The Biden administration kicked off its case against Google this week, starting what some commentators have eagerly called the “antitrust case of the century.” What makes this case so important? The federal government has advanced the argument that Google behaved anti competitively when promoting its search product. But if you listened to the opening arguments delivered on Wednesday, the DOJ doesn’t seem to have much of a case. The Department of Justice claims that Google has a dominant position in the search market and that it has leveraged relationships with other companies to unfairly maintain that dominance. This, in the government’s view, violates the Sherman Act. For any major antitrust case to succeed, the government has to make the case that Google’s actions harmed consumers. The DOJ lawyer laid out the government’s case by arguing that Google’s dominance led to data access and that the access to data led to the quality of its search engine quality. Dominance, data, quality. In other words, the benefits to consumers happened after the alleged wrongdoing took place, and so Google can’t argue that their success was due, in the first place, to consumer benefit. This is, of course, the complete inverse of what actually happened. When Google Search first launched it was just one service among many others. The secret to its success was how the company built Google Search and how they continuously revamped it. That early success drove more and more customers to the service, allowing the company to use data to add further polish that made it more attractive to customers and businesses. Ultimately this is what drove Google Search into a leading position. Our antitrust laws don’t exist to punish success. If you make the best car, computer software, or pizza in town and customers choose your product over others, you haven’t broken the law. In Google’s case, they built the best search engine in history and now, years later, the government is trying to punish them for it. The DOJ has a second argument that they previewed during opening statements: Apple contracting to use Google Search as the default browser on the iPhone constitutes an anticompetitive action. This argument requires a really low opinion of private businesses and the American public. For one, private companies are free to enter into contracts with each other. If Apple thinks there is value in partnering with one search engine over another, it's likely due to the inherent excellence of the product in question. That’s not much of an argument against Google that another company loves its products and knows its customers will too. Additionally, iPhone users are free to switch their search engines. If you have an iPhone you can go into your settings right now and switch to other services like Yahoo, Bing, or DuckDuckGo. It's likely the government will eventually lose this case because of a simple reality: Google Search is popular because people like to use it, not because of any default. For example, Google is the most popular search on Bing and 90% of Windows users change the default search from Bing to Google. The DOJ will spend the next two years fighting this case and waiting for a probable loss. When that loss does come it could be used to justify giving the DOJ and FTC additional power and flexibility to bring charges in the future. Proper enforcement of existing antitrust law is important, and legitimate cases should be brought when the law is violated. But these types of pie in the sky cases spell disaster for the free market and for the American consumer.

With record property tax assessment increases occurring in states like Idaho, Montana, and Wyoming, homeowners are concerned about the potential impact on their property tax bills. First, it is important for taxpayers to know that assessments are just a part of the calculation. The main driver of property taxes is spending increases approved by policymakers and voters themselves through levies. This is why efforts to restrict property assessments are often misplaced and lead to other problems. The better way to control property tax increases is on the spending side and/or with levy restrictions. One way to help bring greater transparency to the fact spending is the main cause of property tax increases is with a reform called Truth in Taxation. Truth in Taxation currently exists in Iowa, Kansas, Nebraska, Tennessee, and Utah. Here is how the Salt Lake Tribune describes Utah’s Truth in Taxation law: “This law sets up a system that allows taxing jurisdictions (think cities, counties, school districts, water districts) to receive only the amount of revenue they collected the year before, plus whatever taxes they got from new development in their jurisdiction. Because of those constraints, when property values in a jurisdiction rise, tax rates automatically adjust downward to offset the additional revenue that the taxing entity would have collected from appreciation. If a taxing jurisdiction wants to create additional revenue to pay for things like new public safety services or water infrastructure, officials in that jurisdiction would need to hold a truth-in-taxation hearing.” Utah’s Property Tax Division further explains: “Property Tax increases require a Truth in Taxation process of public disclosure. Taxing entities are required to follow a series of date specific steps, including notification to the county, newspaper advertisements, parcel specific notices, and a public hearing, before adopting a property tax rate above a calculated certified tax rate. The timeline is different for a fiscal year taxing entity (budget cycle July 1 to June 30) and a calendar year entity (budget cycle Jan 1 to Dec 31).” Here is an example of the “Tax Increase Checklist” and “Tax Increase Requirements” for property taxes in Utah under Truth in Taxation. Montana Governor Gianforte hit the bullseye when he recently said: "To ease the property tax burden, we must reform our system and bring greater transparency, accountability, and responsibility to local spending. I’m committed to getting it done." Even though Idaho doesn’t have a statewide property tax and the legislature recently enacted property tax rebates to help with the local tax burden, Truth in Taxation is still needed to help empower taxpayers to better engage and understand their property tax burden and the connection to spending. With the cry for property tax reform getting louder, policymakers in Idaho, Montana, Washington, and Wyoming should focus their efforts on improving transparency and voter engagement with Truth in Taxation.

The start of the school year means making new friends and exciting opportunities for students. It also is the time for parents to evaluate the effectiveness of school options. One way to help guide this evaluation process is with annual school assessments. Those details are now available for Wyoming parents. According to the Wyoming Department of Education (WDE): “Wyoming’s 2022-23 assessment results show slight increases in overall proficiency rates within each content area. Overall student proficiency rates increased in English Language Arts (ELA) by 0.5%, in Math by 0.7%, and in Science by 1% compared to 2021-22. However, proficiency rates in ELA in grades 4, 5, 7 and in Math in grades 4 and 9 declined slightly.” Wyoming Superintendent of Public Instruction Megan Degenfelder said about the scores: “Overall increases in assessment scores, no matter how minor, is promising, as our schools continue to work to achieve pre-pandemic levels. Many districts saw double-digit growth in content areas and/or grades and that should be celebrated. But overall, we must do better. While our state standards and assessment cut scores are set intentionally high, proficiency below 50% in any content area or grade isn’t good enough. It wouldn’t be good enough in the private sector, and it isn’t good enough for our kids. At the WDE, we are actively working to bolster our statewide system of support and will directly work with schools and districts to improve these assessment scores.” Public charter schools in Wyoming continued to perform well as noted by the Wyoming Tribune Eagle: "The district’s two public charter schools, PODER Academy and PODER Academy Secondary School, were among the 12 institutions statewide that maintained a rating of 'exceeding expectations' for a third year in a row." WDE says school performance ratings are determined from a variety of indicators: Student growth Readiness Achievement Equity English language proficiency Postsecondary readiness Graduation rates Credits earned Here are additional details on the Wyoming K-12 test results: Full assessment data District by district snapshots by content area and grade Parents & Community Members Overview outlining the assessment process and additional current results Overall School Performance Rating Report by Year The Joint Education Committee of the Wyoming legislature met last month to consider a series of proposals aimed at improving education outcomes. Providing parents and students with more school choice options is the next test Wyoming policymakers need to pass.

During drought years, water restrictions are standard practice. Lawns turn brown and showers become grudgingly shorter. Farmers choose lower water consuming crops and acreage may lay fallow until wetter conditions return. The necessity of this water resource requires everyone to change their habits and practices to protect its availability. Now imagine if all resources needed for a business were in drought-like conditions year after year. That is the intensifying situation farmers face as every level of government adds to the onerous policy burden. Regulations restrict the resources available to farmers, hurting their ability to be self-reliant. Water, labor, land, and technology are harder to access as policy makers twist rules to meet ideologies. Farm policy ideology varies intensely across many divides. Protecting farms and providing access to affordable food are two values governing much of the agricultural policy discussion. Free market agriculture encourages farmers to be more self-reliant and empowers capable adults to meet their own food needs and wants through their own means (food self-reliance). Many limited resources are needed by farmers to create an affordable and dependable food supply. Water, labor, land, minerals/oil, technology, trade, research, marketing, and financial inputs are all limited resources, though the limitations are natural and man-made. Regulations put additional limitations on these resources, adding to the difficulty of producing a reliable food resource. The increasing regulatory burden will consolidate domestic farming operations and agricultural businesses, endangering an accessible and affordable food supply. Policies affecting agriculture at the federal, state, and local level should seek to remove restrictions on these resources. Agricultural regulations often affect the availability and accessibility of resources. For example, policy efforts to increase agricultural water supply makes more available for use. Other regulations can affect accessibility to existing water, such as clean water legislation and salmon protections. Viewing American farmers and families as victims needing to be saved has only compounded their challenges. Regulations, in a myriad of forms, have tightened the obtainability of farm inputs and hurt the ability of farmers to respond to market demands. The resulting farm consolidation has created a food supply tied to higher food costs and an unreliable supply. The post-pandemic food prices and shortages illustrate the problems of farm consolidation driven by overregulation. Farmers have the potential to thrive when they are unencumbered by excessive regulations. These independent farms can deliver a safer, more reliable, affordable food supply. Mountain States Policy Center is encouraging policymakers to think outside the box and allow farmers to rely on ingenuity to grow a valuable product and participate in markets. At state and local levels, the chance to influence free market agricultural policy with smaller, diverse targets presents a greater opportunity to move the needle, or to keep it from moving in the reverse direction. Look forward to our upcoming study of policy recommendations for free market agriculture, encouraging free market policy changes which benefit all farmers and food consumers.

As a small farmer starting from scratch, there comes a point when it is necessary to hire someone to work on your operation. A few years ago, we reached the point where our acreage was beyond what one person could reasonably manage during the growing season. Unfortunately, hiring farm employees is a challenging task. Farmers and ranchers not only face the universal challenge of labor shortages and cost increases, but they also enter the paths of an ever-growing regulatory weed patch filled with many obstacles. Some legislators, bureaucrats, and judges create rules and regulations inside and outside of their expertise, complicating the operations of many farmers and ranchers, and pushing many small operations out of business. Hiring workers in this weedy labyrinth is a strategic nightmare. Agricultural operations must be aware of the many rules and future rules that could impact their businesses. For example: Local and state governments repeatedly push regulations that hurt the agriculture industry. Local city councils have added additional permits to migrant worker housing, complicating an already distorted system for housing much-needed and highly-valued farmworkers. State governments also increase pressure on farm and ranch operations by adopting special interest legislation that hurts farmworkers, like removing the agricultural overtime exemption. Again and again, farmworkers have spoken to legislative authorities to share how much this law hurts their families and their ability to choose their best interests. In an undemocratic display, two Washington state legislators tried to alter the testimony of farmworkers hurt by the new overtime requirements, attempting to fit the testimony into their own personal narrative. Bureaucratic agencies seem to sit poised against farmers and their ability to function. In many matters, state and federal agencies complicate legislative proposals and extend the reach of the law. This is most obvious in water law cases and the EPA. Judges have re-interpreted codified law to align closely with special interest groups, and far from a clear reading of the legislation. Legislating from the bench, the Washington Supreme Court reinterpreted the piece-rate pay laws and overcomplicated the ability for farms to pay workers based on performance. In 2018, the court decided that for agricultural workers, piece rate pay could no longer use the workweek averaging method to guarantee minimum wage. The court later ruled in 2019, that the workweek averaging method can be used for non-agricultural workers. Even if farmers and ranchers could navigate the legislative and bureaucratic portions of their legal responsibilities, it is impossible to predict the future decisions of courts aligned with groups antagonistic to agriculture. The risk of future lawsuits and court-mandated reparations can easily force many farmers out of business, discouraging farmers from entering the industry all together, or encouraging operations to find non-labor means to grow and harvest their crop. For any agricultural resource (labor and otherwise) regulations need to be practical, balancing the true costs and benefits to the farms and communities affected. In our upcoming study, Mountain States Policy Center identified our top ten recommendations to protect and improve a free agricultural market. Our first three recommendations highlight the need to weed out damaging regulations to promote a free market for agriculture: State and local governments should minimize regulatory pressure on the agriculture industry. Bureaucratic agencies need to remove excessive rulemaking from agendas and workloads. Judicial branches must respect codified law and not legislate through rulings. Stay tuned for our upcoming study. The expected release date is early September! Image by gpointstudio on Freepik

A seed is filled with unlocked potential. Add a little soil, sunlight, and water, and within days the seed begins to sprout, filling the pot and then eventually the garden, and if it was a zucchini seed it will overflow your kitchen countertops. But if these inputs are withheld, the seed will eventually wither away. American agriculture is like the seed. Given the right resources of water, land, labor, and technology, the agriculture industry will grow and flourish filling the world’s grocery stores, but even if one of these inputs is withheld, the farming and ranching communities weaken quickly. The United States is home to one of the cheapest, most abundant, and safest food supplies in the world. Until the pandemic, shortages and cost increases were only seen in the briefest and rarest of incidents. Unfortunately, since 2020 the country has seen the consequences of a consolidated food supply system. This is not a scenario worth replaying. Free market agriculture thrives when resources are available for their best and fairest use. Farming and ranching, especially small operations, can succeed when the inputs needed to grow an efficient harvest are available throughout the growing season. These resources include water, land, labor, and technology (to name a few). These are the stories of farmers who have had to learn to farm with limitations on these resources. Water - In the Odessa aquifer region of Washington State, farmers have needed to switch to another water resource for decades. Some farmers are able to buy enough groundwater rights from neighbors, others are resigned to farming lower value, less water consumptive crops and/or letting ground go fallow. Over decades, these farmers have lobbied policymakers to replace groundwater systems with canal-supplied storage water. The project has been slow and arduous, with many promises still unfulfilled. Land – Farmers in Idaho are facing increases in land rental prices as the housing and commercial demand skyrockets regionally. Balancing the need for farmland with property rights is a difficult, but doable proposition. But policymakers must avoid the situation that Oregon farmers face that prevent almost any development on their land. Oregon farmers are only allowed one house per 80-acres, preventing future workers from being easily housed near the farm. These policies disrespect property rights, stagnate growth, and hurt rural communities. Labor – Farmers depending on H-2A (temporary visa) workers are often handling excessive state restrictions, in an already complex and frustrating federal system. Additionally, farmers in states without an agriculture overtime exemption are attempting to find a solution that respects the seasonality of their profession and the best interests of the farm workers choosing to thrive in this seasonality. Technology – A few farmers in Southwestern Oregon have had to farm without Genetically Modified (GMO) crops, dealing with decreased yields and increased pest pressure. Jackson County and Jefferson County voted to ban GMOs in 2014, to favor seed growers, over other farmers that grew GMOs. However, a judge overturned the decision in 2016 for Jefferson County, and the Oregon legislature ensured after the fact that no other county could issue a similar ban, leaving Jackson County as the only Oregon county with an effective ban. For millennia, any person who planted a seed knew there were greater, uncontrollable forces at play that would limit resources. But throughout the course of history, farmers have captured these resources and maximized their availability. Unfortunately, regulatory pressure has created a man-made shortage on many of these resources. Free market agriculture will grow when these man-made limitations are minimized and resources are available for its best use. In our upcoming study, Mountain States Policy Center identified our top ten recommendations to protect and improve a free agricultural market. Our first three recommendations are mentioned here, and recommendations #4 - #7 focus on the ability for free market agriculture to grow when resources are available: 4. Existing agricultural water usage needs to be protected and the development of water storage/resources encouraged. 5. Land development must balance the necessity of property rights with the necessity of land for food production. 6. Agricultural labor needs to be accessible, and laws should respect the seasonal work dynamics of farming. 7. Technology should be made available to farmers without excessive restrictions. Stay tuned for our upcoming study. The expected release date is early September!

As a self-started, small farmer of alfalfa hay for four years, I know firsthand the problems that are caused by overregulation of agriculture. Agricultural labor laws are one of the most cumbersome for our operation to navigate. On our small farm in Eastern Oregon just west of Parma, Idaho, our harvest equipment is repeatedly fine-tuned to maximize our yields every year. When harvesting grain sold to the local feedlot, we adjust the combine’s air volume and sieve gap to maximize the removal of the chaff and minimize the loss of valuable grain. This frustratingly slow process requires repeated starts and stops, maintenance, and repairs until all our equipment is adjusted. Like our harvest equipment, agricultural policy needs to be finetuned to maximize the removal of externalities and to minimize the loss of family farms. Free market agricultural policy seeks to move the legislative needle toward more farm independence and improved food self-reliance. As more farms thrive by relying on ingenuity and grit to move products to markets, families will be better able to meet their needs with affordable and secure food. What do I mean by the free market? In general terms, the free market is best understood as an economic system that allows individual actors to voluntarily engage in the exchange of goods and services with prices determined by supply and demand instead of government restrictions. A key component of a free market is voluntary economic activity instead of government coercion on the exchange of goods or services. What does this mean for agriculture? Agriculture relies on many limited resources, including water, land, minerals/oil, and labor. The limitations of these resources exist naturally and yet man-made limitations, in the form of regulations, add to the difficulty of procuring a sufficient supply of inputs. Regulations tighten the supply of all inputs needed for agriculture. Increasing regulatory burdens on agriculturalists will consolidate domestic farming operations and agricultural businesses, endangering an accessible and affordable food supply. Free market agricultural policy often targets federal policy. Federal positions on farm support payments, immigration policies, international trade, environmental protection, and technology approval are obvious, large targets of free market policy. National research and analysis has addressed these concerns for decades. At state and local levels, the possibility to influence free market agricultural policy with smaller, diverse targets presents a greater opportunity to move the needle, or to keep it from moving in the reverse direction. This is why Mountain States Policy Center encourages policymakers to think outside the box and allow farmers to rely on ingenuity to grow a valuable product and better access markets. Our new study on this topic takes a deep dive into this opportunity and the following recommendations to help improve and protect a free market agriculture climate for farmers of all sizes: State and local governments should minimize regulatory pressure on the agriculture industry. Bureaucratic agencies need to remove excessive rulemaking from agendas and workloads. Judicial branches must respect codified law and not legislate through rulings. Existing agricultural water usage needs to be protected and the development of water storage/resources encouraged. Land development must balance the necessity of property rights with the necessity of land for food production. Agricultural labor needs to be accessible, and laws should respect the seasonal work dynamics of farming. Technology should be made available to farmers without excessive restrictions. Farmers can take the lead in encouraging trade development and research. Taxes should not unfairly favor or punish farmers. Farmers can be responsible for their own risk management and marketing. Free market agriculture doesn’t argue for an unregulated system, but for fewer, smarter regulations. Farms thrive when markets are accessible, achievable through free market agriculture which encourages local oversight and an environment friendly to self-reliance. Resilient farmers and ranchers are achieved with a free market, and we’ll be providing policymakers with recommendations to help sow the crop for a better agricultural climate.

A Montana District Court judge has temporarily blocked parts of a law passed by the state legislature to create a system of public charter schools in Montana. Montana is one of the only states in the nation that, until now, hasn't allowed for the creation of public charter schools, despite overwhelming evidence including research from Stanford University showing their success. The Montana legislature actually passed two charter school bills - HB 562 and HB 549. As we previously reported, HB 562 was the stronger bill. As they have done in nearly every state that has voted to launch public charter schools, teachers union leaders and the League of Women Voters, among others, sued to prevent implementation of HB 562. HB 562 is different from aspects of HB 549 in that it creates a School Choice Commission that can authorize public charter schools. District Court Judge Christopher Abbott's ruling and the union lawsuit claim the new law invades the authority of the Board of Public Education. The ruling also took issue with the fact that public charter schools created under HB 562 would also eventually have their own elected boards, voted upon by staff and families at the school. Our friends at the Frontier Institute had this analysis. While the court issued a temporary hold on parts of the law, there were important victories for supporters of charter schools contained in the ruling. Here are four other important details: Charter schools are not unconstitutional in Montana Judge Abbott's ruling makes it clear that, while he is blocking parts of HB 562, the plaintiffs have not shown that "charter schools or choice schools are themselves likely to be unconstitutional." The issue of student funding vs. school funding The funding argument in this debate is all about whether you believe funding for education belongs to the student or belongs to the school. Union activists contend money spent on public charter schools diverts money from traditional public schools. But this assumes the money belongs to the school no matter how many students attend. In reality, the money belongs to the student. The state rightfully maintains that "no improper diversion occurs because choice schools are public entities and part of the public school system." The court confirmed the state is "likely correct." Still, activists continue to repeat the claim that funds will be "diverted." Public schools ... or not? The court's ruling makes it clear, once and for all, that public charter schools are public schools. In fact, the activists who are suing are, in part, relying on that to be true, while at the same time claiming the schools are not public. (In order for the state Board of Public Education's power to be usurped, the school would need to be public and under its control.) In reality, public charter schools are open to all students and free of charge. As Judge Abbott wrote, "the Framers likely understood a public school simply to be a publicly funded primary or secondary school generally open and free to all children of a district." Suing on HB 562 - not HB 549 If union activists believed HB 549 was a threat, they would have also sued to prevent implementation. The bottom line is that HB 549 didn't allow for nearly as much flexibility and room for innovation. It would allow the state Board of Public Education to approve charter schools, so long as they meet 30 different requirements in their application. It's also worth noting that while HB 562 called for the schools to be overseen by a board elected by students and staff of the school, HB 549 calls for local elections in the school district where the charter is located. This would make it easier for activists to gain seats and, for better or worse, control the future of public charter schools in Montana. What's next? Judge Abbott says the school choice commission may continue its work, but cannot approve schools while the case is under review.

The foundations for an accountable government can be found in strong citizen oversight, and one of the most critical tools for this goal is open government laws. Requirements for access to public records, open meetings, public comment periods, and legislative transparency are critical tools necessary for citizens to maintain control over the government they have created. There are several resources currently available in Idaho to help citizens participate in their governance. They include open meetings and public records laws as well as Transparent Idaho (a government transparency website run by the Controller’s Office). To help discuss these open government resources in more detail, Idahoans for Openness in Government (IDOG) is teaming up with the Idaho State Controller and Idaho Secretary of State on a series of transparency workshops (both in-person and streaming options available): “WED. Aug. 30, 10 a.m. MT: TRANSPARENT IDAHO/TOWNHALL IDAHO - How to access public data, meeting info online for free. With: BRANDON WOOLF, Idaho State Controller (video archive) WED. Sept. 27, 10 a.m. MT: CAMPAIGN FINANCE & LOBBYING The rules and how to access data. With: PHIL MCGRANE, Idaho Secretary of State WED. Oct. 25, 10 a.m. MT: IDAHO OPEN MEETING LAW. With: BRIAN KANE, former Chief Deputy Idaho Attorney General and BETSY RUSSELL, IDOG president TUES. Nov. 28, 10 a.m. MT: IDAHO PUBLIC RECORDS ACT The law and the public’s rights. With: BRIAN KANE and BETSY RUSSELL” You can sign up for the IDOG transparency workshops here. As noted by the Idaho Public Records Law Manual: “Open government is the cornerstone of a free society. The Idaho Legislature affirmed Idaho’s commitment to open government by enacting the Idaho public records law in 1990. The public records law protects each citizen’s right to monitor the actions of state and local government entities by providing access to government records.” The Idaho Open Meeting Law Manual continues: “Open and honest government is fundamental to a free society. The Idaho Legislature formalized our state’s commitment to open government by enacting the Idaho Open Meeting Law in 1974. The Open Meeting Law codifies a simple, but fundamental, Idaho value: The public’s business ought to be done in public.” Mountain States Policy Center is a strong supporter and advocate for robust open government laws and transparency resources. One area that we’d like to see an improvement in for Idaho is a change to legislative rules that would require at least a 72-hour waiting period before action or hearings on bills can occur. More to come on this in the near future.

Mountain States Policy Center (MSPC) – the region’s top source for free market policy and analysis – announced today the newest recipient of its Elevation Award, former Idaho Governor Butch Otter. The Elevation Award is the highest honor of Mountain States Policy Center, given to those committed to advancing and elevating free market principles and ideas. Governor Otter will be honored at the Mountain States Policy Center Fall Dinner at the Boise Centre on October 6th. “I’ve always believed that good policy is good politics,” said Otter. “I am humbled to receive this honor.” Otter, 81, has a long history of public service, including serving four terms as Idaho’s lieutenant governor – longer than anyone in Idaho history. He previously represented the people of Canyon County in the Idaho House of Representatives for two terms, and also served three terms in Congress representing Idaho’s 1st District. From 2007-2019, Otter served as Idaho’s 32nd chief executive. “Whether he was in Congress or the state house, Butch Otter was committed to putting free markets first,” said Chris Cargill, President of MSPC. As a Congressman, Otter supported a balanced budget amendment. In both DC and Boise, he advocated for broad-based tax cuts and a reduction in the size and scope of government. “Governor Otter also demanded strong education accountability measures,” explained Cargill. Previous recipients of the Elevation Award include Idaho Controller Brandon Woolf, Montana Secretary of State Christi Jacobsen and Eastern Washington Congresswoman Cathy McMorris Rodgers. The Elevation Award will be presented to Governor Otter at MSPC’s Fall Dinner at the Boise Centre on October 6th. Former HUD Secretary Dr. Ben Carson and Wall Street Journal Columnist Kim Strassel will be keynote speakers. The event is open to the media, but members of the press are asked to RSVP to info@mountainstatespolicy.org.

President Joe Biden's 2023 Labor Day proclamation is heavy on praise for unions. But as we mark this end-of-summer holiday, the attention should be on workers. Data now shows only 6% of workers belong to a union. Most of these unions are government or public sector unions, such as teachers. And there's a big difference between a private trade union and a public sector union. These public employee unions negotiate for pay and benefits against a seemingly endless source of cash - tax revenue. Public sector union negotiations pit neighbor against neighbor. And that is precisely the problem, as President Franklin Roosevelt wrote: "All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management." In fact, right now in Washington State, some teachers are striking against the taxpayers and children they are supposed to serve. This is a clear violation of Washington State law. Washington's courts have consistently ruled: “As public employees, the defendants have no protected right to strike under Washington law, and are currently engaged in an illegal strike against the District.” As a right to work state, Idaho law says you cannot be required to be part of a union in order to hold a job. This should be the reality in every state. No one should be forced to be part of any private organization in order to work. Union membership is tracked closely, state by state, by the Bureau of Labor Statistics. Idaho 5.9% Montana 12.3% Wyoming 7.3% Washington 19.1% We should respect the right of every worker to choose what is best for themselves, whether that be joining a private organization such as a union or exercising the freedom not to. So as we mark Labor Day, let us remember that most Americans contribute to the fabric of our society by working, but that doesn't mean they are or want to be part of a union.

More than 60% of land in Idaho is controlled by the federal government - meaning a loss of tax revenues for local government. How much would it be worth to taxpayers if it were privately controlled? It has always been a question, and now we might have an answer. Earlier this year, we detailed the process of PILT payments - one of the ways the federal government attempts to mitigate potential losses in revenues that states with large amounts of federal land such as Idaho may experience is by compensating them with Payments in Lieu of Taxes, or “PILT.” Since federal land is owned by the government and cannot be taxed, PILTs are a way that the federal government attempts to aid citizens living near federal land by giving each county a payment which is calculated based on the number of acres owned by the federal government and the county’s population. Last year, the Idaho Legislature contracted with an Utah company to do an analysis of Idaho's PILT payments and federally-controlled land. The results were staggering, as Logan Finney with Idaho Reports recently showed: "According to the report, the federal government is paying out about eight or nine times less than it should be. The report calculates that for a 145-acre parcel of U.S. Forest Service land on the western city limit of Elk River, Clearwater County receives a $153.39 PILT payment but would receive $1,321 in property taxes from a private owner. The report shows Canyon County received a current PILT payment of $350.71 for a 120-acre parcel south of Nampa, which AEON AI estimates would bear $10,158 in property taxes in its current state. If the parcel was fully “built out” for development, the company projects up to $256,519 in property taxes. Boundary County gets a current PILT payment of $20.03 for the site of the Bonners Ferry Ranger District. A private owner would pay $365.10 in property taxes on the land, AEON AI projects, and redeveloping the property as low density residential would yield up to $30,963 in property taxes. That number does not account for the cost of the potential owner redeveloping the property."

As a new school year begins, don't forget to check the back to school list. Also, get to know your child's teachers and slow down in school zones. And finally, remember, "education is underfunded!" This is the mantra that never ends. It just goes on and on, my friends. No matter how much is spent on public education, taxpayers are told it is not enough. On the state level, it is a game. If state A raises its education spending above state B, citizens in state B are told they are underfunding education. Once state B raises its funding again, citizens in state A are accused of underfunding. And on and on we go. But what does it mean to say "education is underfunded"? How much should we be spending? Most of the time, there is no answer other than "more." A Montana state senator recently wrote an op-ed with the "underfunding" refrain in the headline. The Superintendent of Public Instruction in Washington State says his state is underfunding. Wyoming teachers union leaders recently sued, saying their state was underfunding. It's natural to get concerned when seeing these headlines. But a review of the facts shows most states have a ton cash going to public education - much more than many parents and taxpayers realize. After all, why does Mrs. Johnson have to buy her own school supplies if the school district has plenty of money? Over the past decade, both Idaho and Washington have doubled the amount the state spends on K-12 public education. In New York, Washington, D.C., Vermont, Alaska and several other states, the average spent per student exceeds $20,000 per year. Utah spends the least on education, and yet gets some of the best results. Nation wide, the Education Data Initiative says we're spending an average of $13,701 per student, per year. The U.S. Census Bureau says the number is $14,347 per student For a classroom of 25 students, that is $358,675. Is that underfunding? You can decide. According to the Organization for Economic Cooperation and Development’s (OECD), the United States continues to spend one of the highest amounts, per student, of any country in the world. Yet the average student in countries including Singapore, Canada, China, Estonia, Germany, Finland, Netherland, and New Zealand continually rank years ahead - nearly 4 years advanced in math, 1.5 years in reading and 2.5 years in science. Anyone or any group that claims that education is being underfunded has a responsibility to give us a number to work with. When will we know that we are fully funded? The likelihood is the response will be "there is no magic number." And that's true. Because the facts show us spending is not what is most important.

As gas prices surge, more drivers are looking at the electric vehicle market. Sometimes that makes economic sense, but depending on the vehicle, going electric doesn't necessarily pay for itself. One thing electric vehicle owners haven't had to worry about is paying for gas taxes. As we've shown, gas taxes can make up anywhere from 30 cents per gallon to as high as nearly 80 cents per gallon. And that doesn't account for other carbon taxes and low carbon fuel standards that states like Washington have adopted. In our 2022 Idaho Poll, Idahoans were split on implementing a mileage tax in the Gem State. States and the federal government typically use gas taxes to pay for roads, bridges, highways and other transportation needs. But what happens when more Americans switch over to electric vehicles - who will pay then? Not to worry, government always seems to have a taxing solution. Transportation activists are telling the federal and state governments to adopt vehicle miles traveled (VMT) or, put simply, mileage taxes. In other words, you would be charged a certain amount for every mile that you drive. Some state proposals have the mileage tax at nearly three cents per mile. For the average person driving a vehicle 12,000 miles per year, that totals nearly $360. In addition to the cost, there are many unanswered questions regarding a mileage tax, including: Would drivers be charged both gas taxes and mileage taxes? Would mileage taxes be required to be used on transportation projects? How would the government track a driver's mileage? How does the government avoid privacy concerns? Do mileage taxes unfairly punish those in rural communities? In some state pilot programs, drivers have had the option of placing GPS devices in their vehicles to track mileage, but at least one participant also had her driving infractions recorded. But without a GPS or other form of tracking device to determine where you are driving, mileage reporting becomes a paperwork issue. If you live in a border community or take a long summer roadtrip, you could end up paying a tax to one state while driving on another state's roads. Generally speaking, user fees are a solid and fair approach to transportation funding. However, a state or national mileage tax just has too many unanswered questions to be ready for implementation.

I have embraced a "Full-Speed Ahead" mindset throughout my life, eagerly welcoming growth and experiences. Marrying young, my wife and I explored the world, have had a baby, and continue on this rapid journey. While we're not alone in having a goal to experience as many of life's richness, it's remarkable to me that a year ago, we couldn't have foreseen AI emerging as the true catalyst for exponential development and transformation, exerting its influence at an astonishing pace in our lives and the world around us. The rapid ascent of AI, spearheaded by ChatGPT and similar technologies, has been nothing short of sudden and spectacular. In just a year, AI-driven language models have evolved from experimental curiosities to transformative tools reshaping industries worldwide. ChatGPT, in particular, showcases the capacity for machines to comprehend and generate human-like text, making it invaluable in diverse applications such as customer service, content creation, and even assisting in complex decision-making. Now let's get the details on the who, when, and why. Who is the Oz behind the curtain? Sam Altman is a prominent entrepreneur, investor, and technologist. Sam Altman started his career early as a software developer and entrepreneur. He co-founded the location-based social networking company Loopt while he was still a student at Stanford University. Loopt aimed to provide users with real-time information about their friends' locations, and it gained attention as one of the pioneers in location-based services. In 2020, Altman became the CEO of OpenAI, an artificial intelligence research organization with a focus on ensuring AI benefits all of humanity. Under his leadership, OpenAI continued to make advancements in AI technology, including the development of models like GPT-3 and now GPT-4, which gained significant attention for its capabilities in natural language understanding and generation. When did it really emerge? ChatGPT came to be in June 2020 when OpenAI released its research preview as a demonstration of its language model capabilities. ChatGPT was developed by OpenAI, an artificial intelligence research organization based in San Francisco, California. OpenAI is governed by its board of directors and has various stakeholders, but it is not owned by any individual or entity in the traditional sense. It operates as a research organization with the mission of advancing artificial intelligence in a safe and beneficial manner for humanity. The organization's leadership and direction are guided by its board and the principles set forth in its charter attached HERE. Their charter specifically details broadly distributed benefits, long-term safety, technical leadership, and cooperative orientation. In summary, OpenAI's core principles revolve around creating AGI benefits all of humanity while avoiding harm and power concentration. They prioritize safety research and pledge to assist, rather than compete, with value-aligned projects nearing AGI development. Technical leadership and cooperation with research institutions are key, and they anticipate a shift from publishing AI research to sharing safety, policy, and standards research as AGI advancements continue. How is it being used currently? AI and ChatGPT are being implemented across a wide range of industries to streamline processes, enhance customer experiences, and improve decision-making. Here are some industries and examples of how they are using AI and ChatGPT, and trust me, this isn't all there is. Customer Support: Many companies are using AI-powered chatbots and virtual assistants, often based on models like ChatGPT, to provide quick and efficient customer support. These chatbots can answer common queries, guide users through troubleshooting, and provide 24/7 assistance. Healthcare: AI is used to analyze medical data, assist in diagnosing diseases, and predict patient outcomes. ChatGPT can be utilized to provide patients with information about symptoms, general health advice, or appointment scheduling. E-commerce: E-commerce platforms use AI to personalize product recommendations, improve search functionality, and assist customers in finding products that match their preferences. Finance: AI helps with fraud detection, algorithmic trading, risk assessment, and customer service in the finance sector. ChatGPT can provide explanations of financial terms, help with basic financial planning, and answer inquiries about account balances. Education: AI-powered educational platforms use ChatGPT to answer student questions, provide explanations for complex topics, and offer interactive learning experiences. Software Development: Developers use AI to assist in writing code, debugging, and suggesting optimizations. ChatGPT can help programmers find solutions to coding challenges and provide explanations of programming concepts. Human Resources: AI tools can streamline recruitment processes by screening resumes, conducting initial interviews, and answering candidate questions. ChatGPT can assist in onboarding by answering employee queries and providing information about company policies. Where do you go from here? Quite simply, AI is advancing at an incredibly fast rate, and it is here to stay. I personally experienced it for the first time during my Senior year in University, and it has advanced lightyears ahead of where it was. Whether as an educator or business-owner, a parent or influencer, knowledge is always the ultimate source of power and understanding. We need to learn to use these resources as what they are meant to be; tools for success. In the coming months, I'll be tracking more AI issues and explaining how we can use its power to improve government efficiency and advance free markets. In case you don't know where to begin in the research and understanding of AI, I've attached a few helpful and informative links below. Good Luck and Godspeed. ADDITIONAL INFORMATION: Creating safe AI that benefits all humanity What is chat GPT? What is chat GPT and why does it matter? Chat GPT for dummies - an explainer on what it is all about Everything you need to know about chat GPT

The Cheyenne, Wyoming city council is considering joining a popular, but ineffective environmental fad. Lawmakers are proposing banning single-use plastic bags. The proposal would make exceptions for "laundry cleaning bags, restaurant and food establishment bags or plastic containers." Not only would plastic bags be banned at grocery stores, customers would also have to pay a new "environmental service fee" of 10 cents per paper grocery bag. The question is whether banning plastic bags makes sense and can help the environment? The answer is likely no. In fact, much of the research shows plastic bags can actually be one of the most environmentally friendly options. There are numerous reasons for this. First, plastic bags are reusable. Think about how many times you’ve reused a plastic bag to take a lunch to work, to clean up after your dog, or to fill a trash container in your bathroom. Without those bags available, consumers look for alternatives and end up buying more plastic bags. The school of Forestry and Natural Resources at the University of Georgia released a study concluding: "The study found California communities with bag policies saw sales of 4-gallon trash bags increase by 55% to 75%, and sales of 8-gallon trash bags increase 87% to 110%. These results echo earlier studies that also showed increases in sales of smaller plastic trash bags." Second, the plastic bag alternatives are not much better. The United Kingdom’s Environment Agency released a report in 2011 that highlighted the carbon impact of paper, reusable plastic, and cotton bags is higher than single-use plastic bags. In fact, scientists said you’d need to reuse a cotton bag more than 130 times to have an impact on the environment. Danish researchers had similar findings. Environmental policy expert Todd Myers wrote this for RealClearScience: "One of the most commonly heard claims is that plastic bags, and other plastic, have created the “Pacific Garbage Patch.” Some claim it is twice the size of Texas. This is simply false. Last year, Oregon State University reported that the actual amount is less than one percent the size of Texas. Oceanography professor Angel White sent out a release last year saying, “There is no doubt that the amount of plastic in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists.” Third, there are sanitation concerns. Most people who carry around reusable, cloth bags do not necessarily take care to make sure the bag is clean. Some may keep the bag in their backseat or the trunk of their vehicle. Others might only wash the bag once a month. The concern about sanitation was especially high during the COVID-19 pandemic, when a number of states that had adopted bans decided to hold off because of hygiene concerns. So, while plastic bag bans may make policymakers feel good, the research shows they are a very ineffective way to protect the environment, and can actually do more harm than good.

Americans are feeling a pain at the pump. But who is to blame for the higher prices? Government taxes and fees can make up a significant portion of the overall burden. The federal government charges slightly more than 18-cents per gallon in gas tax. State taxes are added on to that cost. The Tax Foundation recently updated the list of states with the highest gas taxes. The Mountain States generally fall in the middle of the pack. In Idaho, for example, drivers pay a total of 33-cents per gallon. In Montana, it's nearly 34-cents per gallon. In Washington State, however, the burden approaches 50-cents per gallon. And that does not include the cost of the recently-implemented low carbon fuel standard and carbon tax. Media outlets across Eastern Washington, in particular, are pointing to the large disparity in Idaho and Washington gas prices. Drivers can save as much as 75-90 cents per gallon by filling-up in Idaho. The U.S. Department of Transportation says gas taxes make up about 19% of the overall cost of a gallon – but this will vary depending on the state and the current price. For example, if the gas price is high, the gas tax percentage will be lower. Likewise, if the gas price is low, the gas tax percentage could be much higher. In most states, gas taxes are mostly used to fund roads, bridges and a state’s transportation system. And, so long as the money is being used wisely, most drivers are okay with that. However, when policymakers adopt gas tax hikes, there is no accountability built into the system. The cost is hidden in the price. This is unusual when purchasing almost any product. After all, the price of a loaf of bread at the grocery store does not have the sales tax built in. Neither does the purchase of a bottle of water. Most consumers can see the tax burden they face on their receipt. If they don’t like it or don’t think it’s being used properly, they can talk to their elected officials. But with gas taxes, consumers are left in the dark. The fix to this lack of transparency is what has been called “truth-in-labeling.” In 2017, Washington state passed a law requiring the Washington state Department of Agriculture to produce a sticker that would be placed on every gas pump near the weights and measures certification. The sticker would simply inform drivers of their state and federal tax burden. In Washington, the WSDA conducts periodic inspections of gas pumps, so it made sense to assign the transparency task to that agency. Overall, drivers responded positively to the stickers. The cost for taxpayers was minimal – simply the price of the stickers – as state workers already travel around the state to pumps for weights and measure tests. In Ohio, state workers began placing the stickers on gas pumps in 2019, as part of a deal to increase the gas tax. In Utah, gas tax stickers are being placed at stations beginning this year. This simple, transparent idea should be considered in Idaho and across the Mountain States. Since government taxes and fees make up such a large portion of the overall cost of a gallon of gas, a “truth-in-labeling” policy is a reform worth pursuing.

We are reviewing the fiscal process in the Mountain States to provide a resource comparing Idaho, Montana, Washington, and Wyoming. To help with this project, MSPC reached out to the budget office for each state. Here is my interview with Ryan Evans, Assistant Budget Director for the Office of Budget and Program Planning (OBPP), on Montana’s fiscal process. The questions we posed are in italics. Spending/tax limits – Does the state have a constitutional or statutory spending and/or tax limitation (i.e. supermajority requirement to raise taxes)? Mr. Evans: “Montana does not have a tax or spending limit. To issue debt, however, requires a 2/3 vote of the legislature, and accessing funds in trust requires a 3/4 vote under the state constitution. Raising taxes requires only a simple majority vote.” Balanced budget requirements – Does the state have a constitutional or statutory balanced budget requirement? Mr. Evans: “Article 8 of the state constitution (Revenue and Finance) requires Montana to have a balanced budget. Deficit spending is prohibited.” Restricted/protected reserves – Does the state have a constitutional or statutory requirement for restricted/protected reserves? If yes, is a certain percentage of revenues required to be automatically allocated to reserves? Mr. Evans: “It requires a 3/4 vote of the legislature under the constitution to access trust funds. Though not constitutionally restricted, Montana also has statutory requirements for the state’s Budget Stabilization Reserve (BSR) that is capped at 16% of the second year of appropriations (Montana budgets on a biennial basis). The BSR is currently near its statutory cap of approximately $500 million. Ongoing revenue contributions into the BSR come from annual general fund reversions in excess of 0.5%. There is also a formal fire suppression reserve account with a statutory cap and refill requirement equal to 6%. That account currently has a balance of around $200 million. Another formal statutory reserve is the capital development fund tied to revenue collections (set with a 12-year compound annual growth formula).” Non-partisan revenue forecast – Does the state have a non-partisan revenue forecast process? If not, how are revenue forecasts handled? Mr. Evans: “There is a combined legislative/executive process to develop Montana’s revenue forecast. There is a formal legislative committee process that the governor’s professional non-partisan fiscal staff is part of. Non-partisan legislative staff also does its own estimates. Before the biennial legislative session begins (Montana’s legislature meets every other year) the legislative revenue interim committee reviews recommendations from nonpartisan legislative and executive fiscal staff and adopts a biennial revenue forecast. That interim committee’s membership has an equal number of Republicans and Democrats. Monthly revenue collection reports are also monitored separately by legislative and executive fiscal staff.” Budget outlook – Does the state have a standing budget outlook process? If yes, how long of a time horizon does it cover? Mr. Evans: “There are three budget outlook processes that work together. The first is a formal process that looks at a three-year budget and revenue window when building the biennial budget. There is also a five-year budget outlook process conducted by the governor’s office. The legislature also recently created a permanent statutory committee that projects economic indicators over a 20-year window.” Line-item veto/discretionary spending reduction authority – Does the Governor have line-item veto authority and/or the authority to reduce agency spending if a deficit occurs? Mr. Evans: “The governor is authorized to reduce up to 4% of an agency’s appropriations during a deficit. For every dollar of agency spending the governor reduces, up to three dollars can be accessed from the Budget Stabilization Reserve. The governor has line-item veto authority for appropriations only. Policy bills have to be vetoed in their entirety (no sectional veto).” Tax structure – What are the main tax sources (and rates) for general fund spending? Mr. Evans: “The primary tax sources for Montana are personal (graduated) and corporate income taxes, a statewide property tax dedicated to funding local schools, and vehicle fees and licensing. Montana does not have a statewide sales tax.” Audits – Does the state have an independent process for fiscal, compliance, and performance audits of state spending? What entity is responsible for the state’s federal single audit and ACFR? Mr. Evans: “The state’s federal single audit is overseen by a federal audit coordinator in the governor’s budget office. The state administrative accounting audit office conducts the ACFR. Montana doesn’t have an elected state treasurer or auditor. The legislative audit division handles all fiscal, compliance, and performance audits for independent accountability with all reports provided to lawmakers.” Performance-based budgeting – Does the state place high-level performance outcomes directly into the budget? Mr. Evans: “Performance-based budgeting isn’t formally used in Montana. There are a few triggered appropriations that are tied to certain outcomes but there is not a standard process for using performance-based budgeting. That said, agencies are statutorily required to provide goals and objectives that are used as part of the budget-building process to help inform spending decisions. The governor also holds monthly meetings with agency directors to review performance objectives.” Credit ratings – What are the current credit ratings for the state? Mr. Evans: “Montana is currently rated AA+ by Fitch and Moody’s and AA by Standard and Poor’s. All the ratings show a stable outlook.” Thank you, Mr. Evans, for your time answering these questions and your service to Montana. Additional Information Idaho’s fiscal process – An interview with the Division of Financial Management

The Joint Education Committee of the Wyoming legislature met this week to consider a series of proposals aimed at improving education outcomes. One of the ideas as a familiar one - Education Savings Accounts (ESA's). The bill creates $3,000 per year ESA's for families who make less than 250% of the federal poverty level. The money could be used to support education services such as tutoring, private school tuition, textbooks or help to improve outcomes outside the classroom. Compared to previous proposals and laws in other states, the Wyoming plan is a modest step forward. But it's important to point out that Education Savings Accounts are not "vouchers." It's inaccurate and misleading to interchange the terms. Unfortunately, a recent news article repeatedly did just that. Polling shows vouchers do not have the same amount of support as ESA's. The word "voucher" has a negative connotation, which explains why so many opponents keep saying "vouchers" or "ESA vouchers." The problem is there's no such thing as an "ESA voucher" - in fact, ESA's are very different from vouchers. Even many lawmakers don't understand the difference. For the sake of accuracy and public understanding, lawmakers and the media must use proper terms. A voucher program would let parents use taxpayer dollars to pay for tuition at a private school approved by the state. Typically, the state writes a check to a school in the name of a student to cover tuition. An Education Savings Account is much different. First, money is held in an account by the state - it is not given directly to schools. Second, an ESA allows parents to use a portion of state funding on a variety of education services. Yes, it can include private school tuition, but it can also include tutoring, special needs services, curriculum, mental health treatment and much more - so long as it is for an educational purpose. In the end, ESA's are given directly to parents via a state fund, whereas vouchers are given to schools or a specific institution. Wyoming lawmakers are also being told the proposal may violate the state constitution's Blaine Amendment, which says "no money of the state shall ever be given or appropriated to any sectarian or religious society or institution." However, two recent U.S. Supreme Court cases have curtailed Blaine Amendment restrictions: Espinoza v. Montana Department of Revenue (2020) and Carson v. Makin (2022). The Espinoza decision held that government attempts to exclude religious schools from public scholarship or tax credits are subject to strict scrutiny, meaning lawmakers must prove they have a “compelling interest” in restricting the free exercise of religion of scholarship or tax credit recipients. The Carson majority held that “a neutral benefit program in which public funds flow to religious organizations through the independent choices of private benefit recipients does not offend the Establishment Clause." In other words, states cannot fall back on their Blaine Amendments to justify prohibitions on public funding of schools solely due to their religion. In addition, a state cannot discriminate against religious beneficiaries of public scholarships or tax credits by forbidding them from using those benefits at religious schools. As the Institute for Justice writes, “these obstacles to educational freedom are now largely a dead letter.”

We are currently reviewing the fiscal process in the Mountain States to provide a resource comparing Idaho, Montana, Washington, and Wyoming. To help with this project, MSPC reached out to the budget office for each state. Here is my interview with Alex Adams, Administrator for Idaho’s Division of Financial Management (DFM), on Idaho’s fiscal process. The questions we posed are in italics. Spending/tax limits – Does the state have a constitutional or statutory spending and/or tax limitation (i.e., supermajority requirement to raise taxes)? Mr. Adams: “Spending is constrained by the state’s constitutional balanced budget requirement, and Idaho consistently ranks among the most conservative states in terms of spending per capita. Governor Little has upheld this track record while providing Idahoans and local communities with historic investments in critical infrastructure, further promoting a strong state economy into the future.” Balanced budget requirements – Does the state have a constitutional or statutory balanced budget requirement? Mr. Adams: “Yes, a balanced budget is enshrined in Article VII of the constitution, and the state also strives to avoid gimmicks and ensure structural balance where ongoing expenses are kept in line with forecasted ongoing revenue.” Restricted/protected reserves – Does the state have a constitutional or statutory requirement for restricted/protected reserves? If yes, is a certain percentage of revenues required to be automatically allocated to reserves? Mr. Adams: “Idaho Code has automatic transfers to reserve funds if certain revenue targets are met. There are caps on the total amount allowed in some reserve funds. Idaho is currently projecting $1.2 billion in reserve funds, which equates to about 21% of the state’s general fund revenue. This percentage aligns with a national stress test of how much the state should have in reserve to weather the next recession, protecting Idahoans and our state economy.” Non-partisan revenue forecast – Does the state have a non-partisan revenue forecast process? If not, how are revenue forecasts handled? Mr. Adams: “Forecasting originates with the economic analysis bureau at DFM. The DFM forecast is presented annually to the bipartisan Economic Outlook and Revenue Assessment Committee (EORAC). EORAC also receives economic information from academic and industry partners before making a final recommendation on revenue targets to the budget committee.” Budget outlook – Does the state have a standing budget outlook process? If yes, how long of a time horizon does it cover? Mr. Adams: “DFM’s revenue forecasting covers a 5-year period, which helps to ensure the budget will remain balanced over time and continues the state’s strong economic trajectory.” Line-item veto/discretionary spending reduction authority – Does the governor have line-item veto authority and/or the authority to reduce agency spending if a deficit occurs? Mr. Adams: “Yes. In upgrading Idaho to a AAA status, Fitch noted the state’s willingness to make spending cuts when necessary to make mid-year adjustments that benefit the long-term fiscal strength of our state.” Tax structure – What are the main tax sources (and rates) for general fund spending? Mr. Adams: “Idaho’s general fund primarily comes from income and sales tax. Under Governor Little, Idaho adopted a flat income tax rate of 5.8%, which will save taxpayers at least $160 million annually.” Audits – Does the state have an independent process for fiscal, compliance, and performance audits of state spending? What entity is responsible for the state’s federal single audit and ACFR? Mr. Adams: “Yes – Legislative Services Office audit division conducts audits and follow-up reports. The State Controller also operates the outstanding Transparent Idaho website, which tracks all state spending and has targeted reports.” Performance-based budgeting – Does the state place high-level performance outcomes directly into the budget? Mr. Adams: “Yes – every agency must submit a Performance Measurement Report with their budget. Performance measures tie to each agency’s strategic plan, and budget requests tie to both documents.” Credit ratings – What are the current credit ratings for the state? Mr. Adams: “Idaho was recently upgraded to AAA status by both Moody’s and Fitch, the first time the state has achieved this status. This upgrade under Governor Little’s leadership signifies the strength of our economy and ultimately saves taxpayer dollars.” Thank you, Mr. Adams, for your time answering these questions and your service to Idaho.