Idaho’s continued drop in tax collections has the state facing a projected budget deficit – and a looming constitutional problem.
Unlike the federal government, Idaho cannot legally end the year in the red. Current projections show a $56.6 dollar deficit for the current fiscal year, as first reported by the Idaho Capital Sun.
Total estimated revenue compared to April when the legislature gaveled out is down $496.4 million.
September’s revenue report blamed much of this month’s problems on both personal and corporate income tax collections.
“[Personal income tax withholding collections] came in 15% less than the comparable month last fiscal year. This is in contrast with employment indications, which have shown a stable unemployment rate,” the Division of Financial Management reported.
Estimated payments from corporations also continue to lag behind expectations, as does nearly every other revenue category.
Gov. Brad Little and Republican leaders slashed taxes by $450 million earlier this year.
Little ordered state agencies to cut their budgets by 3% last month and asked lawmakers to make those cuts permanent in future years after revenue kept falling.
“There’s a lot of us that knew that this was going to be the case and it just wasn’t quite enough of us to stop the train from running off the tracks,” said Sen. Janie Ward-Engelking (D-Boise), who sits on the budget writing Joint Finance and Appropriations Committee.
She said she doesn’t think reversing those tax cuts is feasible, but repealing a controversial $50 million private school subsidy program might be.
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