State officials are painting a fairly rosy economic picture in Idaho to lawmakers returning for the upcoming session, despite the state collecting less tax revenue than expected.
Unemployment is low – 2.9% in November – and while the median wage in Idaho is near the bottom of all states in the U.S. at $34,260 in 2018, state economists say that figure continues to grow.
But tax receipts dropped by $130 million since last January’s projections, prompting Gov. Brad Little (R) to tell most state agencies they must immediately cut spending in the current fiscal year by 1% and prepare budget proposals with a built-in 2% cut. That’s because state officials overestimated just how much revenue they’d take in after implementing significant tax code changes on top of a tax cut.
Keith Bybee is the lead analyst who watches Idaho’s revenue. He said growing budgets have also chipped away at what had become significant budget surpluses every year.
“It’s something that we’re kind of watching pretty closely and it will kind of set the tone for this legislative session,” Bybee said.
Last year’s surplus totaled $45.6 million – about a quarter of what had been the average over the last four years.
While economists have questioned the longevity of what is now the longest period of economic expansion on record, Idaho Chief Economist Derek Santos said the possibility of an upcoming U.S. recession is about 35%, based on an analysis conducted by a national research firm. Santos said it's not very likely Idaho would feel much of that, even if a recession did hit.
A legislative committee will finalize its revenue estimate next week after Gov. Little presents his proposed budget on Monday.
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