The earliest preliminary reports on April’s state tax collections - a key month, with the biggest collections of the year - show they’re down by $55 million from projections, the AP reports, meaning the state would head into the final two months of its fiscal year with a $13.5 million budget deficit. The shortfall was due in part to higher than expected income tax refunds. Click below to read the fully story from AP reporter Todd Dvorak.
Idaho revenue misses April projection
By TODD DVORAK, Associated Press Writer
BOISE, Idaho (AP) — Preliminary tax revenue data show Idaho collections in the critical month of April fell more than $55 million below the estimates set by the state’s chief economist, a shortfall due in part to higher-than-expected income tax refunds.
But the unofficial information released Monday shows state revenue is tracking more closely to forecasts set by state budget writers earlier this year when they reconfigured the state’s $2.28 billion budget for fiscal year 2010. Based on the legislative budget figures, April’s performance means the state is facing a $13.5 million deficit heading into the final two months of fiscal 2010.
Gov. C.L. “Butch” Otter called the latest figures disappointing but no cause for panic. Otter has ruled out imposing another round of spending holdbacks on state agencies and at least for now is not considering calling lawmakers back to Boise to tweak and balance the $2.28 billion 2010 budget.
State Budget Chief Wayne Hammon said Otter instead will reach into rainy day accounts authorized by lawmakers and urge agency directors to look for savings until the fiscal year ends June 30.
“The governor does not envision calling a special session because he has the tools available to address the issue,” Hammon told The Associated Press.
Revenue for April — always the biggest month for collecting taxes and fattening the state’s general fund — was $1.8 billion, about $55.5 million short of the forecast set by the Division of Financial Management.
In January, lawmakers on the GOP-dominated Economic Outlook and Revenue Assessment Committee scaled recommended a more conservative revenue forecast and adjustment to the 2010 budget.
The 18-member committee estimated $2.28 billion in tax revenue for the fiscal year ending June 30, and for 2011 a revenue goal target of $2.29 billion, about $60 million less than the state’s chief economist.
The disappointing revenue news for April follows positive developments in March, when tax revenue came in $14.5 million above projections, the first time in six months revenue beat expectations.
Like March, April also showed improvement in sales tax collections, a sign people are spending more on goods and services. Sales tax receipts generated $800 million in April, more than $2.6 million higher than projected for the month.
But the overall revenue outlook took a hit in April because the state dished out more money in tax refund checks than anticipated, and corporate income taxes came in $11 million short of projections.
Hammon said the total amount paid back to taxpayers in April has not yet been calculated. Overall, the report shows individual income tax collections at $928 million, $47 million below forecasts.
Hammon said a closer look at the report shows current individual income tax withholdings — money held out of April paychecks — were up for the month, a sign more people are working and those working are logging more hours. Last month, the Idaho Department of Labor reported the state unemployment rate fell to 9.4 percent in March, the first dip in 32 months.
For Otter and Republican lawmakers, April’s lackluster revenue performance reaffirms the conservative stance taken earlier this year when the Legislature reworked the 2010 budget, adding more spending cuts and setting revenue targets below projections preferred by Democrats.
“The caution we showed was probably the correct path,” said Rep. Maxine Bell, R-Jerome, co-chair of the legislature’s budget writing committee.
There is some hope the state can turn things around in May and June, the months when those granted tax extensions are due to make payments.
Copyright 2010 The Associated Press.