Idaho's state tax revenues for June exceeded projections by a whopping $19.1 million, with every category of tax finishing the year ahead of schedule. Highest, according to Wayne Hammon, Gov. Butch Otter's budget chief, was the volatile and hard-to-predict corporate tax, which came in almost $46 million ahead of forecasts for the fiscal year that ended July 1. “That shows companies doing business in Idaho are doing more business than they were a year ago – that's very good news for all of us,” Hammon said. And individual income tax moved back into the positive category again in June. “To see the individual income tax strong again I think is a good, strong indicator for the economy,” he said.
The resulting $85.3 million surplus for the year, compared to the January projections, means Gov. Butch Otter won't sign an executive order to hold off on a scheduled increase in the grocery tax credit next year – a delay that would have saved the state $15 million in next year's budget – even though lawmakers passed a concurrent resolution authorizing him to do so. Otter had asked lawmakers to pass the resolution, and made it part of his budget proposal. Hammon said, “We recommended it because we thoguht it was necessary, but now that we don't need it, we can back off.” The year-end surplus is large enough that even after the required multimillion-dollar payments to schools and community colleges to meet maintenance-of-effort requirements attached to hundreds of millions in federal stimulus funds the state accepted in recent years are subtracted, there's more than enough left to roll over the $15 million into next year's budget to cover the grocery tax hike.
That means that next April, when Idahoans file their 2011 income tax returns, the credit they can take to offset sales taxes paid on groceries will rise $10 from the current $50, to $60 for most taxpayers, and from $70 to $80 for the low-income; seniors also receive an additional $20 credit.