Preliminary Idaho tax revenue numbers show that Idaho took in $55.5 million less than projected in April, the state's largest revenue month. April had been called a "make or break" month by lawmakers who put together the state budget.
"I have no doubt that our economy is headed in the right direction," Gov. Butch Otter said in a news release accompanying the revenue numbers. "However, April’s tax filings largely still reflect what was happening with the economy last year, not over these past few months of marginally improving conditions."
If the gap in April holds, the state will be $82.6 million below projections for the current fiscal year, which ends in June. The budget approved by lawmakers earlier this year expected less tax revenue than Idaho state economist Mike Ferguson predicted. The current budget has a $69 million cushion, which the current shortfall exceeds. The Legislature gave the governor a contingency plan that would allow him to draw up to $107 million from next year's budget to ensure that the current budget is balanced, so the current low tax revenues will likely not require a special legislative session, but could force additional spending reductions in the next fiscal year.
"Now it’s clearer than ever that we are doing the right thing by remaining prudent and cautious in our approach to using taxpayers’ money," Otter said. "I’m grateful that legislators recognized that and gave me the tools to balance the budget in Fiscal (Year) 2010. The Legislature deserves a lot of credit for working with me to ensure Idaho’s state government lives within the people’s means.”
Otter also said that both sales tax receipts and personal income tax withholding were up for April. "That means more people are earning money and feeling better about their prospects," he said. "That’s good news, but it doesn’t make up for other tax receipts remaining well below projections."
Ferguson predicted Idaho would bring in $373.5 million in tax revenues in April, largely from people and businesses filing tax returns by the April 15 deadline. Final April tax revenue numbers will be available on May 15. Read the full news release below.
STATE’S APRIL REVENUE WAS BELOW PROJECTION
(BOISE) – The Idaho Division of Financial Management issued preliminary, incomplete April tax revenue data today that shows the State took in $55.5 million less than projected during the past month. The numbers will be complete and “official” on May 15. Governor C.L. “Butch” Otter was briefed on the shortfall and issued the following statement:
“Sales tax receipts were up in April. So were receipts from individual income tax withholding. That means more people are earning money and feeling better about their prospects. That’s good news, but it doesn’t make up for other tax receipts remaining well below projections. I have no doubt that our economy is headed in the right direction. However, April’s tax filings largely still reflect what was happening with the economy last year – not over these past few months of marginally improving conditions. There is a lag between private economic activity and its public benefit. We must keep working to create career-path job opportunities for more Idahoans. If we do that, the revenue will come. But for now it’s clearer than ever that we are doing the right thing by remaining prudent and cautious in our approach to using taxpayers’ money. I’m grateful that legislators recognized that and gave me the tools to balance the budget in Fiscal 2010. The Legislature deserves a lot of credit for working with me to ensure Idaho’s State government lives within the people’s means.”
