Bonuses likely for state workers
BOISE – Idaho’s top economist says teachers and public employees can count on a 1 percent bonus next year after April tax collections hit a record, pushing the state’s revenue well above the threshold that lawmakers required for the bonus to go through.
Tax collections for fiscal year 2005 are now $88 million above projections, said Mike Ferguson, chief economist for Gov. Dirk Kempthorne.
Bonuses are triggered if the figure is at least $22.3 million over projections when the state’s fiscal year ends June 30.
In all, the state has collected $1.92 billion in taxes since last July.
The collections provide further evidence that Idaho has recovered from a post-Sept. 11 slump that forced layoffs at major employers and caused state lawmakers to slash the budget and boost Idaho’s sales tax by a full cent on the dollar in 2003, said DuWayne Hammond, chairman of the Idaho Tax Commission.
Ferguson said even though there are two months of collections to go, there’d have to be a disaster for educators and state employees to miss the bonus.
“It’s safe to say that the 1 percent increase will be triggered at year-end,” Ferguson said Wednesday. “I’m feeling pretty confident.”
Hammond said the $457 million collected in April was a record for the month, beating the previous high of $415 million in 2001. Even more significant, Hammond said, is that receipts hit a high even as income tax rates for individuals and businesses dropped.
Tax rates have been cut to 7.8 percent from 8.1 percent for individuals and to 7.6 percent from 8 percent for businesses.
“If you can match the prior record volume with lower unit rates, you know you’re getting increased levels of profitability and taxable income,” Hammond said. “That implies to me fundamental broad-based strength.”
All three of Idaho’s major revenue sources — individual income tax, corporate income tax, and sales tax — performed substantially better than expectations during April, according to preliminary figures released by the Idaho Division of Financial Management.
Combined, the three revenue sources were $61.5 million above what was predicted for the month, which coincides with the tax-filing deadline and is almost always the state’s strongest for revenue.
“Although these are preliminary numbers, they are nothing short of spectacular,” Kempthorne said. “There is no question that this is the strongest sign to date of a recovering economy. These numbers certainly brighten Idaho’s budget picture.”
Teachers, meanwhile, said they are ambivalent about the rise in tax revenue and their resulting bonus. Officials with the Idaho Education Association, the largest teacher’s union, call it not enough.
“The fact that they may hit that mark is certainly better than a stick in the eye,” said Kathy Phelan, the union president. “I’m sure they (teachers) will be happy to get that little bit that the 1 percent bonus gives them.”