Idaho is dealing with a potential shortfall in its budget because it is faced with the possibility of having to pony up $14.5 million in payments to CenturyLink (NYSE: CTL) and Education Networks of America for operating a statewide network for the state's high schools, according to The Spokesman Review.
The state has funded what is called the Idaho Education Network through a mix of state and federal funds.
These funds came from three sources: a $3 million federal grant it won in 2010, two $3 million grants from Albertson Foundation in 2011 and 2012, and about $3 million in state funds it got in 2013 and this year.
While lawmakers say they should not shut down the network, they are unsurprisingly not happy that they weren't informed of the problem before.
State Sen. Dean Cameron, R-Rupert, co-chairman of the Joint Finance-Appropriations Committee, said that the "$14.5 million budget hole could jeopardize other budget priorities, including a $3.5 million planned expansion of the broadband network to Idaho elementary and middle schools next year."
One of the problems is E-Rate funds that would cover 75 percent of the network's costs the state was slated to get from the FCC has not arrived. Idaho is covering the remaining 25 percent of the costs.
State Department of Administration Director Teresa Luna said that one reason the state has not received the E-Rate funds is because of a lawsuit that local service provider Syringa Networks filed over the original contract award for the statewide network.
In 2009, the service provider sued the state, arguing that then-Administration Director Mike Gwartney prevented it from getting $60 million in business when he awarded the contract to CenturyLink and partner Education Networks.
The FCC confirmed in The Spokesman-Review report that the funds were being withheld due to last spring's Idaho Supreme Court decision in the Syringa case and its ongoing investigation into whether the contract award met federal procurement rules.
- The Spokesman Review has this article
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