Here’s a news item from AP: “Idaho’s chief economist predicted state tax revenue will decline in fiscal years 2009 and 2010, the first time he says the figure has dropped two straight years. Mike Ferguson, who does economic forecasts for Gov. C.L. “Butch” Otter, expects revenue to drop 12 percent to $2.56 billion in the year ending June 30, with a 0.4 percent drop to $2.55 billion for the next 12 months. In December, Ferguson forecast revenue would dip 9.5 percent this year, before rising 1 percent in 2010. With a prolonged recession Ferguson’s studies show will set a record for the post-World War II period, he said, “We’re clearly now in ‘hunker down’ mode.” Ferguson’s data came as Idaho released unemployment figures that rose to 6.8 percent in January, from 6.6 percent in December. Some 51,000 Idaho residents are out of work.”
The news brought a somber reaction in the Joint Finance-Appropriations Committee, though Ferguson’s new figures, according to Otter’s budget director, Wayne Hammon, are actually right in line with the pessimistic revenue numbers set earlier by the Joint Legislative Economic Outlook & Revenue Assessment Committee and formally adopted by JFAC. “Mike’s new numbers are right in line with what they already did,” Hammon said. Last year, lawmakers adopted lower numbers than the governor’s revenue forecast on which to base their budget, out of caution.
Senate Finance Chairman Dean Cameron, R-Rupert, told the joint budget committee that the co-chairs hope to have an outline by Monday on how they’ll proceed, and by Thursday or Friday of next week, start setting some budgets. “We will have to re-do the 2009 holdback bill,” Cameron said. “We’ll need to set a revenue number Tuesday or Wednesday next week. We’ll need to determine what level of salary or personnel cost reductions” will be built into budgets. Earlier, JFAC unanimously voted for a statewide 5 percent cut, but that was before the federal economic stimulus bill passed. Cameron advised legislative budget writers as they head into the weekend, “Try and get some rest. We’re going to be running pretty hard over the next couple of weeks.”