BOISE — Idaho’s state tax revenues for May came in ahead of forecasts, but individual income taxes once again fell short — as they have every month of the fiscal year that started last July 1.
The state Division of Financial Management reported Friday that overall state tax revenues in May were 7.7%, or $17.6 million, over forecasts, and 12.8% higher than the previous May.
The strong collections were largely due to much higher than expected corporate income tax collections, which were $3 million above forecast for the month and now are $49.5 million over forecast levels for the fiscal year to date, a 25.2% year-to-date difference; and sales tax collections, which have exceeded forecasts in all but three months of the fiscal year and are now 1.1% ahead of forecasts for the year to date.
Individual income tax collections for May fell short by $1.5 million, the smallest shortfall of the year thus far. For the fiscal year to date, individual income tax receipts are off by $93 million from state forecasts.
May’s $17.6 million surplus over the forecast level helps reduce the state’s fiscal year-to-date deficit, which was at $75.8 million in March, dropped by $36.1 million in April, and now is down to $22.1 million. Overall, tax revenues are coming in 0.7% below forecast for the year to date.
State officials had theorized that the year-long shortfalls in individual income tax collections were due to taxpayers’ failure to update their withholding after major changes in federal and state tax laws, and that the money would come in with April’s tax return filings. Part of it did, but not all.
Idaho sets its state budget based on forecasted revenue, but also leaves substantial amounts in reserves. Among other factors that are boosting the state’s bottom line as it approaches the close of the fiscal year is HB 281, legislation that was signed into law in April — with an emergency clause making it effective immediately — making a number of year-end transfers of state funds aimed at covering shortfalls. The largest one directed the state controller to transfer $9 million immediately from the Consumer Protection Fund to the state general fund before the start of the new fiscal year on July 1. The bill passed both houses overwhelmingly.
According to the May Budget Monitor from the Legislative Budget Office, the latest revenue news brings the state general fund’s estimated ending balance on June 30 to $90.7 million, which is $31.1 million less than anticipated when this year’s legislative session adjourned in April.