Final tax revenue data confirms that Idaho had a $14.5 million surplus in March. Those higher than expected revenue nearly fill up a $16 million shortfall for February, and still leave the state $27.1 million below the tax collections estimated by Idaho’s chief economist, Mike Ferguson. Revenue totals for April, the biggest month for tax collections, are crucial to the state budget process.
Ferguson said the $27.1 million shortfall can be found entirely in personal and business income tax totals that are below expectations. The sales tax, and taxes on products like alcohol and cigarettes are above projections. Individual incomes also accounted for the higher than expected numbers in March, coming in $15.6 million above expectations. Corporate income taxes were $800,000 below projections for March, but sales tax revenues were $800,000 above projections.
The final March revenue numbers are close to initial reports that revenues were between $10 million and $15 million above expectations. However, April numbers, which have yet to be released, remain key. Idaho took in $129.3 million in March, but Ferguson expects the state to bring in $373.5 million in April, thanks to many personal and corporate tax returns coming in near the April 15 deadline. This fiscal year’s revenue projections are down from last year, when Ferguson expected the state to take in $420.1 million, but only collected $372.9 million, due to the sluggish economy.
Ferguson’s Idaho Outlook report, which contains the March tax numbers, also discusses some economic impacts of the new federal health care reform laws. Ferguson, who works for Gov. Butch Otter’s Division of Financial Management, wrote that plans to finance new health care measures by raising taxes on the rich probably won’t work. “The likely result will be more tax avoidance behavior and lower tax receipts,” he wrote. He also said there are only weak provisions to control the cost of medical services. Using a model from the economic analysis firm IHS Global Insight, Ferguson wrote that the health reform would raise the national debt by $127 billion over the next decade, which is far more than the Congressional Budget Office estimates.