Gov. Butch Otter gave his combined state of the state address and budget message Monday, indicating that he will support increased car-registration fees and local-option taxes to back road and highway projects.

Otter’s budget calls for $134 million of grant anticipation revenue vehicle bonds, or Garvees, that will be secured by future federal transportation grants.

The otherwise debt-averse Republican also wants lawmakers to appropriate $58 million for the early retirement of other state-backed bonds, and proposed using $70 million in cash to finance a mental health facility for Idaho prisoners.

The state’s most pressing financial need is highway and road funding, Otter said. That’s why he supports allowing local-option sales taxes for public roads, if they are approved by a supermajority.

Otter also wants to move all state police funding onto the general fund budget to free up fuel tax revenues for transportation projects.

“The fact is that every taxpayer benefits from the Idaho State Police,” he said. “It should be part of the general fund budget, and more of our fuel taxes must be put back into our roads.”

The governor said he won’t support an increase in the fuel tax, currently at 25 cents per gallon, but would be willing to support higher vehicle-registration fees if they generate money for highways.

Otter said he also wants to roll out a zero-based budgeting system for the state, in which budgeting decisions would be based on a ground-up review of an agency’s functions, as opposed to using the previous year’s budget as a starting point.

Otter’s plan calls for agencies to be placed on a rotating schedule under which they would have to submit a zero-based budget every six years, beginning in fiscal 2010.


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