Posts tagged: Idaho Economy
Jani Revier, Gov. Butch Otter’s budget chief, told the Associated Taxpayers of Idaho today, “We expect a conservative budget that doesn’t over-commit.” She said, “The good news is that general fund revenues are recovering from the recession. … The general fund is forecasted to return to the fiscal year 2008 levels by next fiscal year.” Idaho transferred an additional $85 million in unexpected revenue to its budget stabilization fund on July 1, she noted, but said, “Our state economist has warned that much of this revenue is one-time.” The budget stabilization fund, the state’s main rainy-day savings account, now has $135 million in it – nearly reaching its statutory cap.
“As the state’s economy began to recover, the governor set forth the following principles” for the state budget, Revier said. They are: Not to grow at the same rate as the economy; maintaining structural balance; and replenishing rainy-day accounts. “We are not going to simply restore lost general fund from the agencies that we cut,” she said. “The governor wants to focus on making strategic reinvestments,” focusing on core areas of government and not losing efficiencies gained during the years of downturn.
Revier said Otter has made clear that certain items will be included in his budget proposal for fiscal year 2015: Recommendations of his education task force; health and human safety needs; addressing a maintenance backlog; and covering increased employer healthcare costs. The state is expecting a substantial increase in those costs, to the tune of $1,400 per employee, she said, and covering that will be “a significant investment in our state’s workforce.” She said once basic needs are covered for state government, “There just isn’t much money to do anything new.”
Scott Anderson, president and CEO of Zions Bank, said there were five reasons his company decided to expand in Idaho, the reasons “we decided to make significant investment in this new building just up the street,” the nearly finished office tower at 8th and Main streets in downtown Boise that’s the bank’s new Idaho headquarters. The five? Low energy costs (32% below the national average); low construction costs (4th most cost-effective place to build in the western U.S.); educated workforce, in that the state ranks in the top third nationally for the number of adults with a high school diploma; easy transport of goods, including access to the Columbia River system; and high quality of life, from a serious crime rate 21 percent below average to abundant recreation.
“Each of these five encouraging factors makes the state a very desirous place to live,” Anderson told the Associated Taxpayers of Idaho conference this morning. He also noted that Idaho has the lowest per-capita tax burden in the nation and the nation’s second-lowest property taxes – but didn’t include those factors in his top five. “At Zions, we are very bullish on the future of Idaho,” he said. “We believe in Idaho and so we are investing in Idaho.”
Idaho’s state tax revenues for November came in $8 million higher than forecast, thanks largely to stronger than expected individual and corporate income tax collections, which were high enough to offset a slightly lower than anticipated sales tax month. The month’s revenue figures were 4.2 percent over forecast. For the fiscal year to date, tax revenues are now almost exactly on forecast, running ahead by $6.5 million, or 0.6 percent. You can see the full monthly General Fund Revenue Report here.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho's seasonally adjusted unemployment rate fell slightly to 6.7 percent in October, ending an upward trend in which the rate increased by seven-tenths of a point between April and August. The Idaho Labor Department says the number of Idaho workers without jobs rose slightly in September before falling by more than 1,000 to 54,400 in October, marking the fourth straight month that the number of unemployed has been above 50,000. Idaho's October unemployment benefit payments were down 37 percent from October 2012, with nearly $9 million in state and federal benefits being paid to a weekly average of 8,800 claimants. In October 2012, an average of 14,500 claimants were paid $14.2 million. Nationally, the unemployment rate was 7.2 percent in September and 7.3 percent in October, reflecting the temporary layoff of federal employees.
Total personal income in Idaho in 2012 was up 3.9 percent from 2011, a third of a percentage point below the national average, according to new estimates out today. Rising business profits were a major driver of the growth in personal income, with business profits up 6.6 percent statewide; wages rose only 2.5 percent, compared to 4.3 percent nationally.
One surprise in the numbers was that rural Idaho saw more of a boost than the state’s urban counties, the Idaho Department of Labor reports. Total personal income in Idaho’s 33 rural counties was up 4.4 percent from 2011, two-tenths of a percentage point higher than the national increase. In the state’s 11 urban counties, it was up 3.7 percent, which, was half a percentage point below the national increase.
The difference is even more pronounced for per-capita personal income, which rose 4.6 percent in rural Idaho to $33,649, compared to 2.5 percent in the urban counties to $34,654. But most of the state’s population is concentrated in the urban counties, and they’re gaining residents. Bob Fick of the Idaho Department of Labor reports that just one Idaho county, Custer County, showed a decrease from 2011 to 2012; molybdenum mining there has been soft. You can see Fick’s full report here, including a breakdown by county. (Note: The department issued a corrected report on Friday, slightly modifying the urban vs. rural figures; this link is to the corrected version.)
Idaho’s state tax revenue fell 5.6 percent below forecasts in October, a month after it swelled 6.4 percent ahead of forecasts in September. The result: Tax revenues are coming in just about as forecasted. The October revenues were down $12.8 million from the forecast; September’s were up nearly $16 million over the forecast. Year to date, Idaho has now collected just 0.2 percent less than was forecast for this point in the fiscal year.
Last month, Gov. Butch Otter hailed the strong September revenues as news that “validates our belief … that lowering taxes encourages more economic activity.” This month’s General Fund Revenue Report came out today just after 5 p.m.; Otter hasn’t yet commented on it. You can see the full report here.
Idaho’s state tax revenue surged nearly $16 million ahead of forecasts in September, beating the forecasted level by 6.4 percent. The extra revenue was enough to more than offset shortfalls compared to forecasts for the past two months, putting the state 1.6 percent ahead of forecasted revenue for the fiscal year to date.
Nearly every revenue category beat its projection in September. Individual income tax receipts were 11.3 percent ahead; corporate taxes were 5.5 percent over forecasts; and sales taxes beat forecasts by 3.2 percent. You can see the state’s full general fund revenue report here for the month.
Gov. Butch Otter touted the news when he addressed the Idaho Licensed Beverage Association annual convention today, drawing some appreciative whistles after he said, “We were off about $16 million – we brought in $16 million more than we thought we would.” He noted that income taxes were a big driver of that, even though Idaho lowered its top rates for both individual and corporate income taxes two years ago. Otter said the news “validates our belief … that lowering taxes encourages more economic activity.”
He told the liquor purveyors that just as “you’ve seen people try to drink themselves sober,” he doesn’t buy economic theories that say “the government can spend themselves rich,” and defended tax cuts Idaho’s granted the past two straight years, cutting into state revenues despite tough economic times and forcing “some tough decisions.” Said Otter, “In the long run, it paid off because we really created a climate for growth.”
Idaho state tax revenues came in very close to the forecast in August, falling just one-tenth of a percent below it, a difference Gov. Butch Otter's Division of Financial Management dubbed “negligible.” Tax revenues for the month were 3.5 percent above the previous August; for the fiscal year to date, which is two months old, revenues are running 3.8 percent above last year, but 1 percent behind forecasts. Individual income tax was $4.2 million below forecast for the month, but corporate income tax was $3.6 million ahead, while sales taxes slightly exceeded expectations. You can read the full monthly General Fund Revenue Report here.
Idaho’s unemployment rate notched up two-tenths of a percent in July to 6.6 percent, though it was well below the previous July’s rate of 7.2 percent. Six of Idaho’s 44 counties posted double-digit unemployment rates: Adams, Benewah, Clearwater, Lemhi, Shoshone and Valley; a year earlier, 10 Idaho counties hit that mark.
The Idaho Department of Labor reported that hiring levels slipped below normal in July and seasonal government layoffs ran slightly higher, driving up the seasonally adjusted unemployment rate, which now has risen for three straight months, for a rise of half a percentage point since April.
Ada County posted a 5.7 percent unemployment rate in July, down from 6.4 percent a year earlier; Kootenai County, 7.4%, down from 9.4% a year earlier; and Bonneville was at 5.6%, down from 6.1 percent in July 2012. You can read Labor’s full announcement here, and see by-county chart here.
Idaho’s July state tax revenues are in for the first month of the fiscal year, and they’re 1.8 percent below the revised forecast for the month – but 4.2 percent above last year at this time. The new forecast for fiscal year 2014 general fund revenues is for $2.8088 billion, a 2.1 percent increase over the previous fiscal year. It’s for a higher amount than the January forecast, but a smaller percentage increase – mainly because fiscal year 2013 revenues came in much stronger than forecast. The new forecast also reflects the impact of a $20 million state expense in fiscal year 2014 to reimburse local governments for a business property tax cut. You see the DFM’s full monthly General Fund Revenue Report here.
Gov. Butch Otter issued a statement on the revised forecast, reiterating that he doesn't want Idaho's state government to grow as fast as its economy; click below for his full statement.
The number of new hires in Idaho exceeded pre-recession rates in July for the first time since the economic downturn, the Idaho Department of Labor reports, with Idaho employers hiring 23,400 workers during the month. The monthly report based on employer filings of newly hired workers within 20 days of their hiring showed July’s total exceeded July 2007 by 500. The figures cover people hired to fill new jobs, along with those hired to fill existing jobs that open because a worker retired, died, quit or was fired. Click below for the full announcement from the Department of Labor.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — The Idaho Department of Labor says the state's seasonally adjusted unemployment rate for June edged up slightly to 6.4 percent — marking the second straight month the state's jobless rate has crept upward. Last month, the agency pegged Idaho's unemployment rate at 6.2 percent, ending a string of 21 straight months of steady declines in the number of Idahoans without work. The increase also comes amid a period of strong growth in the economy of nonfarm jobs. Overall, the number of workers off the job increased by nearly 1,900 in June, putting the total number of unemployed at more than 49,000. The higher jobless rate was recorded across the state. All but six of the 44 counties had higher June rates than the previous month.
Idaho’s state tax revenue came in 6.5 percent ahead of forecast in June, closing out the fiscal year with a $92.5 million surplus over the $2.658 billion the state had expected to take in for the year. That’s 3.5 percent; it’s a 6.3 percent increase from the previous fiscal year.
The higher-than-predicted tax revenues also triggered legislation sought by Gov. Butch Otter this year to transfer $85.4 million of the year-end balance into the state’s main savings account, the Budget Stabilization Fund. That boosts the total in the account to more than $135 million, a move Otter lauded today.
“Don’t get the idea that we’re flush just because we ended the budget year with a few extra bucks,” Otter declared. “We have plenty of needs and plenty of priorities. But the best way to ensure economic stability and continued growth is to remain prudent, cautious and responsible in how we allocate every one of those taxpayer dollars.”
The state’s surplus comes as agencies continue to struggle with years of budget cuts that haven’t been restored, and school districts across the state have increasingly sought local property tax hikes to make up shortfalls in state funding.
Otter’s office said in a statement that the year-end results “show the wisdom of his shared commitment with the Legislature to ensuring government does not grow as fast as Idaho’s economy and to continue refilling the state’s various rainy day funds,” adding, “That’s especially true in light of continuing uncertainty about the federal budget, federal fiscal policies and their impact on economic recovery.” You can read the General Fund Revenue Report here. Click below for a report from AP reporter John MIller, who notes that this makes the third straight year state tax revenues have exceeded forecasts, and that every category of collections, from sales taxes on retail goods to personal and corporate income taxes, came in at levels higher than originally estimated last year.
Idaho’s total personal income for the first quarter of 2013 was down from the previous quarter, even though business profits and farm income both were up. The Idaho Department of Labor says the 0.9 percent drop from the fourth quarter of 2012 came because of a decline in investment earnings, which were down 4.2 percent. Meanwhile, wage and salary disbursements were up 0.3 percent from the previous quarter, business profits were up 1.7 percent, and farm income was up 0.8 percent.
Idaho Department of Labor spokesman Bob Fick said even though Idaho saw a decline in personal income for the quarter, it fared better than most states. National personal income fell 1.2 percent for the quarter. Idaho’s small decrease was the sixth-best performance in the nation; 27 states saw total wages decline. You can read more here, including breakdowns by economic sector.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho's unemployment rate edged up in May, in part because more people are looking for work. The Idaho Department of Labor says the labor force increased by 1,100 workers in May, pushing the seasonally adjusted unemployment rate from 6.1 percent in April to 6.2 percent in May. It was the first monthly increase since June 2011. Total employment across Idaho in May was 7,300 jobs higher than May 2012, when the unemployment rate was 7.3 percent and nearly 29,000 workers received $28.6 million in unemployment benefits. Last month, nearly 13,900 idled workers received $13.3 million in jobless benefits.
Former longtime chief state economist Mike Ferguson analyzed the latest state tax revenue news – which showed revenues surging 13.2 percent over forecasts for April, the biggest tax revenue month of the year – and concluded that lawmakers likely will have $162 million more on hand when they convene their 2014 legislative session than they thought they would two months ago, at the close of this year’s session. “While the numbers will change (for example, we don’t yet know actual May and June revenue numbers, and we don’t know what revised forecast growth rate will be used for FY 2014), it is clear there will be substantially more revenue available than policymakers thought less than two months ago,” Ferguson writers. “How this additional revenue is utilized will depend on Idaho’s public policy priorities.”
The tax revenue jump is big news for the state, Ferguson writes. “This is a significant departure from the revenue forecasts the FY 2013 and FY 2014 budgets are based on, and it has significant implications for the fiscal condition Idaho’s state budget faces in those two years (and beyond).” You can read his full analysis here. Ferguson is now the director of the Idaho Center for Fiscal Policy.
StateImpact Idaho’s current series on low-wage work in Idaho, entitled “Bottom Rung,” has an eye-opening look today on how Idaho’s labor picture is changing, and it’s not an encouraging one. “The structural problem is that the nature of the economy is changing,” retired University of Idaho economist Stephen Cooke told StateImpact. “It looked as if Idaho was about to make a very nice transition to a high-skilled manufacturing sector, and then it fell apart.”
“Cooke says this is the important story, and it’s one that has unfolded gradually, obscured by the noise of Idaho’s rapid growth and deep recession,” StateImpact reports. “In the 1990s, Idaho looked poised to stake its claim to a sizable number of skilled manufacturing jobs. That stalled. Over 10 years, computer and electronic manufacturing employment in Idaho fell by 40 percent.” You can read StateImpact’s full report here.
Idaho workers’ average hourly wages were 84 percent of the national average in 2012, the Idaho Department of Labor reports, down from 85.2 percent of average in 2011. That ranked the state 45th in the nation, down from 44th in 2011. For all occupations, a new report from the U.S. Bureau of Labor Statistics showed that Boise workers made 11 percent less than the national average wage; Coeur d’Alene workers, 21 percent less; Idaho Falls, 22 percent less; Lewiston, 17 percent less; and Pocatello, 19 percent less. Pocatello was the state’s only metro area where the percentage increased from the year before. You can read a full report here from the Idaho Department of Labor.
Idaho’s general fund tax revenue in April – the biggest revenue month of the year – came in 13.2 percent ahead of forecasts, with collections surging $56.4 million above the expected level, the largest margin by far of any month this fiscal year. That puts the state $79.05 million ahead for the fiscal year, for an overall year-to-date surplus over forecasts of 3.5 percent, according to the state Division of Financial Management.
You can read the full April General Fund Revenue Report here. April marked the second month of this fiscal year in which all revenue categories beat their respective targets, with individual income tax coming in the strongest, at $35 million over the forecast. Corporate income taxes were $14.4 million ahead of forecasts for the month, while sales taxes were closest to projections, at $3.5 million over. For the fiscal year to date, Idaho has collected $2.32 billion in general fund tax revenues, well above both the $2.24 billion forecast and last year’s mark at the same time of $2.17 billion.
Idaho home prices showed the fourth-biggest gain in the nation in a national survey comparing home prices in March to those a year earlier; Idaho home prices were 14.5 percent higher. Nevada saw the largest gain at 22.2 percent; California was next at 17.2 percent, and Arizona was third at 16.8 percent. Oregon was just behind Idaho with a 14.3 percent increase.
The data, from Core Logic, a real estate data provider, showed that nationwide, home prices increased 10.5 percent, and that they've now increased for 13 straight months. Record low mortgage rates, more demand and a limited supply of homes for sale were among factors driving the increases; the number of homes for sale in March was 17 percent below that of a year earlier. Click below for a full report from the Associated Press in Washington, D.C.