Gov. Otter focuses on education, transportation in his Idaho State of the State address

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BOISE, Idaho — Idaho Gov. C.L. "Butch" Otter on Monday proposed a 7.4 percent increase to $1.47 billion to fund Idaho schools, making it his highest proposed education hike since 2008, before the economic downturn.

Otter made the proposal in his ninth State of the State address to lawmakers. It signaled the beginning of the 2015 Idaho Legislature, where state lawmakers will spend the next few months in Boise working to balance the state budget and pass legislation.

Otter's overall suggested budget increase is roughly $152 million more than last year's budget — or 5.2 percent— and totals just over $3.08 billion.

"In Idaho, public schools ... are essential to the health of our families, our communities and our economy," Otter said. "They are the key to our prosperity and Idaho's competitiveness in the global marketplace."

Otter is also requesting nearly $8.9 million to fund the state broadband program that provides internet services in Idaho's public schools through the upcoming 2015-2016 fiscal year.

The funding request came at a time when a district court voided the $60 million broadband contract in November and sent education officials scrambling to determine their next move that does not disrupt the services the broadband program, known as the Idaho Education Network, provides to Idaho students.

Education issues dominated the majority of the 45-minute speech but Otter also pressed lawmakers to find a way to improve the state's aging roads and bridges as well discuss possible Medicaid expansion options.

However, while Otter provided detailed proposals for his education plan, he did not propose any additional funding to pay for the 785 state and local bridges considered structurally deficient in the state. He pointed out that number of bridges will grow to 900 by 2019.

"I am not going to stand here and tell you how to swallow this elephant," Otter said. "That would be contrary to all we have learned about each other and the people we serve in recent years. But we all know it must be done."

Otter said he would not consider transportation legislation that might compete for general fund tax dollars, education or other required public programs or services.

That means lawmakers may consider raising the gas tax to cover the maintenance costs, said state Republican Sen. Bert Brackett of Rogerson, who chairs the Senate Transportation Committee.

"We might test that. I want to think that we have a different attitude from several years ago," Brackett said, referencing the 2009 failed attempt to raise the gas tax by 7 cents.

As far as other possible changes to Idaho's taxes, Otter said he wants to see marginal tax rates for Idaho's individual and corporate income tax drop below 7 percent.

His proposal would reduce the income tax rate for those in the state's highest tax bracket to 6.9 percent from the current rate of 7.4 percent. The reduction would be phased in over five years.

Otter then urged lawmakers to hold a hearing on expanding Medicaid eligibility in Idaho.

Idaho's Republican-controlled legislature has been hesitant to discuss Medicaid expansion, an option provided under the Affordable Care Act, but have acknowledged over the past years that the state's current indigent care system is broken.

Otter said he agrees with most of the findings his work group submitted in 2014 that proposed allowing adults below 100 percent of the poverty line to qualify for Medicaid coverage. Although, Otter would not detail what he did not support when pressed by reporters after his speech.

The report outlined that adults earning 100 percent to 138 percent of the poverty line may purchase private insurance on Idaho's health insurance marketplace using federal dollars.

House Minority Leader John Rusche of Lewiston said that with Otter pushing more education funding, fewer tax cuts and discussing possibly expanding Medicaid eligibility, he felt that the governor was lining up with more Democratic goals than Republican ones compared to years past.

"This is very supportive of Democratic principles," he said. "We welcome this approach."

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