Posts tagged: Idaho tax revenue
With current state tax revenues, Idaho's state budget is on track for a substantial ending balance July 1 of as much as $37 million, according to figures presented to lawmakers today by legislative budget chief Cathy Holland-Smith. That doesn't count $18.3 million in supplemental budget requests that lawmakers will consider in January, but Holland-Smith said those requests are likely to fall substantially, based on slower than expected Medicaid caseload growth and differences in prison inmate forecasting. If all $18.3 million were needed for the supplemental requests, the state would end this budget year July 1 with an $18.7 million ending balance, Holland-Smith said.
She then presented an estimate for the fiscal year 2014 budget, the year that starts July 1, including various assumptions about budget requests. If all requests were funded, state workers were given 1 percent raises, and state revenue were to grow by 4 percent, the hypothetical bottom line would be negative, to the tune of $169.5 million. That's in part because one-time money from reserve funds has been built into the state budget to help it balance each year in recent years. Idaho still would have some reserve funds available; as of June 30, 2013, the state's two main reserve funds, the Budget Stabilization Fund and the Public Education Stabilization Fund, would hold a projected total of $98.6 million.
Holland-Smith cautioned, however, that the assumptions include Idaho continuing its Catastrophic Health Care Fund program, which could go away if the state opted to expand its Medicaid program largely at federal expense. Other assumptions also could change.
Legislative Budget Director Cathy Holland-Smith prefaced her presentation to the Legislative Council with a caveat: Many of the numbers will change from what she's prepared. That's because voters rejected the “Students Come First” school reform laws, meaning state Superintendent Tom Luna's budget request for next year, which was based on those laws, will need a re-do. Plus, just last night, the state Department of Health & Welfare submitted a substantial budget revision, Holland-Smith said, one that likely will be positive. “We know caseloads are down somewhat,” she said.
Between those two factors - affecting the largest portions of Idaho's state budget - “A substantial amount of the budget request will have to change,” Holland-Smith said.
Idaho state tax revenues came in $10 million below projections in October, for a year-to-date $6.9 million below forecast, a 0.8 percent lag. After accounting for amounts the Legislature must reimburse deficiency accounts for fires, pests and hazardous material incidents, the state now looks on track to end the fiscal year with a $30.1 million balance, $25.7 million more than was anticipated when the legislative session adjourned last spring. You can read the DFM's general fund revenue report for October here, and the Legislature's General Fund Budget Monitor here; both look at the impact of the October numbers. In a few minutes, the Legislative Council will hear a state budget update from Cathy Holland-Smith, manager of budget and policy analysis.
Idaho's state tax revenues beat forecasts in September, driven by a month of strong individual income tax collections. The total revenue for the month of $248.1 million was 3.7 percent, or $8.8 million, over the forecast; individual income tax receipts, which had missed forecasts in both July and August, came in $12.5 million above the forecast for September. Sales taxes came in slightly ahead of forecasts, while corporate and miscellaneous taxes dipped below.
The strong month put the state's year-to-date revenues back on track with forecasts, running 0.5 percent ahead. That means state tax revenues overall are running 5.7 percent ahead of last year; forecasts anticipated a 5.2 percent increase. You can read the full general fund revenue report here from the state Division of Financial Management.
Idaho's state tax revenue for August came in 1.1 percent below forecasts, but 3.7 percent higher than last August, according to the state Division of Financial Management. Overall, general fund tax collections for the second month of the fiscal year were $197.6 million. Individual income tax withholding saw the biggest shortfall compared to projections, pushing down individual income tax collections for the month to 7.2 percent below the forecast. But sales taxes came in above forecast by 2.5 percent for the month, and were 15.2 percent over last August's figure. Corporate income tax, product taxes and miscellaneous revenue all beat projections. For the fiscal year to date, state tax revenues are running 1.3 percent below forecast but 4.2 percent above last year's level; you can read the latest General Fund Revenue Report here from the DFM.
Wondering where the state's finances stand? The Division of Financial Management recently revised its fiscal year 2013 General Fund revenue forecast downward by $29.6 million to $2.6077 million; add that to the state's beginning balance for fiscal year '13, which started July 1, and there's $36.1 million more available than the estimate used by the Legislature this year to set the FY 2013 original appropriation. Included in the revisions: Impacts of law changes, including a $35 million permanent tax cut for corporations and top earners.
The revised forecast is 3.2 percent above actual collections in fiscal year 2012. The state still must cover costs for fires, pests and hazardous material incidents that occurred last year, but even after that, there's an estimated ending balance for FY 2013 of $31.8 million. That's $27.3 million higher than what lawmakers expected at the close of this year's legislative session - in other words, if the forecast holds, it's a surplus.
Although July state tax revenues came in slightly below the forecast, at $3.4 million below, revenues still are tracking higher this year than last year - $10.1 million higher. The Legislature's monthly General Fund Budget Monitor report lays out the numbers; you can read it here.
Gov. Butch Otter is lauding the state's year-end financial position, saying, “I’m grateful that Idaho’s economy continues to improve and that more Idahoans are finding work.” Otter also says he doesn't consider the state's year-end excess revenue, compared to its projections, to be a surplus, since lawmakers passed legislation this year to direct any such leftovers into state rainy-day accounts, which were drained through the years of economic downturn.
“I am also pleased that we have been able to set aside almost $75.5 million for future rainy days,” Otter said. “We begin fiscal 2013 with a lot of uncertainty about the national and global economies and fiscal policies, but with a higher level of certainty and stability in Idaho’s State government. That should translate into still more opportunity for growth and future prosperity here at home.” Click below for Otter's full statement, and a Q-and-A on how the administration views the year-end revenue numbers.
Here's a news item from the Associated Press: BOISE, Idaho (AP) ― Idaho ended the 2012 fiscal year with more revenue than forecast in January, allowing the state to replenish reserves to nearly $90 million after draining the rainy day funds since the economy soured in 2008. The state said Friday it booked $2.59 billion in receipts through June, amounting to about $35 million more than anticipated. That's a 5.9 percent increase over the 2011 fiscal year. With the 2013 budget balanced, the excess has been deposited into four rainy day funds, including public education reserves that now total about $37 million. Acting state controller Brandon Woolf said in a statement accompanying the final year's revenue announcement that Idaho's fiscal house is in good order. Sales tax for the year came in at $1 billion, about 1.4 percent more than expected.
You can read the June state general fund revenue report here, from the Idaho Division of Financial Management.
Idaho's state tax revenues for May came in $3.4 million below forecast, but with just one month left to go in the fiscal year, year-to-date collections are still $33.7 million ahead of forecast. Individual income taxes were well below forecasts, but that was due to bigger than expected refund payments, and the state's Division of Financial Management said it reflects changes in historical refund patterns that have shown up throughout the year. Much of the drop in individual income tax revenue for the month was offset by a big national mortgage settlement that brought the state $13.3 million. You can read the DFM's general fund revenue report here, and the legislative budget office's budget monitor report here.
April is by far the biggest month of the year for state tax revenue collections, as taxpayers all over the state file their income tax returns during the month, so it's closely watched for signs of the health of the overall state budget. The numbers are in now, and April's collections beat the forecast, coming in a scant $500,000 above but bringing the year-to-date surplus - the amount collected over the state's forecast for the year - to just over $37 million. That's for the 2012 fiscal year, which runs through July 1. Among the drivers of the April surplus was the sales tax, which was up 6.3 percent from the same time last year; and miscellaneous taxes, which are up significantly due to strong interest earnings, a settlement with a drug company and high collections from the mine license tax. Both individual and corporate income taxes were below forecast for the month, but both remain ahead of forecasts for the fiscal year to date.
You can read the state Division of Financial Management's April revenue report here, and the Legislature's April Budget and Revenue Monitor here. This is the fifth straight month that Idaho's state tax revenues have exceeded forecasts, and lawmakers budgeted below the forecasts. State lawmakers set the current year's budget assuming just 3 percent growth in state revenues; instead, it's been more than 5.7 percent. That means a big and growing year-end surplus this year, which lawmakers have decided should go directly into the state's rainy-day fund. With the current numbers, nearly $60 million will go into the state's Budget Stabilization Fund on July 1.
March was the fourth straight month that state tax revenues came in ahead of forecast, running $3.9 million ahead, according to the latest figures. For the fiscal year to date, that puts the state $36.6 million ahead of projections. Among the strong spots: Sales taxes and individual income taxes. That brings state tax revenue growth to date for the fiscal year to 5.5 percent, well above the predicted 3.3 percent. You can read the state Division of Financial Management's monthly General Fund Revenue Report here, and the legislative budget office's General Fund Budget Monitor here.
The legislative monitor notes that that latest figures push Idaho tax revenue to $91.7 million more than last year at this time. The result, given HB 702, which passed this year and transfers any additional surpluses at the end of fiscal year 2012 into the Budget Stabilization Fund, will be larger deposits into that reserve account, up to nearly $60 million.
The Legislature's General Fund Monitor for November is out, and it puts into perspective the November state tax revenues, which came in $5.4 million below projections, making a cumulative shortfall below projections for the fiscal year to date of $16.2 million, or 1.6 percent. Lawmakers budgeted for well below the projected amounts, however. What the numbers mean: Idaho is looking at a year-end surplus of roughly $156.7 million in its general fund.
That's the difference between the ending balance lawmakers expected to have at the end of the fiscal year and the amount they're now projected to end up with, if the Legislature covered all fire, hazard and deficiency costs already incurred. It doesn't take into account supplemental budget requests for the current year that lawmakers will consider when they convene in January, but those total only about $30 million. You can see the November General Fund Monitor here.
Idaho Gov. Butch Otter is sounding a cautionary note, after November state tax revenues came in $5.4 million below projections, for a cumulative year-to-date shortfall vs. projections of $16.2 million; that's 1.6 percent below the forecast. Since lawmakers and the governor budgeted for spending well below the projected amounts, there's no shortfall, but Otter's warning that projected big budget surpluses could shrink. “The more probable scenario is for both FY 2012 and FY 2013 to continue to be years of limited growth that will require us to be very selective in the authorization of new General Fund spending,” he wrote today in a letter to members of his cabinet. You can read the monthly general fund revenue report here.
Idaho's general fund revenue report is in for September, and it's almost exactly on target, coming in very slightly over the forecasted level (about $69,400 above). That means state revenues for September of $229.1 million were on target at 9.5 percent higher than the same month the previous year. State chief economist Derek Santos reports that while sales taxes came in slightly below forecast for the month, at $91.6 million compared to a forecasted $93 million, all other categories of revenue came in ahead of forecast, including individual income tax receipts, which were $1 million ahead of forecast at $93 million. Since the fiscal year began July 1, total state tax collections are coming in very close to the forecast, lagging just 1.4 percent behind ($9.2 million). You can see all the numbers here.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho released new economic and tax revenue forecasts, but state officials say there's no telling if these numbers will weather the test of time, especially given this week's stock-market turbulence that followed a downgrade of the nation's debt rating. Thursday's forecasts includes good and bad news. For instance, tax revenue for fiscal year 2012 is now expected to be $80 million more than a previous estimate. Meanwhile, economic growth forecasts were slightly downgraded, even though Idaho's economy is still expected to expand through 2014. Given these mixed signals, Gov. C.L. “Butch” Otter's budget chief, Wayne Hammon, says there's ample reason for caution amid Wall Street turmoil and the shaky finances of European governments. Case in point: Moody's Investors Services told Hammon Wednesday the likelihood of a double-dip recession is growing.
You can read the state's new economic forecast here and the monthly general fund revenue report here, which shows that July revenues came in two-tenths of a percent below forecast, but 5.3 percent above last July's figure.
Idaho's recently retired chief economist, Mike Ferguson, asked if he feels vindicated by today's news that fiscal year 2011 tax revenues actually exceeded his much-criticized forecast – rather than running $140 million lower than the forecast, as lawmakers and Gov. Butch Otter predicted – said, “I'm certainly glad that the revenues came in stronger than the numbers the budget was based on. I guess it's essentially about the last forecast I'll probably do, and it's nice to end on a positive note that way. I guess I don't really like to go there in terms of tit for tat and vindication.”
Ferguson said throughout his quarter-century-plus career as the state's chief economist, “I never … had any pressure to modify my forecasts for political reasons. I was always able to produce the best and most honest forecasts that I could produce.” He said, “The thing that I think changed, and that is worrisome, is that the governor and the Legislature have taken to essentially rejecting the work of professional economists that are hired and paid a salary to do that work. And if it was just some kind of abstract thing, it wouldn't really matter too much, but people's lives and health are at stake, people's futures are at stake, in terms of the quality of the education system, the way that people receive services relating to health care, disabilities.”
Ferguson originally forecast $2.43 billion in state tax revenue for fiscal year 2011, but the governor and Legislature instead chose to budget to a much lower estimate of $2.29 billion. In the end, 2011 revenues came in at $2.444 billion. Now, Ferguson noted, it's happened again for fiscal year 2012. “There's no bet – it didn't get the circus effect,” he said. “But the situation is every bit as grave in terms of the consequences for public services, because the year and a half ago that my forecast was rejected, that was the first time ever that a governor had rejected the professional forecast and expressly adopted something different. And that happened again this year. So basically, there's a pattern emerging.”
Lawmakers and the governor this year budgeted based on a prediction of 3 percent growth in state revenue in 2012 over 2011, rather than the 6.9 percent state economists forecast. “Well, that yields a number for fiscal year 2012 that is actually lower than came in in actuality for fiscal year '11,” Ferguson noted, reducing forecasted revenue for next year by $91.5 million to just $2.43 billion. Adding 3 percent to the actual 2011 collections of $2.444 billion would have meant revenues of $2.517 billion for next year. “If you apply the growth rate to $2.444 billion, you get a number for fiscal year 2012 that is considerably higher than the number that the Legislature used and the governor used, and that the school cuts are based on and that the Medicaid cuts are based on,” Ferguson said. Asked if that means Idaho is poised to make painful budget cuts in the coming year that it doesn't need to make, he said, “That would be a logical conclusion.”
The latest state tax revenue figures are in, and in May, they came in $8 million below forecast; that puts the state, at a $66.1 million surplus for the fiscal year to date, down from $74.2 million a month ago. You can read the full monthly general fund revenue report here.
Here’s the chart from the state Division of Financial Management on the April state tax revenues, though, as the chart notes, it’s “incomplete preliminary data.” It shows that individual income tax in April came in $47 million below projections, and corporate income tax $11 million below, while sales taxes were $2.6 million above projections and product taxes and miscellaneous revenues were right on projections. That means an overall shortfall, compared to projections, of $55.5 million for April, due in part to higher-than-expected income tax refunds; but what that means overall for the state, compared to already-set budgets, is a $13.5 million deficit heading into the final two months of fiscal 2010. Gov. Butch Otter says he has the tools, including reserves, to make that up and doesn’t plan to call a special session of the Legislature.
Here’s a press release from Gov. Butch Otter on the preliminary April revenue report:
STATE’S APRIL REVENUE WAS BELOW PROJECTION
(BOISE) – The Idaho Division of Financial Management issued preliminary, incomplete April tax revenue data today that shows the State took in $55.5 million less than projected during the past month. The numbers will be complete and “official” on May 15. Governor C.L. “Butch” Otter was briefed on the shortfall and issued the following statement:
“Sales tax receipts were up in April. So were receipts from individual income tax withholding. That means more people are earning money and feeling better about their prospects. That’s good news, but it doesn’t make up for other tax receipts remaining well below projections. I have no doubt that our economy is headed in the right direction. However, April’s tax filings largely still reflect what was happening with the economy last year – not over these past few months of marginally improving conditions. There is a lag between private economic activity and its public benefit. We must keep working to create career-path job opportunities for more Idahoans. If we do that, the revenue will come. But for now it’s clearer than ever that we are doing the right thing by remaining prudent and cautious in our approach to using taxpayers’ money. I’m grateful that legislators recognized that and gave me the tools to balance the budget in Fiscal 2010. The Legislature deserves a lot of credit for working with me to ensure Idaho’s State government lives within the people’s means.”
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.