers serve Medicaid patients, they send a bill to the state, which then repays the provider.

DHW suspended repaying providers this week, which should save $13 million in the current budget. “During the past month, claims were running a little bit higher each week than usual,” Simnitt said. “We really had hoped that we would not have to do this, but we really have to make it out of the fiscal year.”

The state could end up holding payments for two weeks this month, which would be far less than the eight weeks Medicaid payments were held last week. Last year, payments were held for all Medicaid providers, not just hospitals. Simnitt said hospitals were selected because they have other sources of income, unlike some providers that serve primarily Medicaid patients.

Toni Lawson with the Idaho Hospital Association said that hospitals will notice the delay, but not necessarily feel deep pain. “In general, it will be somewhat uncomfortable for a number of hospitals,” she said. “I don’t want to overemphasize the impact but it will be challenging for a number of hospitals.”

Lawson said the increased demand by Idahoans for Medicaid services could be a concern for balancing the budget next year. “If the volume continues to increase and the strains on the economy continue to lead to higher Medicaid growth, that’s going to continue to be a challenge,” she said.

Lawson said smaller hospitals may feel more of an impact due to the delays. Dallas Clinger, the CEO of Power County Hospital in American Falls, one of the smallest in the states with 10 beds, said it’ll have a minimal impact. “Fortunately it’s a short time period, much shorter than last year,” Clinger told IdahoReporter.com. “I was surprised that they were only holding two weeks. They’ve recovered quite a bit, in my opinion.”

“Nobody likes it, but it’s not going to impact us that much,” said Joe Cladouhos, the CEO of Syringa Hospital in Grangeville in north central Idaho. “We can adapt to it, especially if it’s going to be a couple of weeks.”

St. Alphonsus in Boise, one of the largest hospitals in the state, will also weather the delays. “What this means is there’s simply less money in the bank,” said spokeswoman Elizabeth Duncan. “No one will feel the affects of this at all.”

Idaho ranks second in the nation since 1992 in the state coincident index, which measures employment and payroll. The Gem State’s index has grown by 88 percent since then, while the U.S. index increased almost 53 percent. However, Idaho had more than doubled its index four years ago, before the recent recession brought that number down.

Oregon’s index score is less than a tenth of a percentage point above Idaho, according to data for May released Tuesday by the Federal Reserve Bank of Philadelphia. Idaho had led Oregon, and all other states, in April. The factors that go into the coincident index are the unemployment rate, non-farm employment, hours worked in manufacturing and workers’ wages adjusted for inflation.

Idaho Department of Labor economist Will Jensen said in a recent department newsletter that Idaho’s high unemployment rate, at 9.4 percent last month, is hurting the state’s ranking and economic activity. Jensen said data shows Idaho’s following the national in other parts of the coincident index.

Graph courtesy of Idaho Department of Labor

Before the recession, Idaho’s neighbor Nevada was the best-performing state on the economic indicator. Nevada is also the only state that suffered worse during the recent recession.

The recession’s still having an impact on Idaho’s job market. “It’s almost 60,000 fewer jobs since the recession,” Bob Uhlenkott, the Idaho Department of Labor’s chief research officer, said at a roundtable discussion on unemployment Tuesday.

Jensen said unemployment woes are likely a large part of the index score. “All of our other measures showed Idaho doing well, except our unemployment rate going up,” he told IdahoReporter.com.

Western states have had more room for growth in the past two decades. Utah and Oregon are in the top four, and nine of the top 11 states are west of the Mississippi River.

The Federal Reserve Bank also publishes a leading index intended to predict states’ economic growth for the next six months. Idaho ranks 16th in growth prospects, according to the bank.

Below is an interactive visualization showing states’ coincident index scores since 1979, courtesy of ManyEyes.

Texas, for the seventh consecutive year, was recognized as the best state for business growth. North Carolina, Florida, Tennessee and Georgia were the other states in the top five. On the other end of the scale, the bottom five states for business growth were California, seventh year in a row for the worst state for growth, followed by Michigan, New Jersey, Illinois, and New York.

One CEO, who wished to remain unnamed, said the key to business development is not complicated: “Make sure your tax scheme does not drive business to another state. Have a regulatory environment and regulators that encourage good business – not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need. Rules that make it hard, if not impossible, to separate from a non-productive employee make companies fearful to hire or locate in a state.”

While living environment plays a significant role in evaluating a state’s feasibility for new business, overregulation and poor tax schemes counteract its significance, according to the survey. Businesses simply do not want to be too regulated and overtaxed.

How can the state stop its slide on the list and become more viable for businesses to set up shop and start creating jobs in Idaho?

According to Alex LaBeau, president of the Idaho Association of Commerce and Industry, said there are some good ideas and plans for creating jobs and growing the economy in the Gem State. “Part of what you have to do is go back through those Project 60 policies that were recommended and worked on by the governor’s office and then transferred to the Legislature. I think that there are a lot of really great ideas. When you ask businesses what it is that they want to make them successful out of government that is the first place to go.”

Project 60 is a three-step plan to grow both rural and urban economies throughout the state of Idaho. Its name is also its goal – to grow the state’s gross domestic product (GDP) to $60 billion annually. For 2010, the estimated GDP for the state was $54.4 billion.

Step one is to “Foster Systemic Growth.” This includes keeping existing companies in Idaho and preserving the current workforce in the state. Also included in this step are “workforce training,” “workforce recruitment,” and “technology transfer.”

The second step is “Domestic Recruitment.” A business attraction strategy has been implemented that consists of top executives for companies throughout Idaho pooling resources and recruiting other companies to expand or establish themselves in Idaho. Also included in this step are “Synergistic Industry Clusters.” These are industries the state has set its sights on bringing to Idaho, such as alternative energy, recreational technology, manufacturing, aeronautics, and technology. Marketing and public relations are also part of step two.

The last step, step three, is “Inward Foreign Direct Investment.” According to Project 60, foreign investment “plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, less expensive production facilities, access to new technology, products, skills and financing.”

Although Idaho has slipped to 19^th on the magazine’s list in the past year, being inside the top 20 indicates the state still offers a lot to potential business growth. Oregon, for example, ranked No. 33. Idaho is 14 places higher due to a lower income tax rate than Oregon, plus Idaho is a right-to-work state.

Companies look for a variety of things when they ponder setting up a business in a state, and, depending on the business, not everything is looked at equally. According to LaBeau, “Some of them are going to be looking at the availability of the labor market, some of them are going to be tax policy, some will look at what the resources are here, what’s the transportation like, do they have customers here, what’s the education like. It’s going to vary from company to company and it’s really not a one-size-fits-all type of thing. So what you really have to do is focus in on the entire infrastructure of the state, which is largely what you see in a lot of the Project 60 stuff.”

“I think the employees we have left that are doing more with less deserve that kind of recognition and compensation,” said LSO Director Jeff Youtz. He said that the bonuses are within his agency’s budget, and come after three years of no pay increases and a loss of six staff members..

“Because of these staff reductions and retirements, I had the money and I felt that my employees deserved them,” Youtz said. “There is no salary freeze on. The Legislature and the executive branch have been supportive of giving flexibility to agency directors to reward good people and balance their budgets.”

Wayne Hammon, Gov. Butch Otter’s budget chief and the leader of the Division of Financial Management (DFM), has urged state agencies to only give out bonuses to exceptional workers. “DFM has worked with all of them to minimize the bonuses and salaries, just because we’re trying to be fair across all the state agencies,” Hammon said. “We have not allowed agencies to give bonuses to every single employee.”

DFM, which is part of the governor’s executive branch, oversees budgets for most state agencies, but not for LSO, which is part of the legislative branch.

One lawmaker who helps write state budget said he’d review the LSO bonuses. “I think every agency is grappling with how to keep their good employees,” said Sen. Dean Cameron, R-Rupert. Cameron is one of the leaders of the Joint Finance-Appropriations Committee, which is meeting next week and could look at the bonuses.

All told, 185 state workers have gotten bonuses this year for a total of $227,003. The middle point for those bonuses was $1,000, which is what 15 employees in the State Appellate Public Defender’s Office were paid, though bonuses ranged from $110 for University of Idaho graduate assistants to $5,000 for analysts in the Department of Finance. In the judicial branch, 40 court reporters received bonuses of slightly less than $1,000.

By comparison, in all of 2010, 86 state workers received $99,267. Almost half that amount — $49083.22 — went to Bob Maynard, the chief investor for the Public Employee Retirement System of Idaho (PERSI), who earns performance bonuses depending on how well the state retirement fund performs.

More than 380 state workers have also gotten pay raises during the current year, with the middle point for increases $1 an hour. The biggest increase went to Boise State University football coach Chris Petersen, the highest paid state employee. His hourly salary rose $62.72 an hour to $502.93. He signed a new contract extension last year.

Many of the wage increases and bonuses went to employees in agencies that generate revenue, including the State Insurance Fund, the State Liquor Division, the Department of Finance, and public universities and colleges.

Alex Neiwirth, a field organizer for the Idaho Association of Government Employees, said more than 95 percent of state workers aren’t getting any extra money this year. “Our main concern with it is equity and that these aren’t equitable at all,” he said.

“What should be happening is all state employees’ wages need to be keeping up with inflation instead of losing ground,” Neiwirth said.

Each of the past two years, the Idaho Division of Human Resources, which Hammon formerly ran, has issued a report saying the state should bring its workforce more in line with private businesses by raising wages and lowering benefits. Due to the tight state’s budget, lawmakers haven’t made any major structural changes to workers’ pay and benefits, though smaller spending plans have led some agencies to reduce staff and force remaining staff to take unpaid furlough days.

“We’ve tried to encourage districts that have talked to us to not count on it and budget it,” said Sen. Dean Cameron, R-Rupert.

The added money for schools is part of a law passed during the legislative session to meet the requirements of the 2009 federal stimulus package that gave Idaho more than $100 million for public schools. State schools chief Tom Luna said last month that schools could be looking at an extra $50 million, but with the May tax report below expectations, that amount is less likely.

Cameron said school districts would need to treat the money as a one-time windfall, not part of their ongoing yearly budgets. He said they might want to hang onto it in case there are any more spending cuts from the state. Those cuts include the drop in salary-based apportionment for teachers and staff scheduled to start in the next school year, as part of the education reforms backed by Luna but opposed by Cameron.

Luna’s spokeswoman Melissa McGrath said the Department of Education will wait to see how much money schools would receive before making a recommendation to local districts.  Some districts, including those in Coeur d’Alene and New Plymouth, have already decided how any extra money they receive from the state will be spent, including going toward staff salaries or reducing furloughs.

Cameron and Gov. Butch Otter’s budget chief Wayne Hammon said it’s too early to tell whether the current $66 million budget surplus will grow, shrink or hold through June, which is one of the larger tax collection months in the state.

“It would be unwise to draw any conclusions about where the State will finish the fiscal year before we see the results from the current month,” Hammon said in an e-mail to lawmakers. Idaho’s fiscal year ends on June 30.

The biggest shortfall in May tax collections was in the personal income tax. Hammon said that was due to the state paying out more refunds for 2010 taxes than expected. Corporate income tax collections were above predictions, while sales tax revenues were slightly less than expected.

“We’re still in this cycle of mixed messages on the economy,” Cameron said about the May tax numbers. He also expressed concern when Idaho collected $14 million more than expected in April. “It’s disappointing, but it’s along the same lines as we thought. It’s part of the reason that we’ve been preaching caution.”

The state has collected tax revenues below expectations only one other month during the current year, in December. Lawmakers set their budget with an expectation of 4.2 percent growth in tax collections, and by extension in most economic activity, for the current fiscal year, and 3 percent growth for the next 12 months.

Read more about May tax collections at Idaho Outlook, published monthly by the Division of Financial Management.