JFAC accepts lower tax revenue report

JFAC accepts lower tax revenue report

by
Idaho Freedom Foundation staff
January 27, 2010
Idaho Freedom Foundation staff
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January 27, 2010

The lawmakers who write the state budget have accepted the tax revenue projections voted on by a different panel of lawmakers last week.  But that forecast could change by the end of next week.

The projections from the Economic Outlook and Revenue Assessment Committee (EORAC) last week call for $2.28 billion in revenues in the current budget and $2.29 billion in the next budget.  Those revised revenue projections would require reductions beyond what Gov. Butch Otter recommended earlier this month.  An additional $69 million would need to be trimmed from the current budget that ends July 1 and $59 million from the next budget.  The Joint Finance-Appropriations Committee (JFAC) received the revenue forecasts Wednesday.

“It’s been a formidable process,” said Rep. Cliff Bayer, R-Boise. “Even the economic specialists admit that the dynamics and volatility make it hard to predict.” He said that uncertainty is heightened because Otter’s budget recommendations include drawing down most of the state’s rainy day funds.  “For all intents and purposes our safety net of buffers and reserves are going away.”

Sen. John Goedde, R-Coeur d’Alene, voted against the lower revenue projections, but said it’s important that lawmakers don’t overestimate revenues, as they did last year. “Two holdbacks in one year was tough to stomach,” Goedde said.  He also said that the projections may change before the budget is written.  “You may be able to update the projection that’s in front of you.”  The latest tax revenue will be available at the start of February, which could alter projections.

“I don’t think I’ve ever seen us deviate so far from the sentiment of the committee as this,” said Sen. Nicole LeFavour, D-Boise, who also voted against the lower projections.  She said lawmakers may end up reducing state services more than is required.  “It would mean severe cuts to programs that would not be necessary,” she said.

Eight lawmakers serve on both panels.  “Those of you that have done double duty for us has been so helpful for us,” said Maxine Bell, R-Jerome.

Lawmakers will need to decide where additional cuts could come from. Public education and health and welfare are the biggest line items in the budget and could face more reductions.

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