For the third time in 2010, the Board of Examiners, a three-member panel consisting of the governor, attorney general, and secretary of state, approved money, this time $11 million, to be transferred from the state general fund to the state's tax refund account to allow the state to meet its financial obligations to taxpayers. Officials with the Idaho State Tax Commission told board members at Tuesday's meeting that the funds are necessary to prevent the state from accruing additional expenses.
Mark Poplar, financial officer of the commission, told members of the panel that the money is vital to ensure that taxpayer refunds are returned on time and without the state paying interest on those refunds. Idaho has a specific amount of time in which to issue refunds and if it does not, as Poplar explained, the state would be forced to pay interest on all refunds not returned in the time frame. If the board had not decided to approve the money for the commission, Poplar estimated that Idaho would accrue $113,000 in interest payments to taxpayers. Poplar said the state will only lose out on about $4,500, the cost of the commission's use of the money until the end of the month.
The commission only plans to use the money to shore up refunds until the end of the month. "We intend to pay this back by the end of June," said Poplar. At the end of May, the commission had approximately $689,000 in the refund account, an amount insufficient to cover all refunds in June. Poplar said that lower-than-expected tax revenues were mostly to blame for the commission's third request for funding. The commission expects to return the $11 million to the state at the end of June, along with an additional $4.7 million, which will be used to pay back the first two loans from the general fund.
The commission has requested additional dollars from the board twice this year, though in larger increments. In February, the board approved a $30 million loan to the commission, though commission officials asked for $45 million. In April, board members approved an additional $15 million for tax refunds.
Tuesday's request appeared to embarrass commission officials. "We've been here three times this year and definitely I apologize for that," Poplar said. Attorney General Lawrence Wasden, who was not in attendance at the meeting but chimed in via phone, suggested that the board and other government officials re-examine the refund allocation process to ensure that it works as efficiently as possible. Royce Chigbrow, a commissioner for the tax commission, rejected that notion and complimented the current way of doing things. "I feel that the current system has a check and balance on the process," Chigbrow said. "It shows that the system is working."
Shortly after the transfer was unanimously approved, Senate Pro Tem Bob Geddes, R-Soda Springs, sitting in for Gov. Butch Otter, who is on a trade mission to China, and Lt. Gov. Brad Little, also out of state, said that the state has the responsibility to issue tax refunds in a timely manner. "The money that needs to be refunded is not the state’s money, it is the citizen’s money," Geddes said. Secretary of State Ben Ysursa poked fun at California just before the meeting adjourned. "The refunds will be in real money and not in IOU’s like a state to the south of us a little bit," Ysursa joked. In 2009, that state was forced to issue IOU's to some taxpayers after it ran out of money to fund them.