Job creation, the prospect of a state health insurance exchange, and, of course, the budget.

Those are some of the things on the minds of local state senators and representatives as the Idaho Legislature prepares to convene Monday in Boise.

The question of whether Idaho should create a state-run health insurance exchange - a component of the federal Patient Protection and Affordable Care Act signed into law by President Barack Obama last year - will likely be one of this session's heavily debated issues.

"The governor is supportive of it. At this point, I'm not, but I'll listen to the debate," said Rep. Bob Nonini, R-Coeur d'Alene.

Lawmakers will deal with some education items this session, Nonini said, including "housekeeping" items left over from the 2011 session which saw a sweeping overhaul of the state's process for funding public kindergarten- through-12th grade education.

Items pertaining to the state's new requirement that all high school students receive two credits through online learning will also be considered.

"We'll be making sure they have the equipment they need, and that the rollout goes smoothly," Nonini said.

A long-range plan for the Idaho Education Network, the state's new high-speed broadband network that now connects every school district in Idaho, will also be worked on.

Nonini said budget-setters in the Legislature will likely have some funds leftover this year, and there will be debate about where those dollars should go, whether they should be used to fill holes, restore cuts or replenish rainy day accounts.

If there is a surplus at the end of the fiscal year, Nonini said he will fight to return some funds to public education. Idaho education dollars were slashed by $128 million in 2010.

Sen. John Goedde, R-Coeur d'Alene, also expects an anticipated surplus of revenue to be one of the session's dominating issues.

After placing into the Budget Stabilization Account some of the revenue expected to exceed conservative budget predictions, between $70 to $100 million could be left to be divided between the state's education, health and welfare and corrections budgets.

Who gets what, and what they plan to do with the money is the discussion that should headline much of the 2012 session, Goedde said.

"It's certainly better to have more revenue than we anticipated," he said. But "whatever we have, what appears to be additional money, there will be a fight where that money goes, which holes to fill."

Sen. Jim Hammond, R-Post Falls, says budgeting will still be tight.

"The critical issue for this session will continue to be constraining spending due to very slow growth in the business sector," Hammond said. "I just listened to a presentation (on Friday) where budget requests exceed projected revenue by almost $70 million.

"It is important that we budget conservatively to assure that we provide every opportunity for businesses to grow and move Idaho out of the recession."

Hammond said he doesn't expect to see any new taxes or programs, but he doesn't anticipate further cuts either.

More work on tweaking urban renewal is ahead, Hammond said. Concerns remain about such funding extending beyond economic development and job creation - the tool's original intent.

Rep. Frank Henderson, R-Post Falls, said his emphasis will be on job creation.

"I believe this is an excellent year to improve our opportunities to put people back to work," he said.

Henderson said he intends to work closely with new Department of Commerce Director Jeffrey Sayer on programs to help existing companies expand.

Henderson plans to propose an amendment that lowers a requirement for employers to access Department of Labor funding for workforce training. Under the current law, employers must pay at least $12 per hour and offer benefits, but Henderson believes lowering the wage to $9 per hour is more realistic for the local market.

Henderson would also like sales taxes charged on building materials to be repealed.

"Forty percent of a new building's cost is in materials, and we charge a 6 percent sales tax on that," he said. "That's a deterrent."

The measure would apply to both existing businesses and those interested in coming here.

"I want to repeal any regulations that stifle job creation," he said.

Henderson said he's also interested in a bill that would help the aircraft industry expand in Idaho.

Henderson and other District 5 legislators created an economic development brochure touting North Idaho that the Department of Commerce would like to use as an example to promote other regions of the state, he said.

Rep. Dick Harwood, R-St. Maries, admits his plans this upcoming session involve some hefty undertakings.

Topping his agenda is kicking the Environmental Protection Agency out of Idaho, he said, so the state can handle its own cleanup efforts and regulations.

"The state already has its own Department of Environmental Quality," he said. "And they do all the work for the EPA now as it is."

He would like to repeal the state laws that give the EPA authority in the state, he said.

"We're going to see what we can do to just stir that pot, to move it in that direction," he said.

Harwood added that he has heard constituents complain of the IRS taking money directly out of the accounts of folks owing back taxes, he said. He wants the legislature to bar that from happening further.

"The 14th amendment and the 15th and the 4th amendments all say you can't take property without due process," he said.

Harwood also predicts the legislature overall will be grappling this session with creating an insurance exchange.

The effort will be compounded by a general outcry against creating it at all, he said, reflecting resistance against the federal measure.

"That will be one of the biggest issues," he said.

Rep. Vito Barbieri, R-Dalton Gardens, says a lot of time will be spent addressing whether Idaho should allocate the $20.3 million dollar grant to continue implementation of the federal health care mandate.

“This will be a critical issue. Opposition is formulating an alternative plan that does not require a state or federal exchange but rather sets up a private structure overseen by the state, to better address the issues of affordability to citizens and costs to the state general fund,” Barbieri said.

The thrust of the opposition’s focus is that voters are concerned about reducing medical costs, he said, and how the health care insurance exchange will reduce costs is unclear.

“The emphasis has been giving too much weight to government conceived remedies at the expense of private sector productivity. This notion of ‘balance’ is being worked into the conversation,” Barbieri said.

There is rumor a cigarette tax proposal will come forward, he said, and if it does, it too, will be a critical issue.

Barbieri said he intends to sponsor a bill requiring agency rules and regulations to pass both houses before taking effect. Currently, only one side of the legislature need approve a rule for it to go into effect, he said.

“Another issue I intend to address is the law regarding the purchase of raw milk. I would like to make it explicitly legal for consumers within Idaho to purchase raw milk,” Barbieri said. “Also, I am hoping to co-sponsor a bill, similar to what Utah enacted last year, to provide for a sound money mechanism to be available as an alternative to the dollar should the dollar begin to radically devalue.”

Rep. Phil Hart expects the legislature will remain on the same course as the past two years, with most focus on balancing the budget.

"Trying to refrain from growing government, and putting some money away in the rainy day funds, if we can afford to do so," the Athol lawmaker said.

The biggest challenge, Hart believes, will be keeping Idaho business-friendly so the state economy can recover. He sees the key as keeping taxes and regulations to a minimum.

"I think we have a resilient economic system, and I think if government can stay out of the way, I think our economy can bounce back," the Republican said.

Hart preferred not to disclose his own goals for legislation this session.

Rep. Marge Chadderdon, R-Coeur d'Alene, is returning to Boise after taking the session off due to illness, and said she's looking forward to it.

"I'm healthy and well and ready to go back to work," Chadderdon said.

Chadderdon is dusting off a bill she was working on prior to her absence.

The legislation would create a license plate that would support the care of pets in Idaho.

"It would have a fee added that goes to a foundation to be disbursed through a grant process," she said.

The money would likely be used for spaying and neutering programs, but could help address other issues involving pets in Idaho communities.

Chadderdon said lawmakers will be looking at tax increment financing and how it affects community colleges. She said they will likely seek to remove community college taxing districts from urban renewal districts, and she supports that.

Regarding any possible budget surplus, Chadderdon indicated she thinks the reserve funds drained over the last few years need to be replenished. "We only owe it to some of those rainy day funds, to start making sure that they're there should we need them again," Chadderdon said.

Kathy Sims, R-Coeur d'Alene, said lawmakers will be looking at a bill she worked on through last summer.

"It has to do with the election laws, and as you know, we had a problem with an election in Coeur d'Alene," Sims said. "I think it's very solid."

Sims said the bill, which she has been working on with other legislators, seeks to clarify audit procedures and addresses several other issues, including the early opening of ballots.

Sims said she is hopeful the budget, while still tight, will be somewhat easier to deal with this year.

"I think we'll be able to get our work done early, and get on home," Sims said.

Staff writers Alecia Warren, Tom Hasslinger, Brian Walker and Maureen Dolan contributed to this story.