The new tax revenue projection for Idaho’s general fund dropped by $63 million, but remains $79 million over the target state lawmakers used to balance the budget earlier this year.
Idaho chief economist Mike Ferguson now forecasts the state general fund taking in almost $2.37 billion in the current fiscal year, which started in July. His last forecast in December was $63 million higher.
It’s unclear how the new forecast will affect state spending. “We’ve got to be very cautious with how we’re going to budget,” said Jon Hanian, the spokesman for Gov. Butch Otter. He said the continued drop in Ferguson’s forecasts gives credence to the decision by the governor and Republican lawmakers to set a low budget target, at $2.29 billion. “Clearly, the revenues have not met projections. They continue to not meet projections.”
Last year, the governor issued a holdback to state agencies after the state released a new revenue forecast. Hanian wouldn’t comment on such budgeting decisions for the current year, but repeatedly used the word “cautious” to describe the governor’s approach.
Tax revenues exceeded the new forecast for July, the first month of the fiscal year, by $4.5 million. The sales tax and the personal and corporate income tax were all above expectations.
Ferguson said Idaho’s economy should improve slightly. “Idaho’s economy should be more prosperous over the next two years than it was in the last two,” he wrote in his monthly report, Idaho Outlook. He added that the economic recovery will be modest. Ferguson said the decline in the housing sector is one of the reasons for the state’s poor performance during the past three years.
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