Idaho’s surprising surge in tax revenue the past two months stands in stark contrast to most of the country where the coronavirus pandemic has torn state budgets to shreds.
The latest numbers released by the Idaho Department of Financial Management show total revenue up by $69.1 million, or 10.4% above predictions. The vast majority of this cash comes from the personal income and sales taxes.
Two months of strong revenue doesn’t necessarily make a trend, Gov. Brad Little told the Associated Press. “But it’s darn better than having to go the other way.”
Cautious optimism aside, Idaho is one of a handful of states that appears to be well-positioned in its recovery across the country.
According to the National Conference of State Legislatures, Idaho is one of four states reporting a less than 5% hit to their revenue projections made prior to the pandemic. Some, like California and Wyoming, have projected upwards of 20% drops in revenue for fiscal year 2021.
Several states were not included in the survey and revenue assumptions vary from state to state.
It also bucks trends of past downturns, like the Great Recession in 2008.
“We still had states making significant [budget] cuts in 2010, 2011,” said Brian Sigritz, Director of State Fiscal Studies at the National Association of State Budget Officers.
Sigritz said it’s too early to tell if revenues will continue to beat projections in Idaho, or even if they were artificially buoyed by federal money, like enhanced unemployment payments.
“If there isn’t another aid package, if some of these temporary stimulus measures don’t get renewed, if the economy doesn’t recover more, that’ll impact state revenues going forward,” he said.
These revenues also don’t necessarily take into account potential drops in fees collected by states, like gas taxes, which often pay for road maintenance and other infrastructure projects.
An Idaho Transportation Department spokesman told the Idaho Statesman last week that he wasn’t aware of any changes to the agency’s construction plans, or what the long-term implications of the pandemic might bring.
Sigritz said we’ll have to wait until next spring when personal income taxes are filed to get a clear picture of how state budgets will fare going forward.
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