BOISE, Idaho -- Gov. C.L. Butch Otter outlined $60 million in income tax cuts, a pay raise for state workers and teachers and a plan to equip students with laptops in his annual State of the State speech on Monday.

Prepared remarks released ahead Otter's address to open the 2012 Legislature highlighted how the two-term Republican has more faith in cutting government than he does in new programs. For example, his income tax cuts dwarf his separate $5 million initiative to create technology jobs and spur university research.

Otter outlined a $41 million, 3 percent pay bonus for state workers and teachers -- but only if tax revenues stay on track. And he recommended $32 million to buy laptops for students and pay merit bonuses to teachers, part of last year's disputed education reforms.

But Otter's speech in the House of Representatives chambers showed his small-government stripes, notwithstanding a failed 2009 push to raise Idaho's gas tax. While predecessor Gov. Dirk Kempthorne pitched $2 billion in new highways and millions more for state parks expansion, that's not this governor's style.

There remains a wide diversity of opinion on how best to target tax relief, Otter said. But there's also broad consensus on the need to reduce the burden both on our hard-working taxpayers and on those employers who are looking for opportunities to grow our economy while creating careers and livelihoods.

Otter's budget would spend about $2.65 billion in fiscal year 2013, 4 percent more than the current year when the state is expected to wind up with a roughly $100 million banked next June.

Lawmakers have until about April to debate all of Otter's proposals before they adjourn.

If he gets his way, however, Otter would dedicate $45 million toward reducing the state's top individual income tax rate to 7.6 percent, from 7.8 percent. He'd boost by $10 the annual credit Idaho residents get to offset their taxes on grocery purchases, costing Idaho another $15 million.

By contrast, Otter's new jobs initiative, the Idaho Global Entrepreneurial Mission, or IGEM, would get only $5 million.

Long a dream of advocates of Idaho's technology industry, IGEM is modeled after a public-private program in Utah that aims to spur startup companies, lure top researchers and speed commercialization of ideas developed at universities. But Idaho's program, at least in funding, will pale in comparison to the Utah Science Technology and Research Initiative, the recipient of some $240 million in taxpayer funds and bond-sale revenue since 2006.

We're not reinventing the wheel here, Otter said. We're just perfecting it for our universities, our communities, and more of our Idaho businesses.

Elsewhere in his budget, Otter recommends restocking dwindling rainy-day reserves to $60 million, after they were drained to nearly nothing from about $384 million four years ago.

He also directs about $12 million in funding to four-year universities, not including IGEM funding to schools. That's makes up just a slice of the nearly $80 million in cuts to schools in Boise, Moscow, Pocatello and Lewiston since 2009 that reduced state higher-education spending to its lowest level in a decade.

And while Otter has laid the groundwork for Idaho to spend about $20.3 million in federal aid to set up an insurance exchange required by Congress' health care overhaul, he left that out of his budget.

He knows he can't count on cooperation from the Legislature, where battle lines have been drawn between conservatives opposed to what they dismiss as Obamacare and more pragmatic voices who say Idaho shouldn't shun available resources just because it's one of the states suing in U.S. District Court over the 2010 federal law.

I look forward to hearing from you, and the people we serve, about our state role in ensuring that environment makes health care more accessible and affordable for all Idahoans, Otter told lawmakers, adding he's anxiously awaiting the U.S. Supreme Court's decision on the constitutionality of the law before July.

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