by Logan Finney, Idaho Reports
Just a few blocks from freshman lawmaker orientation at the Idaho capitol, policy makers and business leaders gathered Wednesday for the annual Associated Taxpayers of Idaho conference.
“We all need to get to know each other,” association president Miguel Legarreta said. “There’s no way we can communicate without it.”
The variety of attendees – with elected officials from city councilors and county commissioners to state lawmakers and constitutional officers – is a selling point of the annual conference, which is commonly seen as an unofficial start to the lawmaking season.
Fostering Communication
“As a legislator, I am excited to be at this meeting,” lieutenant governor-elect Scott Bedke noted in his opening remarks. “We don’t always listen to the [local] elected officials, and we should.”
Bedke reflected on the massive turnover among the incoming legislature, which he described as the largest freshman class of lawmakers in modern memory. He also noted that the newcomers will have an outsized impact on the statehouse culture come January.
“They don’t know what they don’t know, but the responsibilities haven’t changed,” Bedke said.
The outgoing House leader also noted that a lack of experience could open the door for new ideas and conversations to make their way into the policy arena.
“These folks will listen in a way the old ones didn’t,” Bedke advised the conference. ”Go create relationships.”
Economic Trends
The morning session focused on economic trends in Idaho and in the Mountain West region.
“We all want to think COVID is over, but we’re still feeling the effects in the economy,” said Zions Bank chief economist Robert Spendlove.
Spendlove criticized the federal government for overspending on stimulus measures after the initial pandemic response in 2020, and criticized the Federal Reserve for taking too long this year to react to inflation.
National data shows that Americans put a lot of money into savings during the stimulus, and it appears inflation has not yet eaten into those household budget reserves.
“All of the public policy was pointed at propping up demand,” rather than addressing supply-side issues caused by the pandemic, said chief economist Phil Dean from the Kem C.Gardner Policy Institute at the University of Utah. “This was not primarily an economic recession. It was a public health-related recession.”
People have the perception that the economy is bad right now, Dean said, but he argued the economy is actually returning to a normal that feels disconnected from very favorable market conditions pre-pandemic.
Current workforce participation trends were exacerbated – but not ultimately caused – by the pandemic, Dean said. Baby Boomers are retiring in high numbers, while teenagers are generally participating in the workforce and college students generally are not.
“I’m not sure we have labor shortages as much as we have wage shortages,” Dean said. “People have been predicting this [workforce shortage] for 70 years.”
The economists repeatedly emphasized that there is a lot of noise and uncertainty depending on which data you look at, but state economies in the Mountain West and the South are generally strong compared to the rest of the country.
“We have a real surplus in our state budget,” Legarreta said. “But what’s real, what’s sustainable?”
Dean advised the lawmakers and staff in the audience to spend one-time federal and state funds on long-term projects with multigenerational benefits. He also urged them to ensure budget forecasts include early warning signs for possible economic downturns, and to stress test state financial systems for the worst predicted scenarios.
“The ‘just in time’ approach has failed. We need to build in redundancy and resilience into our systems,” Dean said. “It’s better to respond correctly than to perfectly predict the future.”
