Mike Ferguson, chief economist for Gov. Butch Otter, gave a briefing for reporters on the state's revenue outlook this morning, and said, “The economic outlook is changing rapidly, and it's not getting better. ... Idaho is actually leading in terms of the decline in economic activity.” Though Idaho has fared better than the nation economically in recent years, that's starting to change. “The recent economic information shows that Idaho is among the hardest-hit in terms of the economic downturn,” Ferguson said.
In January of 2008, Idaho's unemployment rate was the third lowest in the nation. In October, it was 19th. In January, we were ranked 21st for the percentage growth in nonfarm employment in the state, vs. the same month a year earlier. In October, we hit 47th. The only states faring worse on that measure were Arizona, Florida and Rhode Island. All this doesn't bode well for the state's budget outlook. “We are now at a point where this forecast, as of October, is the worst experience in Idaho since the early '80s,” Ferguson said, when Idaho suffered an economic downturn that was “brutal.”
Until fiscal year 2002, there had never been a year when Idaho's general fund revenue actually dropped from the previous year, but it happened that year. Now, it's happening again. As of the last forecast in August, it looked like Idaho's general fund revenue this year would be 4.9 percent less than last year. Now it's clearly going to be much worse. January's forecast still is being developed, but Ferguson said, "From the standpoint of the economy, what we're going to be experiencing is pain. That looks to be the case for the next year or so."