The Idaho Board of Examiners, composed of three statewide elected officials, met in an emergency session Thursday to add money into a state account that pays out tax refunds on income tax returns. The Tax Refund Account is currently empty. It’s usually filled up by 20 percent of all the incomes taxes paid, but Gov. Butch Otter and other state leaders agreed to move $30 million from the general fund to the refund account.
“We’re now at a point where taxpayers who are seeking a refund will not be paid,” said Wayne Hammon, administrator for the Department of Financial Management.
“This is an extraordinary event for us,” Otter said. “I don’t remember calling one of these emergencies before.” He added that last year, the Board of Examiners shifted $20 million into the fund. That shift didn’t require an emergency meeting.
The State Tax Commission, which processes tax filings and returns, will need $45 million in cash flow through April. Chief financial officer Mark Poppler said a $30 million transfer will work.
“We think that with $30 million, that will alleviate most of the problem,” Poppler said. “We can deal with the other shortfalls by slowing things down further.” With that slowdown, getting a state tax refund on electronically filed returns could take 12 days instead of 10. The wait would be longer for those filing by paper and first-time filers in Idaho, who could have to wait up to eight weeks for their refund check, instead of three. “I’m sure with $30 million, the fund is going to be close to zero many times over the next couple of months, until April when they all come in,” Poppler said.
Any extra money from the account for tax refunds exceeding $1.5 million would be swept back into the general fund when the fiscal year ends on June 30. After last year’s $20 million transfer, $13 million was swept back into the general fund. State income tax dollars are the largest source of revenue for the general fund, which pays for public schools, health services, public safety, and other programs.
Toward the end of the meeting, Otter exchanged lighthearted words with Poppler and State Controller Donna Jones. Otter said he wanted to be kept informed of the money in the tax account for refunds, and if more money would be needed. “Yeah, a little more timely notice on this would be good,” he said.
“It’s embarrassing to bounce checks,” Jones said. As the controller, she writes many state checks and tracks state accounts.
“We wouldn’t want Donna to go to jail,” Otter said.
Otter, Secretary of State Ben Ysursa, and Attorney General Lawrence Wasden serve on the Idaho Board of Examiners. Jones is the non-voting secretary for the board.
You can hear audio of the emergency meeting of the Board of Examiners here.
[...] approved shifting the money to pay out tax refunds Thursday will no debate during a meeting. The board approved a similar $30 million transfer on March 4. Members of the board say the two transfers are a cash flow issue and not a good indicator of [...]
[...] has put a stopgap in place to prevent delays of its refunds. The state took emergency steps earlier this month to shore up its refund account, which had run dry after it paid early filers their refunds. The [...]