Budget leader Cameron says holdbacks, special session now doubtful

Budget leader Cameron says holdbacks, special session now doubtful

by
Idaho Freedom Foundation staff
May 5, 2010
Idaho Freedom Foundation staff
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May 5, 2010

The April tax revenue shortfall numbers likely won’t lead to spending holdbacks in the next year or a special legislative session, according to one of the lead budget writers in the Idaho Legislature.  Sen. Dean Cameron, R-Rupert, said the early report showing April revenues are $55.5 million below the projections of Idaho state economist Mike Ferguson are a sigh of relief, because tax collections are still close to the lower projection lawmakers used to set the state budget.

“Our projections are showing to be accurate,” Cameron told IdahoReporter.com.  Including the incomplete April numbers, tax collections are $13.5 million below lawmakers’ forecast.  “We took quite a bit of criticism when we adopted a lower number to budget to … Now we’re being proven accurate.”  Cameron co-chairs the Joint Finance-Appropriations Committee, which sets the state budget.

Cameron also said that if revenues don’t worsen much more, Gov. Butch Otter could manage state finances without additional reductions in the current or next fiscal year.  “They can easily handle it without the need for additional holdbacks or a special session,” Cameron said.  The added savings could be found at the end of the budget year by limiting encumbrances, which is when state agencies purchase something in the current budget year, which ends June 30, that they don’t expect to need until the next budget year.  “Just by the governor minimizing encumbrances, you can cover the $13.5 million, in my opinion.”  Cameron said last year, holding off on year-end spending saved $25 million in the budget.

Like Otter and Democratic candidate for governor Keith Allred, Cameron said the higher-than-expected revenues from sales tax and income tax withholding are a good sign for the state economy.  “Those are positive signs that we are at least sort of edging to the bottom,” Cameron said.  It’s the second straight month sales tax revenues have bested projections, but Cameron warns that things could turn around.  “Two months does not yet make a trend, and even these numbers do not show dramatic growth.  All they show is a flattening.”  Idaho’s tax revenues for the current year still lag behind last year’s totals.

Cameron said he disagreed with Allred’s statements that lawmakers made unnecessary reductions to public schools and other state programs in the next budget.  “I was disappointed in the lack of understanding and misinformation that Mr. Allred possesses on the state budget,” Cameron said.  He said Democrats have been critical of the majority Republican Party’s budget setting for years, including policies to set up reserve funds and spend them down over several years, as well as ideas to raise revenue and set a larger state budget this year.  “Their track record is dismal.  If we’d’ve followed the minority’s plan at any step of the way, we’d be in the same bowl of soup that Oregon, Washington, California, and all these other states are in.”  Oregon and Washington have both raised some taxes this year, while California lawmakers are still working on a state budget.  “We believe the decisions we made this session will stimulate the economy,” Cameron said.  “Hopefully the fact that the state showed fiscal restraint … will provide additional stable footing for businesses.”

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