Idaho’s latest tax revenue data confirms that the state saw a $12.6 million shortfall in December, but state chief economist Mike Ferguson continues to point out potential bright spots in dim overall numbers. Ferguson’s newest tax revenue projections, which were made public during Gov. Butch Otter’s state budget presentation, started with December, so the shortfall is being viewed by some lawmakers as a bad sign for the state economy.
Prelimary revenue numbers for December initially showed a $13 million shortfall, but that was reduced to $12.6 by mid-January. The shortfall was a key factor in a decision last month by a panel of lawmakers to create a lower revenue forecast for the next state budget. Preliminary data for January should be available to lawmakers in the next few days, and could also adjust the revenue projections lawmakers use to write the budget.
Ferguson said in his monthly report, Idaho Outlook, that some positives for the state economy were hidden by the overall shortfall. “The bottom-line number masks some quite positive revenue performance in two key components of the General Fund revenue stream,” Ferguson said in the report. “Specifically, sales tax receipts [and] withholding collections.” Sales tax collections were only $0.1 million below expectations, which is the best since July. December has one of the higher sales tax projections due to holiday shopping purchases. Paycheck withholding collections were slightly above expectations, according to Ferguson. However, personal income tax collections were down $11.6 million for the month. Ferguson said in the report that filing collections led to that hole, and that he doesn’t expect to see a similar gap in the future.
Read Ferguson’s full report at the Department of Financial Management website (pdf).