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Idaho State-of-the-State, budget address
Governor C.L. 'Butch' Otter
January 8, 2007

(Note: For reader convenience, Gov. Otter's address is divided into three parts.)

Mr. Speaker, Mr. President, Mr. Pro Tem, distinguished members of the Legislature, Mr. Chief Justice and distinguished members of the Judiciary, fellow Constitutional Officers, and my fellow Idahoans.

It’s great to be back!

And it’s wonderful to stand here today before so many dear friends – so many people I respect, admire and love.

A lot of water has passed under the bridge since I last appeared in this chamber in any official capacity. Much has changed … for all of us.

Mr. Pro Tem … Being back here in the Capitol brings back many pleasant memories of my time presiding over the Senate with your great leadership. Welcome back to Boise.
I also look forward to working with our new Speaker … Thank you for sharing your chamber with me today Mr. Speaker.

I also want to offer a special greeting to all my fellow freshmen with us here today. Like you, I’m still learning this job, folks. I’ll do everything I can to make sure your time here goes smoothly, and I hope you’ll do the same for me!

Here at the Statehouse and beyond, we all have been ably led during the past seven months by our 31st governor, who once again now is our lieutenant governor.

Mr. Lieutenant Governor, thank you for the outstanding service that you and Vicki have provided for the people of Idaho, and for your commitment to our great state. You have set the bar high as Idaho’s chief executive, and I look forward to working together to continue that record of success.

Most importantly for me personally, Idaho has a great new First Lady.

I have found a true partner in Lori. She shares my excitement and enthusiasm for this new chapter in our lives.

I want to thank the members of my transition team. They did an outstanding job of reviewing the status and needs of state government and recommending both personnel and program choices for my consideration. They have done the people of Idaho a tremendous service.

My former colleagues in Idaho’s congressional delegation also deserve our thanks. We are richly blessed by their representation. I will miss our camaraderie and our day-to-day work together, but I look forward to our new relationship and to applying what I learned at their side in Congress to new challenges here at home.

I am deeply honored and humbled to stand before you today as Idaho’s 32nd governor. I also congratulate those of you who recently were elected or re-elected, on both sides of the aisle. Senator Stennett and Representative Jaquet, I am eager to focus on our common goals and aspirations for the people of Idaho.

Certainly one of the lessons I learned in Congress is that partisan bickering gets us nowhere, so I look forward to a positive and constructive relationship with the minority party.

The citizens have entrusted us all with the responsibility of representing their interests to the best of our abilities. I am here today to discuss where Idaho stands, and how we can help to shape Idaho’s future.

2006 was a banner year for Idaho’s economy. Our three-point-three-percent unemployment rate was the lowest in history. Almost three-quarters of a million Idahoans were working last month – 23,000 more than a year earlier. Our exports approached a record $4 billion last year, and only three states are creating jobs faster than Idaho.

In fact, I’m pleased to announce today that Hawaii-based Hoku Scientific has agreed to open a plant in Pocatello for manufacturing solar modules and polysilicon for the solar energy and integrated circuit markets. The company is investing $250 million and will create over 200 jobs with a payroll of more than $10 million a year.

That’s just the latest good news in what’s become an enviable record for Idaho.

Maintaining it will require that we continue living within our means and that we remember it is the people – not the government – who deserve credit for whatever success we attain.
Our job is to create a political and economic climate that enables people to succeed.

To that end, my administration will be based on firm principles, driven by sound data, and committed to customer service.

Today I am going to outline my plans for a state government that will continue delivering essential services, while being more user friendly and consumer focused.

During my terms as a member of Congress, I was consistently frustrated with our federal government’s inability to operate with a balanced budget. As your governor, I now have the opportunity – in fact, the constitutional mandate – to submit a balanced budget. Today I do that with great pleasure.

Our revenue situation this past year has been robust. We have enough general fund revenue to meet all our budget obligations, and have accumulated a significant surplus. I commend the Legislature and the lieutenant governor for your foresight in applying most of the ongoing surplus to permanent property tax relief.

When faced with the option of using taxpayer dollars to permanently expand state government or enacting tax relief for our citizens, you made the wise choice.

For fiscal 2008, we will have enough revenue to maintain current operations – an estimated $2.7 billion. Chairmen Cameron and Bell, I am recommending that we neither significantly expand existing programs nor add any major new initiatives would require a continuing revenue flow.

Idahoans have made it abundantly clear that raising taxes is not an option. That’s no surprise to most of you. Those who doubt it need only look at the results of last year’s election.

There is no doubt that Idahoans want leaner, more efficient and effective state government. That’s reflected in my recommendation for a modest 3.1-percent increase in our base operating budget.

We have great public employees. But we’re not yet providing the kind of competitive salaries needed to keep our most skilled public servants, or to attract the most qualified people to fill the vacancies when they leave. For too long we’ve shorted them on pay and then padded their benefits.

To begin changing that, it’s my recommendation that we fully fund a 5-percent merit-based increase in employee compensation. This is an important step toward making our state salaries more competitive. We need a more market-driven compensation package for our state employees, and I look forward to working with Chairmen Schaefer and Andreason to get it done.

We do have a substantial amount of one-time revenue that will be available in fiscal 2008.
While it’s tempting to use this money for permanent operations of state government, I urge you to be cautious in committing to ongoing expenditures. In recent months we’ve seen revenues coming in above projected levels. But our economic growth may begin cooling to a more sustainable level. So we must avoid putting ourselves in a situation that forces possible budget holdbacks later on.

Once again, I commend you for providing permanent property tax relief last year. But we must not rest on our laurels. I encourage you to continue looking for other opportunities to ease the burden on Idaho taxpayers, including the issue of personal property tax.

Published 1-12-07