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Uncertainty over latest tax revenue numbers

Uncertainty over latest tax revenue numbers

by
Idaho Freedom Foundation staff
March 2, 2010
Idaho Freedom Foundation staff
Author Image
March 2, 2010

A leading Idaho lawmaker on budget issues said Tuesday he hasn’t seen any new tax revenue numbers after the top House representative on education said he’s heard it is $10 million below expectations.  Meanwhile, the economist who puts together the tax projections and collections report said looking at the raw numbers doesn’t tell you all you need to know about the Idaho’s financial situation.

Rep. Bob Nonini, R-Coeur D’Alene, the chair of the House Education Committee, told the Associated Press Tuesday that tax revenues could be $10 million under projections, as reported by Fox 12.  But Sen. Dean Cameron, R-Rupert, who co-chairs the Joint Finance-Appropriations Committee (JFAC), which sets the state budget, said he hasn’t seen anything yet.  “We have not received any numbers whatsoever,” Cameron said.  “Normally we would receive them here momentarily, but we haven’t even received preliminary numbers.”  Cameron said he didn’t think another shortfall would affect the budget.  “If we are short, we’ll have to look at the reasons we’re short, but I would say it’s anticipated with what we expected.”  Lawmakers on JFAC  believe they balanced the current state budget, which runs through the end of June, with a revenue projection that is $69 million lower than the state economist Mike Ferguson’s projections.

Ferguson, who works for Gov. Butch Otter's Department of Financial Management, had no comment about Nonini’s statement, but said the numbers only tell part of the story.  “The raw numbers are being taken on their face as being somehow pertinent and relevant, and that’s a problem,” Ferguson told IdahoReporter.com.  “They don’t function without analysis.  They’re not meant to be used in raw form.”  He said he offered some context in the monthly Idaho Outlook newsletter, but that message is being lost by some.  “What’s happening now is raw numbers are going out and everybody’s waving them around and that becomes the basis of important decisions.”  He added that his tax revenue projections are based on mechanical averages that look at past years, but haven’t taken into account a downward trend of income tax filings at the end of the year, which has in part led to the shortfalls in December and January.

Ferguson said April could be a crucial month for Idaho tax revenues.  That’s when the state gets most of its income tax filings.  “April could still be a big swing one way or the other,” he said.  That phenomenon is called the “April Surprise.”  Ferguson said Idaho has a larger April Surprise, because it doesn’t require estimated payments from businesses and investors throughout the year.  Other states have quarterly payments.

Read IdahoReporter.com's story on Ferguson's January tax revenue report here.

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