BOISE — A House committee moved forward with proposals that would raise millions of dollars for Idaho roads by changing the way the state saves and spends its money.
One bill would move nearly three-quarters of the state's rainy day fund into a new account with a higher investment rate and use some of the money to pay for transportation projects in the state. It received unanimous approval from the House Transportation and Defense Committee on Tuesday.
Chairman Joe Palmer, who sponsored the bill, said the state would have an extra $17 million last year under the bill.
This isn’t taking more from taxpayers, said Palmer, R-Meridian, “it’s investing their money properly.”
The bill would take $272 million from the budget stabilization fund and put it in an endowment fund, which would earn a higher interest rate. Keith Bybee, a budget policy analyst, said a similar account earns 5% on average.
Each year, 5% of the money in the new endowment fund would be transferred to the Strategic Initiatives Program, which would pay for a variety of transportation infrastructure projects throughout the state. The program would receive an additional one-time transfer of $38.2 million in the first year.
Bybee said the more aggressive investment would guarantee a 5% return that would be siphoned off into the program.
“It creates a higher earning potential for our savings account and also creates a stable funding stream for transportation,” Bybee said.
About $101 million would be left in the current budget stabilization fund. Bybee said that account earns between 1% and 3% interest, which goes to a state building fund. Last year, the building fund received about $9 million from the interest on the stabilization fund.
The bill now moves to the full House. Similar legislation passed the chamber last year before dying in the Senate.
Palmer introduced another bill Tuesday that would increase the amount of sales tax dedicated to transportation.
About 1% of the sales tax collected in Idaho goes to a transportation account. Last year, the account received about $18 million. Palmer’s proposal would double the amount received in the account to 2%, or about $36 million annually.
Sales tax grew $100 million last year and is expected to eclipse $2 billion this year, Palmer said.
Rep. John Gannon, D-Boise, pointed out that the state’s budget is tight and agencies are being asked to limit spending.
Palmer said infrastructure investments are needed and failing to do so could hurt the economy.
“If we invest in our infrastructure properly, I believe that brings in more sales tax money,” Palmer said. “We’re increasing at $100 million a year — a huge portion of that is because we have a good transportation system and we need to continue that transportation system moving forward.”
The committee unanimously approved introducing the bill and will hold a hearing in the future. A similar bill was introduced last year but did not pass.