>> MEMBERS OF IDAHO'S LEGISLATIVE JOINT FINANCE AND APPROPRIATION COMMITTEE MET THIS WEEK TO LOOK AT NEXT YEAR'S BUDGET.

AND THE NEWS IS GRIM.

WHAT MORE CAN BE CUT?

OR WILL TAXES HAVE TO GO UP?

JOIN THE CONVERSATION.

"DIALOGUE" IS NEXT.

>> HELLO, I'M JOAN CARTAN-HANSEN.

THANK YOU FOR JOINING US HERE ON IDAHO PUBLIC TELEVISION, ON THE WORLDWIDE WEB, AND ON PUBLIC RADIO STATIONS.

>>> THERE'S GOOD NEWS AND BAD NEWS.

THE GOOD NEWS IS STATE TAX REVENUES ARE UP.

WE HAVE A YEAR-TO-DATE SURPLUS OF ALMOST $23 MILLION.

THE BAD NEWS IS THE STATE IS FACING SOME PRETTY BIG HOLES IN THE BUDGET THAT STARTS NEXT JULY.

HOW BIG?

ABOUT $340 MILLION.

THAT'S A 14% ADDITIONAL CUT IN STATE SERVICES.

HALF OF THE SHORTFALL IS IN MEDICAID, ABOUT $172 MILLION.

K-12 SCHOOLS, WHICH TOOK AN UNPRECEDENTED CUT IN THE CURRENT FISCAL YEAR'S BUDGET, WILL NEED AN EXTRA $60 MILLION JUST TO STAY EVEN WITH ITS REDUCED BUDGET.

THE GOVERNOR AND LEGISLATORS WILL START IN JANUARY TRYING TO FIGURE OUT WHAT TO DO.

WHAT ELSE CAN THEY CUT?

OR WILL TAXES HAVE TO GO UP?

JOINING ME TO PREVIEW THAT BUDGET DEBATE ARE TWO GUESTS, IN BOISE IS STATE SENATOR NICOLE LEFAVOUR, A MINORITY MEMBER OF THE JOINT FINANCE AND APPROPRIATIONS COMMITTEE.

AND JOINING US IN POCATELLO IS REPRESENTATIVE DENNIS LAKE, CHAIR OF THE HOUSE REVENUE AND TAXATION COMMITTEE.

THANK YOU FOR BEING WITH US.

>> HELLO.

>> AND OF COURSE WE WANT TO HEAR FROM YOU.

GIVE US A CALL AT 1-800-973-9800.

LET'S START OFF WITH THE BAD NEWS.

WHY ISHERE SUCH A BIG HOLE IN OUR BUDGET?

>> WELL, IN PUTTING TOGETHER LAST YEAR'S BUDGET, WHICH WAS A VERY DIFFICULT ONE, AND HAS CAUSED A GREAT DEAL OF ANGUISH I THINK IN PUBLIC SCHOOLS, AND IN FOLKS WHO GET STATE MEDICAL SERVICES, WE EVEN -- EVEN WITH THE CUTS WE MADE, WE USED A LOT OF ONE-TIME FUNDS.

WE HAD A GREAT DEAL OF MONEY FROM FEDERAL STIMULUS AND HAD RAINY DAY FUNDS, AND DID A FAIR BIT OF SHIFTING AROUND OF THINGS, WHICH GOT US TO A 7% ACROSS THE BOARD CUT.

WHICH IS NOT IN ANY WAY A FULL REGULAR BUDGET THAT WE WOULD SEE.

AND SO THIS YEAR WE DON'T HAVE THOSE ONE-TIME FUNDS.

AND WE -- AS A RESULT WE'RE LOOKING AT EVEN IF WE DID THE SAME HARSH 7% CUT THAT WE DID LAST YEAR, WE STILL HAVE THAT $340 MILLION HOLE, WHICH IS ALL THOSE ONE-TIME FUNDS, LIKE NOT HAVING THE SOMETIME LUTION.

>> THE FEDERAL STIMULUS REALLY SAVED IDAHO'S BACON, AS IT WERE.

>> WE WOULD HAVE HAD TO CUT THE SCHOOLS WAY, WAY DEEPER IF WE HAD NOT HAD THE FEDERAL STIMULUS.

IT WOULD HAVE BEEN VERY, VERY HARD.

>> REPRESENTATIVE LAKE, THE THINGS IN THE NEWS THIS WEEK A. PROPOSAL TO RAISE THE CIGARETTE TAX.

I UNDERSTAND YOU SUPPORT THIS MEASURE.

>> WELL, THAT CAME ABOUT FROM A PRESS CONFERENCE I THINK THAT WAS HELD IN BOISE THIS MORNING FROM THE HEALTH COALITION.

I HAVE BEEN IN TOUCH WITH THEM FOR THE LAST COUPLE MONTHS.

THEY ACTUALLY WANTED TO BRING THIS LEGISLATION LAST YEAR, AND I DISCOURAGED IT BECAUSE I KNEW THAT LAST YEAR WE HAD TO BRING THE BUDGET BASE DOWN.

WE KNEW THE REVENUE WERE NOT COMING ANYWHERE NEAR WHAT WE WERE SPENDING, AND SO WE KNEW WE HAD TO HAVE THAT BASE COME DOWN AND I DIDN'T WANT THE DISTRACTION OF HAVING A CIGARETTE TAX ON THE TABLE AT THE SAME TIME.

SO I TOLD THEM THEN THAT WE WOULD ENTERTAIN IT THIS YEAR, AND THEY APPROACHED ME A MONTH OR TWO AGO AND WE TALKED ABOUT THE TYPE OF LEGISLATION AND WHAT IT WOULD LOOK LIKE, AND GENERALLY AGREED -- DI NOT KNOW UNTIL TODAY EXACTLY HOW MUCH OF A TAX INCREASE THEY WERE SUGGESTING.

AND I DON'T KNOW AS WE SPEAK HERE TONIGHT THAT THE $1.50 THEY PROPOSED IS WHAT WE'LL FINALLY SETTLE ON.

BUT WE WILL HAVE SOME LEGISLATION THAT WILL COME BEFORE REVENUE TAX THIS YEAR TO INCREASE THE CIGARETTE TAX.

>> LET ME ASK THE BOTH OF YOU, WITH THE BUDGET STATE, WHAT ARE YOUR BIGGEST FEARS GOING INTO THIS LEGISLATIVE SESSION?

>> MY FEAR IS FIRST AND FOREMOST THAT WE WON'T HAVE A CONSENSUS IN THE LEGISLATURE THAT CUTTING ADDITIONALLY OVER WHAT WE CUT THIS LAST YEAR HAS GOT TO BE AVOIDED.

THAT WE WON'T HAVE A CONSENSUS, THAT WE NEED TO ADDRESS THE REVENUE SIDE.

WE'VE CUT $300 MILLION AT LEAST OUT OF TAXES IN THE LAST DECADE, AND THOSE WERE IN REALLY GOOD TIMES.

AND NOW WE HAVE A REAL HURDLE TO GET OVER IN THE RECOVERY, AND I'M -- I HOPE THAT WE CAN COME TO SOME CONSENSUS THAT WE REALLY NEED TO FULLY FUND AS MUCH AS POSSIBLE THOSE BUDGETS.

SO THAT WE DON'T CUT OUR -- HURT OUR KIDS AND HURT OUR SCHOOLS MORE.

>> WHAT'S YOUR BIGGEST FEAR GOING INTO THIS SESSION?

>> WELL, WE ARE -- WE'RE SHORT OF MONEY, THERE'S NO QUESTION ABOUT IT.

THERE IS A PATH FORWARD.

YOU KNOW, WE MAKE REVENUE FORECASTS, AND I THINK THAT THOSE OF US THAT WERE ON THE REVENUE PROJECTION COMMITTEE LAST YEAR LOW-BALLED THE REVENUE FORECAST FOR 2011.

WE DID THAT ONE OUT OF FEAR, HAVING JUST HAD THE EXPERIENCE OF 2010, AND TWO, OUT OF THE KNOWLEDGE THAT IF WE WERE FORECASTED A HIGHER REVENUE NUMBER, THERE WOULD NOT BE THE SUPPORT TO REDUCE BASE BUDGETS LAST YEAR THAT WE HAD TO REDUCE.

WHEN I SAY LAST YEAR, I'M TALKING ABOUT 2011.

>> WE ALWAYS HAVE TO PLAY THAT GAME THAT WE'RE TALKING THE BUDGET WE'RE IN NOW IS FISCAL YEAR '11 EXPRKTS ONE WE'RE GOING TO BE WORKING ON, FISCAL YEAR '12.

JUST TO MAKE THAT CLEAR TO PEOPLE.

DO YOU THINK THE BASE HAS BEEN CUT ENOUGH?

HAVE WE GOT THE BASE -- THE LOWEST WE'RE GOING TO GO?

>> WELL I THINK THAT WE WILL NOT SEE ANOTHER ACROSS THE BOARD CUT LIKE WE HAD LAST YEAR.

I THINK WE PROBABLY WILL SEE SOME ADDITIONAL PROGRAMS CUT.

THERE'S NO QUESTION.

BUT THERE MAY SOMEBODY OUT THERE THAT NEED TO BE CUT.

WHAT THEY ARE RIGHT NOW, I DON'T KNOW.

I'M SURE THAT THE GOVERNOR AS HE'S WORKED THROUGH SOME OF HIS ZERO-BASE BUDGETING PROJECTS, WILL KNOW.

AND I LOOK FORWARD TO WHAT HE HAS TO TELL THE LEGISLATURE COME JANUARY.

BUT I JUST WANT TO POINT OUT, AS WE SIT HERE TONIGHT, I PERSONALLY BELIEVE THERE'S A PATH FORWARD.

I THINK WE'LL CARRY OVER INTO THE 2012 BUDGET YEAR OUT OF 2011 SOME REVENUES.

HOW MUCH THAT WILL BE, I DON'T KNOW.

60, 80?

$180 MILLION, MAYBE.

AND I THINK THAT FOR 2012 WE'LL BE ABLE TO SAFELY PROJECT REVENUE GROWTH.

AND WHAT WOULD THAT FIGURE SOMEBODY LET'S SAY IT'S ROUGHLY 5%.

SO THERE'S ANOTHER 120 MILLION OF ADDITIONAL REVENUE WE CAN FORECAST FOR 2012.

SO NOW ALL OF A SUDDEN WE HAVE GAINED $200 MILLION OF THE $340 MILLION THAT WE SAY WE'RE CERTAINLY SHORT FOR 2012, THE OTHER AMOUNT CAN BE MADE UP THROUGH SOME REVENUE ENHANCEMENTS.

>> GO AHEAD.

>> I GUESS MY CONCERN WOULD BE THIS, AND THAT IS THAT AT PRESENT LEVEL OF FUNDING FOR OUR SCHOOLS, FOR EXAMPLE, THERE -- ANY MONEY TO BUY TEXTBOOKS.

CLASS SIZES ARE INCREASING BECAUSE WE'VE HAD TO LAY TEACHERS OFF, OR FAIL TO PROVIDE THE SUPPORT UNITS TO SEE ADDITIONAL TEACHERS HIRED WHEN WE HAVE KIDS MOVE IN.

YOU HAVE, YOU KNOW, REALLY DIRE SITUATION IN MEDICAID, WHERE WE ACTUALLY DIDN'T BALANCE THE BUDGET.

AND WE SAW PEOPLE WITH DISABILITIES LOSE SERVICES, WE SAW THE CUTTING OF MENTAL HEALTH AND SUBSIDIES TREATMENT IN A WAY THAT WILL GROW OUR BUDGET DOWN THE ROAD IF WE DON'T ADDRESS THAT.

TO ME, THE BASE WE'RE AT NOW, THE LEVEL WE'RE AT NOW, WHICH WE ARE CALLING THE NEW LEVEL, I MEAN, YOU KNOW, DENNIS HAS KIND OF TALKED ABOUT THIS AS THIS IS THE APPROPRIATE BASE, I HOPE THAT'S NOT ANYBODY'S IDEA OF AN APPROPRIATE BASE.

BECAUSE I DON'T THINK IT'S ADEQUATE.

>> LET'S GET TO OUR FIRST CALLER.

GLEN?

>> Caller: THANKS FOR TAKING MY CALL.

I HAVE A QUESTION FOR BOTH YOUR GUESTS.

IF THE TAX CUT IS IN PLACE, WHAT DO YOU DO FOR THE K-12 SCHOOLS?

>> IF WE CONTINUE TO CUT -- >> Caller: RIGHT.

YEAH.

>> OK.

THE SUPERINTENDENT SAID YOU'RE GOING TO NEED ANOTHER $60 MILLION JUST TO KIND OF KEEP YOUR HEAD ABOVE WATER JUST TO STAY WHERE WE ARE WITH THE CONTINUING THE -- NOT RESTORING ANY OF THE BUDGET CUTLE, BUT STAY WHERE WE ARE.

>> YEAH.

YEAH.

JUST FOR SCHOOLS.

AND THEN ON TOP OF THAT, I THINK THERE'S ANOTHER $20 MILLION THAT WE NEED FOR GROWTH IN THE STUDENT POPULATION.

I THINK WE HAVE ABOUT 5,000 MORE STUDENTS WHO HAVE MOVED INTO THE STATE.

AND THAT'S LEAVING IT WHERE IT IS WITH NO TEXTBOOKS, AND -- THE LONG LIST OF THINGS.

TRANSPORTATION.

>> GO AHEAD.

>> I GUESS I POINT OUT THAT THE GOOD SENATOR REFERS TO THE LACK OF FUNDING FOR TEXTBOOKS, WE DID HAVE A LINE ITEM IN THE SCHOOL BUDGET FOR TEXTBOOKS, AND AT THE REQUEST OF THE SUPERINTENDENTS, WE TOOK THAT LINE ITEM OUT AND JUST PUT IT TO THEM TO BE USED AS DISCRETIONARY MONEY.

SO THE MONEY IS THERE FOR TEXTBOOKS, IF -- >> BUT THEY HAD TO USE IT TO PAY TEACHERS.

IT WASN'T A MATTER OF, WE CAN PAY AN ADDITIONAL SET OF TEACHERS, OR WE CAN HAVE TEXTBOOKS.

IT WAS, LET'S JUST ACTUALLY KEEP THE PEOPLE IN THE CLASSROOM BECAUSE THE TEACHERS ARE THE MOST IMPORTANT PART.

>> AND IT WENT INTO DISCRETIONARY SO THEY COULD KEEP THE LIGHTS ON, AND THE HEAT ON.

>> WE HAD AN -- A FACEBOOK QUESTION FROM JOHN WHO SAID, BEFORE I BELIEVE LEGISLATORS ARE DOING ANYTHING TO CUT FURTHER EDUCATION, I'D LIKE TO KNOW IF THEY'RE WILLING TO SHOWLD YOU'RE THEIR SHARE OF THE BURDEN.

AS TEACHER I'M ALREADY RECEIVING 10% LESS PAY, TEACHING MORE STUDENTS FOR LONGER HOURS AND CUSTODIAL SERVICES HAVE BEEN DROPPED COMPLETELY.

ARE LEGISLATORS WILLING TO VACUUM THEIR CARPETS AND EMPTY THEIR WASTE BASKETS AS I MUST DO?

SIR, WHAT DO YOU THINK?

>> GOOD QUESTION.

ACTUALLY, I WON'T SAY WE'VE TAKEN PAY CUT, BUT WE HAVE TURNED DOWN PAY RAISES THAT WERE PROPOSED BY THE CITIZENS COMMISSION THAT DETERMINES LEGISLATIVE PAY.

AS FAR AS THE OTHER ISSUES THAT WAS POINTED OUT, I CAN'T RESPOND TO THEM.

WE DON'T SET OUR OWN PAY.

WE CAN TURN DOWN RAISES, BUT WE CAN'T SET OUR OWN PAY.

IT'S DONE BY A COMMISSION.

>> LEGISLATORS MAKE 16,000 A YEAR?

>> I BELIEVE IT'S 15,800.

>> JUDY ON FACEBOOK ASKED, IT IS TRUE THAT REPEALING THE GROCERY TAX CREDIT IS ON THE TABLE THIS YEAR?

>> DO YOU WANT ME TO TALK ABOUT THAT?

>> SURE.

>> THAT'S ONE OF THE THINGS THAT HAS EATEN INTO ABATABLE FUNDS, IS THE GROCERY TAX CREDIT.

IT USED TO BE $20, AND THEN WE PASSED LEGISLATION ABOUT THREE YEARS AGO WHERE WE STARTED TO IMPLEMENT AN INCREASE IN THE GROCERY TAX CREDIT EACH YEAR WITH THE ULTIMATE GOAL OF HAVING GROCERY TAX CREDIT EQUAL TO THE ENTIRE SALES TAX ON GROCERIES.

>> THAT WAS THE IDEA TO BALANCE THE SALES TAX INCREASE, INCREASE THE SALES TAX, BUT WE'D TRY AND GIVE PEOPLE A LITTLE BIT OF BREAK ON FOOD.

SO THAT WAS PART OF THAT DEAL THAT -- >> WELL, IT ACTUALLY CAME IN AT A LATER TIME, BUT BE THAT AS IT MAY, THAT WAS SOME OF THE ARGUMENT THAT WAS USED BY THE SPONSORS OF THE LEGISLATION.

AND IT WAS SUPPORTED BY THE GOVERNOR.

BUT SO FAR THAT'S EATEN A HOLE INTO THE REVENUE STREAM.

RIGHT NOW WE WILL HAVE ABOUT $100 MILLION THAT WILL GO OUT AS CREDITS ON PEOPLE'S TAX RETURNS THIS YEAR.

SO IS IT ON THE TABLE?

CERTAINLY IT'S ON THE TABLE.

WHAT BECOMES OF IT, I CAN'T PREDICT.

>> YOU KNOW, IT'S REALLY INTERESTING SERVING ON DENNIS'S COMMITTEE WHEN THE GOVERNOR PROPOSED AND HAD HIS OWN PROPOSAL FOR THE GROCERY TAX CREDIT, HE ACTUALLY HAD A PROPOSAL THAT REALLY LOOKED AT THE INCOME LEVEL OF THE PERSON RECEIVING THE CREDIT, AND PUT A FAR LARGER CREDIT ON THOSE WHO REALLY STRUGGLE AND SPEND A LARGE PROPORTION OF THEIR INCOME ON FOOD.

AND I ACTUALLY SUPPORTED THE GOVERNOR'S PROPOSAL AT THAT TIME.

WHAT WE ENDED UP WITH IS AN ACROSS THE BOARD TAX CREDIT WHICH UNFORTUNATELY FOLKS DRIVING -- LIVING IN THE MANSIONS ON THE HILL ARE GETTING THEIR 40, 50, WHATEVER IT IS NOW DOLLARS PER PERSON EVERY YEAR ON THEIR TAX RETURN.

WE'RE SENDING THEM THOSE CHECKS.

AND IN MY MIND THE BUDGET SITUATION LIKE THIS, IT WOULD I THINK BE VERY REASONABLE TO SUSPEND AT LEAST THE UPPER PORTION OF THAT CREDIT FOR UPPER INCOME EARNERS.

>> LET'S GET A QUESTION FROM JOHN.

>> Caller: THANKS FOR TAKING MY CALL.

THIS IS TO BOTH THE GUESTS YOU HAVE THERE.

I LOOK AT THIS AS MAYBE THE STATE GOVERNMENT HAS GROWN EXPONENTIALLY.

THEY'RE THE LARGEST EMPLOYER IN THE STATE.

WHAT I WOULD LIKE TO SEE IS A HIRING FREEZE, AND THEN THROUGH ATTRITION WE CAN GET GOVERNMENT BACK DOWN BELOW SMALLER EMPLOYMENT LEVELS THAN THE PRIVATE SECTOR, AND I'D LIKE TO YOU ADDRESS THAT.

THANK YOU.

>> SURE.

>> OH, WE DEFINITELY HAVE A HIRING FREEZE IN PLACE.

IN FACT, WE'VE LAID OFF AN AWFUL LOT OF STATE WORKERS, AND UNFORTUNATELY FOR THE COMMUNITIES WHERE THEY WORK, THAT ALSO MEANS THOSE INCOMES ARE NOT GOING INTO THE SMALL BUSINESSES IN THOSE COMMUNITIES WHERE THOSE PEOPLE LIVE.

AND SO THERE'S A LITTLE BIT OF A RISK AT MAKING GOVERNMENT TOOMP SMALLER.

THOSE PEOPLE WHO RELY ON ROADS, AND SCHOOLS NEED THOSE STATE WORKERS IN PLACE, AND ALSO THE ECONOMY IN THOSE COMMUNITIES REALLY RELIES ON PEOPLE BEING EMPLOYED.

AND THE STATE IS A LARGE EMPLOYER, AND SO THERE'S A BALANCE IN THERE, ALWAYS, BUT WE DEFINITELY HAVE A HIRING FREEZE IN PLACE AND WE'VE DONE A LOT OF PAY CUTTING, FURLOUGHS, CUTS IN BENEFITS, AND DEFINITELY HAVE LAID OFF A LOT OF WORKERS.

>> FURLOUGHS CAME UP THIS WEEK, THE CORRECTIONS DIRECTOR ASKED THE JFAC TO HELP HIM OUT.

THAT AGENCY HAD 90,000 FURLOUGH HOURS.

90,000 LESS HOURS OF PAID STAFF TIME IN THE LAST YEAR, LEAVING HE SAID IT WAS JEOPARDIZING THE WORK OF HIS AGENCY.

DO YOU SEE THAT AS A PRIORITY THIS SESSION, DEALING WITH THE CORRECTIONS DEPARTMENT AND ITS STAFFING ISSUES?

>> HE MADE A PRETTY IMPASSIONED APPEAL THAT -- TO US THAT PUBLIC SAFETY TO SOME EXTENT IS AT RISK.

AND SO IS THE BUDGET WHEN YOU CONTINUALLY HAVE TURNOVER, AND THAT'S ONE OF THE ISSUES HE ADDRESSED, WAS THERE WERE A LOT OF OVERTIME HOURS THAT BUILT UP, AND NOW THAT'S REALLY HARD TO ADDRESS, BECAUSE THEY'RE TRYING TO HAVE THOSE PEOPLE TAKE TIME OFF.

ON TOP OF THE FURLOUGHS.

SO WHAT HE'S GOT ARE PEOPLE WHO SEE REDUCED PAY HAVE REALLY DIFFICULT AND DANGEROUS WORKING CONDITIONS, AND WHO YOU KNOW, ARE OFTEN TAKING OTHER JOBS JUST BECAUSE OF THE WORKING CONDITIONS.

AND THEN HE HAS TO SPEND I THINK HE SAID ABOUT $14,000 TO TRAIN A NEW PERSON.

AND THAT'S A LOT OF MONEY, AND IT'S NOT VERY EFFICIENT FOR GOVERNMENT, AND NOT REALLY SAFE FOR OUR PRISONS.

>> JOAN, I'D LIKE TO GO BACK TO THE QUESTION THAT JOHN ASKED ABOUT A HIRING FREEZE.

WE HAVE FOR THE FIRST TIME A GOVERNOR THAT IS DOING ZERO-BASED BUDGETING.

AND IN FACT, HE'S TAKING THE AGENCIES ONE AT A TIME AND GOING THROUGH THEM FROM TOP TO BOTTOM, AND LOOKING AT WHAT THEY'RE DOING, AND THOSE PROGRAMS THAT ARE NOT REQUIRED STATUTORILY, HE IS GETTING RID OF THEM.

AND I THINK THIS IS -- THIS IS A BETTER SOLUTION THAN JUST DOING A BLANKET HIRING FREEZE FOR THE VERY REASONS THAT SENATOR JUST POINTED OUT.

IN CORRECTIONS, FOR EXAMPLE, A HIRING FREEZE WOULD NOT BE VERY EFFECTIVE.

WE HAVE TO HAVE THE PEOPLE IN PLACE TO MAN THE SHIPS AT THE CORRECTIONAL INSTITUTIONS.

>> WE HAVE A CALLER, ERIC IN BOISE.

ERIC?

GO AHEAD.

>> Caller: YES, I HAVE A TWO-PART QUESTION.

ONE, WHAT'S THE CURRENT PENSION BENEFITS FOR STATE WORKERS?

AND THE SECOND PART IS, HAS THAT BEEN LOOKED AT BEING REDUCED OR FROZEN BECAUSE CURRENT PRIVATE SECTOR HAS BEEN -- THE PENSION'S BEEN CUT AND WE HAVE TO FUND OUR OWN ON BENEFITS?

>> JOAN, I'VE TRIED TO RESPOND TO THAT A LITTLE BIT.

THE ANSWER TO YOUR QUESTION IS, WE HAVE A VERY GOOD PENSION PROGRAM IN -- NOT JUST FOR STATE WORKERS, IT'S FOR OTHER PUBLIC ENTITIES SUCH AS SCHOOL TEACHERS.

IN FACT, SOME RESEARCH THAT I DID A FEW YEARS AGO WOULD INDICATE THAT A PERSON THAT RETIRES UNDER PERCY WITH REACHING THE RULE OF 90 AND HAVING SERVED 25 YEARS, THEIR DISPOSAL INCOME WILL BE HIGHER IN RETIREMENT THAN IT WILL BE WORKING.

THAT'S HARD TO BELIEVE, BUT WHEN YOU ADD BACK ALL THE DEDUCTS THEY TAKE OUT OF THEIR CHECK NOW FOR TAXES, AND BENEFITS AND THAT, THEY -- >> WHICH IS CONTRIBUTED BY THE EMPLOYEE.

IT'S THE EM-- THE EMPLOYEES CONTRIBUTE -- >> THE EMPLOYEES CONTRIBUTE 38% OF THE COST OF THEIR RETIREMENT, AND THE EMPLOYER CONTRIBUTES 62%.

THERE IS A BIG QUESTION OUT THERE NOW, WHETHER OR NOT THE EMPLOYERS ARE CONTRIBUTING TOO MUCH.

IN ANALYSIS THAT'S DONE BY PENSION FUNDS ACROSS THE COUNTRY, THE BENCHMARK USUALLY IS AROUND 10%.

IF AN EMPLOYER IS CONTRIBUTING MORE THAN 10% OF THE COST OF RETIREMENT, THEN HE'S PROBABLY JEOPARDIZING HIS POSITION.

WE'RE RIGHT THERE.

WE'RE CONTRIBUTING RIGHT AT 10%.

SO IT'S A GREAT FUND, WELL-MANAGED, WELL INVESTED, PRETTY PROUD OF IT.

>> TO THE CALLER'S QUESTION, WOULD I JUST POINT OUT THAT PERCY IS A VERY SEPARATE ENTITY, AND IT'S MANAGED IN A TWHAI DOES NOT MAKE THOSE FUNDS AT THE DISPOSAL OF THE LEGISLATURE.

>> AND IT'S NOT PART OF THE GAP.

THERE'S NOT A GAP THE SLUR TRYING TO FUND, THE PENSION FUND.

>> OUR PENSION IS SOUND, AND I THINK IT'S ALSO TO REALLY IMPORTANT TO CONSIDER THAT IDAHO DOES HAVE QUITE A FEW RETIREES.

A LOT OF RETIREES.

AND THE INCOMES OF THOSE RETIREES ARE A REALLY IMPORTANT PART OF THE ECONOMY OF THE STATE.

IF THOSE FOLKS ARE LIVING CLOSE TO THE BONE AND NOT ABLE TO AFFORD FOOD OR ALL THEIR NECESSITIES, OR TO REPLACE ITEMS THAT BREAK, IT'S REALLY HARD ON THE LOCAL ECONOMY AND THE LOCAL BUSINESSES IF THOSE FOLKS ARE LIVING IN REALLY SPARE POVERTY CONDITIONS.

YOU WANT TO MAKE SURE YOU HAVE RETIREES WHO CAN PARTICIPATE IN THE ECONOMY.

THAT'S GOOD FOR A STATE.

AND I THINK IDAHO'S FORTUNATE THAT HOPEFULLY WE'LL HAVE THAT.

>> ONE OTHER THING, JOAN, PRIOR TO THE SHOW WE TALKED BRIEFLY ABOUT PERCY, AND THE STABILITY IT HAS.

WE HAVE RIGHT NOW ROUGHLY AN UNFUNDED LIABILITY OF ABOUT 17 YEARS.

WHICH SOUNDS LIKE A LOT, BUT IT REALLY ISN'T.

THAT MAKES US ONE OF THE MOST STABLE PENSION FUNDS IN THE ENTIRE NATION.

WE HAVE IN STATUTE NOW THAT WHENEVER THE UNFUNDED LIABILITY IS -- EXCEEDS 25 YEARS, THEN WE HAVE TO INCREASE THE CONTRIBUTION RATE, REDUCE THE BENEFIT.

SO I HOPE THOSE ANSWERS THE QUESTIONS THAT ERIC WAS RAISING.

>> AND THE QUESTION THAT ONE -- THE FACEBOOK QUESTION ABOUT STATE PENSIONS, PERCY IS ONE OF THE FEW THINGS THAT KEEPS PEOPLE WORKING FOR THE STATE WHEN THEY FACE FURLOUGH DAYS AND TIME OFF AND FREEZE CUTS AND WORKING, AND LOWER THAN THE AVERAGE RATE FOR THE PRIVATE SECTOR COMPARISONS.

>> I THINK THAT'S ALWAYS BEEN THE UNDERSTANDING, YEAH.

>> WE HAVE JUST A COUPLE MINUTES LEFT.

I WANTED TO GIVE YOU BOTH A CHANCE TO KIND OF GIVE PEOPLE A PREVIEW, WHAT SHOULD THE CITIZENS BE THINKING ABOUT AND TALKING WITH THEIR LOCAL LEGISLATORS ABOUT BEFORE WE GO INTO THIS NEXT SESSION?

ARE THERE PRIORITIES TO MAKE CLEAR BEFORE WE STEP INTO JANUARY?

>> WHEN WE FACE A HOLE IN THE BUDGET LIKE THIS, AND WHEN WE LOOK AT, YOU KNOW, IDEAS THAT A 7% REDUCTION IN SCHOOL FUNDING IS SUPPOSED TO BE THE NEW NORM, IF PEOPLE DO FEEL THAT THEIR KIDS ARE IN TOO CROWDED OF CLASSROOMS, OR IF THEY REALLY FEEL WE NEED TO HAVE MEDICAID THAT SERVES PEOPLE WITH DISABILITIES, THEN I THINK IT'S IMPORTANT TO LOOK AT THE REVENUE THAT WE -- AND THE TAXES IN THE STATE, AND SEE WHAT -- WE DID CUT TAXES OVER $300 MILLION IN THE LAST DECADE, AND ONE OF THOSE THINGS WE DID, WE SHIFTED FROM PROPERTY TAXES TO SALES TAXES.

AND AS I JUST GOT MY TAX ASSESSMENT TODAY, AND IT'S DROPPED A LOT.

AND IN FACT IT'S DROPPED MORE THAN I THINK IT DID WHEN WE SHIFTED THAT MONEY FOR SCHOOLS ON TO THE SALES TAX.

IF WE REVERSED THAT NOW THAT THE ECONOMY AND PROPERTY TAXES ARE COMING DOWN, WE WOULD HAVE MORE STABLE FUNDING FOR SCHOOLS, AND MORE REVENUE IN A -- AND A POTENTIAL FOR EVEN LOWERING THE SALES TAX IF WE WANTED, OR EVEN TOTALLY ELIMINATING THE GROCERY TAX.

BECAUSE IT WOULD BE ENOUGH MONEY TO FUND THAT ELIMINATION OF THE GROCERY TAX, WHICH WOULD BE EVEN BETTER THAN A GROCERY TAX CREDIT.

>> WHAT ADVICE DO YOU HAVE?

>> WELL, LET ME TALK ABOUT THAT JUST BRIEFLY.

THE SENATOR WAS REFERRING TO ACTIONS WE TOOK IN 2006, AND I DON'T KNOW VERY MANY HOMEOWNERS OUT THERE THAT WOULD LIKE US TO REDUCE THEIR HOMEOWNERS EXEMPTION FROM $100,000, COM IT IS NOW, DOWN TO 50,000, WHICH IT WAS.

>> I DON'T THAT I WAS WHAT SHE WAS REFERRING TO, ACTUALLY.

>> BUT THAT'S PART OF WHAT THE COST THAT SHE'S TALKING ABOUT, $300 MILLION IN RELIEF THAT WE'VE GIVEN.

THE ACTUAL FIGURE IN 2006, AND I COCHAIRED THAT COMMITTEE, THE ACTUAL TAX RELIEF THAT SOME TAXPAYER GOT, AND WE CAN ARGUE WHO THAT TAXPAYER WAS AT THIS POINT, BUT IT WAS $50 MILLION.

THE REST OF THE MONEY WE MADE UP BY SWITCHING FROM PROPERTY TAX TO SALES TAX.

>> DENNIS, JUST TO CLARIFY, I'M ALSO REFERRING TO THE INCOME TAX CUTS IN 2000 AND 2001.

PUTTING ALL OF THOSE THINGS TOGETHER, BECAUSE THERE WAS ALMOST $250 MILLION IN CUTS OVER THE COURSE OF THAT TIME, PLUS THE $50 MILLION FROM THE SALES TAX SHIFT.

AND I REALLY WAS REFERRING TO THAT.

WE WERE MOVED -- WE REMOVED THE SCHOOLS FROM THE PROPERTY TAX, WHICH LEFT THEM WITH FAR LESS STABLE FUNDING THAT'S ALL IN THE CONTROL OF THE LEGISLATURE.

>> DISTRICTS HAD TO RAISE THEIR LEVIES, TO -- >> WELL, TIME OUT JUST A MINUTE.

YOU'RE MISSING THE LITTLE FACT OF THE EQUALIZATION FORMULA THAT WAS IN PLACE WHEN WE HAD PART OF THE PROPERTY TAX FUNDING SCHOOLS.

AND THAT EQUALIZATION FORMULA STILL, JFAC, YOUR COMMITTEE, DETERMINED WHAT THE BECOMES FOR SCHOOLS WAS.

AND WE EQUALIZED THAT AMONGST THE SCHOOLS, THE RICH SCHOOLS, THEY COLLECTED MORE PROPERTY TAX, THEY GOT LESS FROM THE STATE.

THE POOR SCHOOLS COLLECTED LESS PROPERTY TAX GOT MORE FROM THE STATE.

SO THAT'S AN ARGUMENT WE COULD TALK ABOUT FOR A LONG TIME.

>> AND UNFORTUNATELY WE'RE RUNNING REALLY SHORT.

YOUR COMMITTEE IS GOING TO BE ONE OF THE BUSIEST I THINK THIS SESSION AS PEOPLE TRY AND FIGURE OUT HOW TO RAISE -- WHETHER IT'S $300 MILLION OR $100 MILLION.

DO YOU SEE ANY OTHER POTENTIAL AREAS WHERE WE MIGHT FIND REVENUE ENHANCEMENTS?

DO YOU THINK LIQUOR TAX -- THE TAXES ON ALCOHOL WILL GO UP?

>> WELL, THE HARD LIQUOR, OF COURSE THAT'S CONTROLLED BY THE LIQUOR COMMISSION, AND THEY'VE BEEN RAISING IT RIGHT ALONG.

I WOULD NOT EXPECT TO DO ANYTHING THERE.

BEER AND WINE, YOU KNOW, TWO YEARS AGO WE DEBATED THAT AT LENGTH IN COMMITTEE.

AND THEY'VE BEEN GETTING BY PRETTY CHEAP.

THEY HAVEN'T HAD A TAX INCREASE SINCE 1961.

AND SO I SUSPECT THOSE ISSUES WILL COME UP AGAIN THIS YEAR.

THERE ARE OTHER THINGS THAT WE'LL TALK ABOUT.

THERE ARE SOME EXEMPTIONS OUT THERE WE'LL TALK ABOUT.

I'LL SAY THERE'S NOT ANYTHING THAT'S OFF THE TABLE AT THIS POINT.

IT WOULD BE VERY INTERESTING TO SEE WHAT THE GOVERNOR'S PROPOSALS ARE, AND THEN SEE HOW WE CAN WORK WITHIN HIS PROPOSALS.

>> JFAC IS ALWAYS THE CENTER OF ACTIVITY.

>> YEAH.

AND A REALLY PRETTY SOBER PLACE THESE DAYS, IT REALLY IS.

SO WE WILL BE EAGERLY AWAITING WHAT DENNIS IS DOING IN THE REVENUE AND TAXATION COMMITTEE, AND HOPING THAT WE CAN SEE THE STATE PULL TOGETHER TO TRY AND GET US THROUGH THIS REALLY DIFFICULT TIME.

>> I APPRECIATE IT.

WE HAVE A COUPLE OF PEOPLE ON THE PHONE, WE'LL GO AHEAD AND CATCH OUT OTHER SIDE WHEN WE DO OUR WEB EXTRA.

IF YOU'RE ON THE PHONE, STAY WITH ME AND WE'LL GET YOU YOUR QUESTIONS ANSWERED WHEN WE DO OUR WEB EXTRA.

I WANT TO SAY THANK YOU VERY MUCH TO BOTH OF YOU FOR BEING HERE.

THANK YOU VERY MUCH FOR JOINING US THIS EVENING.

>> THANK YOU, JOAN.

>> AND BEFORE WE GO, IF YOU WANT TO LEARN MORE ABOUT THIS ISSUE, WE'VE GOT LOTS MORE INFORMATION ON THE "DIALOGUE" WEBSITE.

YOU'LL FIND LINKS TO THE JFAC AGENDA, INFORMATION -- MORE INFORMATION, AND THAT WEB EXTRA CONVERSATION.

YOU CAN GO TO IDAHOPTV.ORG AND CLICK ON "DIALOGUE."

YOU'LL ALSO FIND US ON FACEBOOK.

BECOME A FAN, SEARCH FOR US, "DIALOGUE" ON IDAHO PUBLIC TELEVISION.

YOU CAN SUBMIT QUESTIONS TO US THERE.

YOU'LL ALSO FIND OUR SHOWS ON YOUTUBE.

SO THERE'S LOTS OF DIFFERENT WAYS TO FIND "DIALOGUE" AND TO CONTRIBUTE.

SO MAKE THE EFFORT, JOIN US ON OUR SOCIAL MEDIA.

AND THANK YOU FOR TUNING IN THIS EVENING.

WE'LL SEE YOU HERE NEXT TIME ON "DIALOGUE."

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