JFAC accepts revenue committee’s projections

Idaho’s Joint Finance-Appropriations Committee (JFAC), which writes the state budget, accepted on Friday tax revenue recommendations the Economic Outlook and Revenue Assessment Committee (EORAC) set on Thursday. The recommended revenue target follows figures in the governor’s budget, though lawmakers will decide a final revenue number to balance the budget to at a later date.

“At some point, we’re going to debate to what we’ll budget to,” said JFAC co-chair Sen. Dean Cameron, R-Rupert. “At this stage, all we’re doing is accepting the report.”

Cameron questioned the leaders of the EORAC, Sen. John Goedde, R-Coeur d’Alene, and Rep. Cliff Bayer, R-Boise, about why the revenue target matched the governor’s. Idaho would collect almost $2.36 billion in the current fiscal year, which ends in June, and close to $2.43 billion in the next fiscal year. Last year, lawmakers set the budget for the current fiscal year based on a lower tax revenue figure, $2.29 billion.

Bayer said that while the average tax revenue projections by EORAC members for the next 18 months were $24 million lower than the governor’s recommendation, the committee felt it wasn’t a significant difference.

JFAC accepted the report on a 16-3 vote. Sen. Nicole LeFavour, D-Boise, who also served on EORAC, opposed the plan, calling the revenue targets too low. She said she’s worried that the number is below projections from the governor’s economist Derek Santos, as well as the Associated Taxpayers of Idaho, and state universities.

“It gives me a great deal of concern that the number we picked has absolutely no relation to the experts,” LeFavour said. “The process felt a little bit random to me. It seemed a little bit unusual that it ended up matching some unusual math on the part of the governor.”

Goedde said that it is better to budget to a lower revenue number. “We have found what happens when we’re overconfident in our revenue projections and it’s not good,” Goedde said. Last year, lawmakers set a revenue target below the governor and economic experts, and tax collections came in under lawmakers’ lowered bar.

Sen. Lee Heider, R-Twin Falls, said that when JFAC does set a revenue target, perhaps the committee should look at past tax revenues, which are below the growth projected by all sides.

JFAC also heard from Wayne Hammon, the governor’s budget chief, about the budgets for the governor and the Division of Financial Management (DFM), which Hammon leads. Hammon said DFM’s funding is at 1999 levels, thanks to vacancies, furlough and funding cuts, including no longer subscribing to the Wall Street Journal.

“It is lean, but we’re getting by,” Hammon said. He also said that he’s heard from many state workers that they prefer having unpaid furlough days rather than a straight salary reduction. “While nobody likes a furlough, it’s better than having a pay cut.”

Hammon also said he’s expecting the governor to appoint a new head of the Division of Human Resources (DHR) soon. Hammon currently leads DFM and DHR, with the two agencies sharing costs, including Hammon’s salary.

Rep. Marv Hagedorn, R-Meridian, questioned whether tax revenues will ever return to the highs of the past decade so that state agencies can end furloughs. “When does the time come when we recognize that maybe we need to change some statutes to meet what may be our new norm?”