BOISE — Idaho’s state tax revenue for August blew past predictions for the second consecutive month, state budget officials said Sept. 8.
Idaho’s state tax revenues came in $37 million, or 13 percent, over forecasts, and the state is looking at a potential $500 million in surplus tax revenue for the fiscal year that started in July.
Republican Gov. Brad Little told The Associated Press the latest numbers bode well for his plan to reopen the economy while handling the continued impact of the coronavirus pandemic. But he said he’s viewing the latest budget numbers cautiously.
“We’re budgeting in a time of great uncertainty,” he said. “One or two months does not make a long-term trend, but it’s darn better than having to go the other way.”
He attributed some of the good numbers to conservative budgeting and cuts to regulations.
Idaho’s unemployment has dropped to 5 percent after reaching nearly 12 percent earlier this year, though 45,000 workers remain unemployed. Under Little’s reopening plan, nearly all businesses can now reopen, excluding large venues where the virus could spread easily.
The August tax revenue beat predictions that were set even before the severity of the pandemic in Idaho became apparent.
About the time the Legislature was wrapping up work on the budget in late March, Little issued a stay-at-home order that lasted to April 30, and thousands of people lost their jobs. Virus concerns and a potential budget shortfall led to a nearly $100 million cut to state agencies and another nearly $100 million cut to public schools.
Budget analysts have said that Idaho’s economy was likely cushioned by federal pandemic relief money. The $2.2 trillion emergency relief package approved by Congress and signed by President Donald Trump in late March sent $1.25 billion to Idaho and included one-time payments to individuals of up to $1,200.
“People working paycheck to paycheck got a pretty good flush of cash, and that may have been what showed up in the sales tax,” Little said. Sales tax came in at nearly $11 million, or 7 percent, above expectations for August.
Federal money also provided enhanced weekly unemployment benefits. Those benefits have ended, but Little opted into a Trump plan that retroactively provided $400 in monthly benefits.
Congress hasn’t approved a second relief package. Little also said the approaching flu season and the starting up of school could increase virus infections and slow things down, possibly even forcing areas of the state to increase restrictions.
Through Monday, there were nearly 34,000 virus infections and 385 deaths in the state, according to data from Johns Hopkins University.
Little, who wears a mask in public, has been trying to balance keeping the economy going while limiting the virus’ spread so that people feel safe returning to the marketplace.
“I obviously would like to have no one the coronavirus,” he said. “The whole concept is to make sure that we keep our infection rate below our healthcare capacity.”
He was optimistic some of his priorities involving education, such as teacher pay and literacy, could return as key goals when the Legislature meets in January.
“I look to a very happy legislative session where we’re not making the tough cuts all these other states are doing,” he said.
Budget writers last winter predicted Idaho would have about $282 million in tax revenue for August, but it instead came in at about $319 million.
Individual income tax led the way with $22.5 million more than expected, a 19 percent increase over predictions.
Idaho is among the country’s fastest growing states in terms of population growth. Little said that new money is undoubtedly providing an economic boost to the state by people drawn to what is ranked as among the best state economies in the nation.
Still, Little said, “I’m not exactly flying the flag real high about anyone from anywhere coming to Idaho.”
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Concerned about COVID-19?
Sign up now to get the most recent coronavirus headlines and other important local and national news sent to your email inbox daily.