Idaho on pace for record $800 million budget surplus
BOISE, Idaho (AP) — Idaho could finish the fiscal year at the end of June with a record budget surplus of $800 million, Gov. Brad Little announced Wednesday.
The Republican governor said he will advocate for additional tax cuts along with investments in key areas, with education topping the priority list. Lawmakers will take up the budget when they meet in January.
Little attributed the strong state economy to fiscal conservatism, swift action during the coronavirus pandemic and responsible allocation of billions of dollars in federal COVID-19 rescue money.
He also said, “our relentless focus on cutting red tape are the reasons Idaho’s economy is catapulting ahead of other states right now.”
Little noted that May revenue numbers came in $580 million ahead of forecasts and, at nearly $850 million, best in state history.
The Division of Financial Management said revenue numbers for May, also released on Wednesday, were far above predictions because the deadline for paying income tax was delayed from April to May due to the pandemic.
Overall this year, individual income taxes have brought in $2.3 billion, about 25% more than predicted. Sales tax collections are up nearly 8% to $1.8 billion.
The Tax Relief Fund, which receives sales taxes on online purchases, collected $12.8 million in May. Officials said that’s the third-highest monthly remittance to that fund, even eclipsing December 2020 numbers that include Christmas shopping.
Idaho’s unemployment rate is just over 3%, slightly above pre-pandemic levels.
Budget setting for fiscal year 2021 occurred before the onset of the coronavirus pandemic, and state officials feared a big deficit. State agencies were asked to absorb a 5% cut.
But the state received billions of dollars in coronavirus rescue money, and many Idaho residents and businesses also received pandemic help money. Federal money has also been used to boost unemployment benefits. In addition, Idaho has been one of the fastest growing states, with new residents bringing in additional money.
During the last legislative session that ended earlier this year, lawmakers approved and Little signed legislation for a nearly $400 million tax cut as well as millions of dollars on infrastructure spending. The predicted $800 million surplus has already accounted for those tax cuts and additional spending.
“Last year, we were battening down the hatches and preparing for a revenue decline,” said Little’s budget chief, Alex Adams. “A year later, we’re on pace for a record surplus. It’s really an Idaho success story of how Idaho has rebounded out of COVID better than nearly any other state in the nation.”