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Good money, bad money


It is true that the Idaho Legislature’s Constitutional mandate is to appropriate money. And it is true that the State of Idaho got a big check from the Federal Government this last summer. It came to around $1.25B dollars, from that CARES Act. And it is true that most of this big pot of Federal IOU’s got spent without any legislative action.

Keep in mind, the Idaho general fund annually spends about $4B of our state tax dollars. The legislature usually appropriates the $3.4B in Federal dollars we spend too.

Now, for the first few weeks of this legislative session, we have heard how the Idaho legislature is upset with our governor for his “unconstitutional” actions. But it seems their most pinched-face arguments have to do with restricting “freedoms”, not the money.

Will the legislature put this big pot of money received and spent on the books? Will it be part of the Joint Finance and Appropriations actions? I haven’t heard such rumblings.

Back when my hip didn’t hurt so much and those marble stairs to the third floor of the Capitol didn’t intimidate me, I served for a few years on that committee, JFAC. One Senator made a point that the Federal dollars for transportation were not in the budget request for the Department of Transportation. We were just voting on the Idaho dollars. He argued that the Federal dollars needed to be included in what was voted on. I agreed with him. We didn’t turn the money down, or quibble about it, we just made sure it was part of the accounting. I guess money for gravel and asphalt is good money.

It would be a lot of work to review, vote on and approve all those millions, about a billion, already out the door. But if the legislature wants to have a power play with the governor, this is where they have clear Constitutional standing. I don’t hear gripes about how this money was spent, though. They must trust the governor it went to the right places. Maybe they just trust that this was good money.

Likewise, we heard this last week that Idaho’s federal money for the Medicaid program will be boosted this year, so Governor Little told JFAC he was taking the proposed $30M in Medicaid cuts off the table for this year. I wonder if that is good money?

Idaho’s tax revenues have sure weathered the Covid storm. Every month for the last nine months we have beat predictions. Right now, it looks like the state will be sitting on a $600M surplus just for this fiscal year. And our reserve fund balances are about $500M.

But there’s one thing we know for sure, that Medicaid Expansion money was bad money. Idaho passed up on it for four years until an initiative passed. But it’s coming in the door now. So, it seems, some federal dollars are good, some are bad.

I can understand the reluctance about Medicaid money. There is a requirement that the state has to spend it’s share for every federal dollar we take. In regular Medicaid, the match is about 3:1; that is, 3 federal dollars require one Idaho dollar. For Medicaid expansion the match is 9:1. Nobody likes getting into long term obligations if you expect instability.

But I’m going to argue, the fact that Idaho expanded Medicaid eligibility right before we got hit with the pandemic helped stabilize our economy. Many studies in many states have shown such a benefit, so I’m not just making this up.

And all that money Brad sent out the door last summer has probably helped our tax revenues too. But if he would have been playing by the book, he should have called the legislature into session for the appropriation. But hey, it was good money, right?


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