Special legislative session remains an unlikely possibility if revenues drop

Special legislative session remains an unlikely possibility if revenues drop

by
Idaho Freedom Foundation staff
March 25, 2010
Idaho Freedom Foundation staff
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March 25, 2010

Gov. Butch Otter could call lawmakers back to Boise if state tax revenues continue to lag, but his budget chief says that won’t be the first course of action.

Wayne Hammon, the director of the Department of Financial Management, said the governor approved the contingency plan lawmakers established if tax revenues remain below expectations.  “We’re confident that the language approved gives the governor the tools needed the meet the constitutional mandate.”  The state must balance its budget for the current fiscal year, which ends June 30.  Hammon said the governor is being prudent with state spending, and has outlined his own path forward if tax revenues are short from anywhere from $20 million to $100 million.  The exit plan approved by lawmakers would provide up to $107 million to cover shortfalls in the current budget, though most of that money is planned to be spent in the next budget.

Hammon wouldn’t reveal the details of any of those plans, and said the governor wouldn’t proceed until he knows what the shortfall will be.  Tax revenues are currently 2 percent below expectations set by lawmakers.  Hammon said the results of income tax filings due on April 15 will be key.  “April’s the make or break month for tax collections,” he said.

Sen. Dean Cameron, R-Rupert, said that if tax revenues drop further and open up a gap a in the state budget, he expects the governor to call lawmakers back to Boise for a special session.  “If we get worse than $100 million, he definitely has to ask us back,” he said.  “I think if it gets close, he’s going to want to call a special session.”  Cameron said a special session wouldn’t automatically mean that lawmakers would look to increase taxes.  He said there are other options, including targeted reductions to state agencies and drawing further from dedicated funds.

Cameron added that he thinks the economy may take a turn for the worse due to the recently approved federal health care legislation.  “I think we are in very precarious times,” he said.  Cameron said he’s talked with several employers who say they’ll hold off on expansion plans and potentially lay off employees due to the legislation.  “The sentiment is extremely scary,” he said.

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