Try 3 months for $3

BOISE — The committee that reviews state revenues is projecting $93.2 million less to spend in 2019-2020 than the number Gov. Brad Little projected.

The Economic Outlook and Revenue Assessment Committee voted Thursday to recommend the state use a number of $3.96 billion in revenue when setting budgets for 2019-2020, which was the median of the committee members’ projections. Little had projected $4.06 billion.

The 11-4 vote was party-line, with all the Republicans present in favor and all the Democrats opposed.

Sen. Grant Burgoyne, D-Boise, had proposed accepting Little’s recommendation.

The Democrats and Republicans agreed to accept Little’s projection of $3.75 billion in total revenue for the current fiscal year, which is marked now by uncertainty due to tax changes that have meant many people haven’t withheld enough from their paychecks and will have to pay their taxes later.

The budget-setting Joint Finance-Appropriations Committee will accept the report Friday morning, although it won’t vote until February to set its own revenue targets, said Rep. Wendy Horman, R-Idaho Falls, the revenue assessment committee’s co-chairwoman and a vice chairwoman of JFAC. By then, she said, JFAC will have more revenue numbers from January, which could change things.

If JFAC members decide to accept a lower number than Little’s, the effect will be less money available to cover any new funding requests. Little is asking for a 6.7 percent increase in general fund spending.

Sen. Jeff Agenbroad, R-Nampa, said the struggles of the state’s agricultural economy could bring down revenue.

“I think it’s prudent to be fiscally conservative, certainly within reason,” he said.

Before voting, the committee heard presentations on the current revenue situation, which has been down from what was estimated mainly due to a drop in individual income tax revenue. With December numbers now available, overall general fund revenues for the first half of the fiscal year are down $101.6 million from the same time a year ago.

“I think some of that uncertainty we should carry into 2020,” said Sen. Dean Mortimer, R-Idaho Falls. “Yes, our tax rates will be stable, but we really don’t know how that will carry into 2020.”

Much of this shortfall is believed to be because many taxpayers didn’t adjust their W-4s to account for last year’s tax cut, meaning less money is being withheld from people’s paychecks and more people will end up having to pay additional taxes rather than getting a refund. Tax Commission Chairman Ken Roberts called the shortfall “a temporary cash flow phenomenon that will largely correct by the end of the fiscal year.”

Roberts also told lawmakers about another new issue — far fewer people paid their taxes in late December than had in past years. Traditionally, some people did this to take advantage of the federal State and Local Tax deduction on their income taxes; collections in the two weeks around late December/early January had fluctuated from about $60 million to $80 million from 2014 through 2016.

At the end of 2017, a glut of people filed early since it was the last year to do so before the new $10,000 cap on the deduction took effect. This boosted state collection to more than $160 million. This year, however, the state collected around $10 million in that two-week period.

Again, Roberts said he was “very confident that this is strictly a cash flow issue” and the money would come in eventually.

Subscribe to Daily Headlines

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Load comments