The state of Idaho closed the books on the 2021 budget year on June 30 with a record surplus of nearly $900 million on hand, Gov. Brad Little announced Tuesday.
Now that June revenue numbers are finalized — and again beat state forecasts — Idaho officials know that they closed out the 2021 fiscal year with a surplus of about $893.4 million. That’s even better than things looked just over a month ago, when state officials were expecting a surplus of about $809 million 11 months into the fiscal year (Idaho runs on a fiscal year, or budget year, that runs from July 1 to June 30).
Overall, the state set several budget and revenue records during the just-completed fiscal year.
For the first time in Idaho history, state revenues surpassed $5 billion in one fiscal year, setting a new record in terms of dollars.
Compared to the previous years, revenue grew by 24.2%. That represents the largest increase in revenue for any year that records are available, Little’s office said.
The month of May was the largest revenue month in state history, as revenues beat the forecast by $580 million.
What’s the reason for the giant surplus? In simplest terms, revenues are up and greatly outperformed the state forecasts. Income tax filings beat forecasts by $469 million and sales tax revenues were up $166 million over projections.
“Idaho’s economic numbers show even in the middle of a global pandemic, conservative governing works,” Little said in a press release. “We have worked hard to curb government spending while providing tax relief and making investments where they count. We are seeing the impact of those conservative principles in action.”
What does the surplus mean for Idaho?
The surplus means Idaho will have extra money available for one-time spending on projects that may not have been anticipated a year ago. But many of the proposals and decisions won’t come until the 2022 legislative session begins in January.
In late June, Idaho Division of Financial Management administrator Alex Adams told the Idaho Capital Sun that Little would work with legislators over the upcoming months to develop proposals for the surplus.
Little and Adams didn’t spoil any secrets, but they have hinted that some of the money is likely to be returned via tax cuts and some will likely be invested in Idaho’s K-12 public school system, along with other one-time capital and infrastructure projects.
“It means we are in a good position; it means we have the ability to do some substantial investments we wouldn’t do otherwise,” Adams said in a June 25 interview. “But we have to be pretty careful about not outdriving our headlights with the ongoing portion and not make bad long-term decisions with good short-term news.”
But at least one Democratic state senator says the surplus isn’t quite the good news that it appears because the Legislature failed to cut property taxes or invest in full-day kindergarten during the marathon 2021 legislative session. Sen. Grant Burgoyne, D-Boise, said in a June 30 statement that the state should have invented in child care, cut property taxes by 33%, raised the minimum wage and set aside money to help employers cover a portion of the cost and paid for full-day kindergarten (whereas currently the state only funds half-day kindergarten, which is optional for families).
“Never has a legislature taken so long to do so little, and to do so much harm to the people of this state,” Burgoyne said in a written statement.
Although specifics may not be coming until early 2022, in the meantime, state budget officials will release a new revenue forecast in August. State agencies and departments will submit their proposed budgets for the 2023 budget year by Sept. 1.