Idaho’s year-end tax revenue tally is in, and it shows state tax receipts fell short of forecasts by just under half a percentage point, the first year-end shortfall since 2010. That’s a $15.7 million shortfall; total general fund revenues for the just-concluded fiscal year were $3.7503 billion.
The shortfall came in individual income tax collections, which were $112.7 million, or 6.4 percent, short of forecasts. It was partly offset by a $60 million surplus in corporate income tax receipts; a $22.1 million surplus in sales tax collections; and miscellaneous revenue collections that topped forecasts by $15.4 million.
Derek Santos, Gov. Brad Little’s chief economist, wrote in the monthly General Fund Revenue Report that the state experienced shortfalls in individual income tax withholding collections throughout the year, as taxpayers were slow in changing their withholding under changes in both state and federal tax laws. “These shortfalls were expected to be offset by higher filing payments and lower refunds by the end of the fiscal year,” Santos wrote. “They were not.”
Filing payments came in $65 million below the expected amount. But refunds also were lower than predicted.
Corporate income tax collections set a new record at $283.2 million for the year, despite a substantial reduction in the corporate income tax rate. You can read the full General Fund Revenue Report here.
Gov. Brad Little sent out a guest opinion today lauding the state's budgeting as "fiscal conservatism in action," and noting that despite the small year-end revenue shortfall, the state ended the fiscal year with a cash balance of more than $100 million. That's because state lawmakers set the budget at a figure below the anticipated revenue amount. Here is Little's full article:
Idaho’s balanced budget represents good government, and it’s what our citizens expect
By Governor Brad Little
Four simple budgeting concepts guide governing in Idaho:
Don’t spend more money than you bring in.
Save some money as preparation for a potential downturn.
Make investments where they matter.
Take steps to put budget surpluses back into taxpayers’ pockets.
We just closed the books on the State of Idaho budget for Fiscal Year 2019. We not only stuck to the budget and paid for all our planned expenses, but we ended with a cash balance exceeding $100 million.
In addition, the balance in Idaho’s major rainy-day funds – the emergency funds that help us weather economic downturns without having to raise taxes to maintain essential government services – is more than $530 million.
Looking ahead, the Idaho Legislature closely followed the Fiscal Year 2020 budget I proposed, and we are projecting an estimated cash balance of $174 million at fiscal year-end next year.
As other states and the federal government struggle to wrangle spending, I can assure Idahoans that our finances here are sound. Data from the National Association of State Budget Officers ranks Idaho sixth in the nation for the size of our total balances, including the fiscal year-end balance and rainy-day funds.
The executive and legislative branches work together in Idaho to limit government growth and invest your tax dollars where they can make the greatest positive impact on citizens, especially our children, such as increasing starting teacher salaries to recruit young people into the profession and incentivize them to stay in their careers. We achieved that earlier this year, and the changes began to take effect this month.
In 2018, the Idaho Legislature passed the biggest income tax cut in state history. Since then, corporate taxes spiked $59 million above forecast, a sign of increased business activity. Sales taxes swelled $22 million above forecast, largely a result of increased personal spending. Tax cuts spur economic activity.
I am committed to continuing to work with legislators to put budget surpluses – your hard-earned tax dollars – back into your pockets by eventually eliminating the grocery tax once and for all.
This is fiscal conservatism in action, folks, and I believe it is a main driver why Idaho consistently ranks as one of the top states for job growth, economic momentum, low unemployment, and personal income growth. I believe people and businesses are choosing to relocate or expand to Idaho because we responsibly manage public dollars.
Citizen confidence in state government is a high priority of mine. Idahoans expect accountable, functional government that respects their hard-earned money. To meet that expectation, I will continue to lead with a focus on administering the state’s laws and providing services as efficiently as possible.