The strongest monthly paycheck withholding in nearly three years pushed state revenue collections more than 7 percent above the target for November to more than double the cash surplus.
The Division of Financial Management on Wednesday said November tax receipts were $6.8 million higher than expected. Paycheck withholding, a key indicator of Idaho’s underlying economic strength, was responsible for $4.1 million of that.
The infusion of cash built a surplus of $12.3 million, more than economists expected the state to amass five months into its budget year.
The last time withholding collections were so strong was in January 1995 when they exceeded the monthly target by $4.8 million.
November’s performance underscored the latest administration forecast for stronger than previously expected economic activity during the next two years.
It also propelled overall revenue growth 6.6 percent ahead of the first five months of the 1996-1997 budget year. Gov. Phil Batt and state lawmakers based the 1997-1998 spending plan on a 4.9 percent growth rate.
Any surplus tax collections this year would come on top of a $13 million surplus at the end of the last budget year in June and another $10 million conservative lawmakers declined to spend from existing revenue.
Withholding is a major component of the individual income tax, which accounts for nearly half of all general tax revenues, and until this summer it had been consistently falling short of the monthly benchmarks for two years.
Sales tax receipts, which reflect consumer confidence, were $1.1 million higher than expected for the month, giving analysts some leeway in achieving the predicted 4.5 percent growth rate for that revenue source.
But it was only the third month in the last 14 that sales tax collections have exceeded the target, and Batt administration chief economist Michael Ferguson cautioned that retailers are indicating disappointing sales in December.