Idaho tax revenue exceeded forecasts for a third year as the state’s economy slowly recovered — enough to add millions to rainy day reserve accounts, though they’re just half record levels of more than $400 million before the recession began five years ago.
Receipts for fiscal year 2013 were $2.75 billion, 3.5 percent ahead of projections and 6.3 percent more than the $2.59 billion collected in 2012.
Almost $85.4 million of the year-end balance will be deposited in Idaho’s Budget Stabilization Fund, one rainy day account drained following the Great Recession. Total state reserves now stand at about $200 million, state budget director Jani Revier said July 18 after the figures for the year ended June 30 were released.
Gov. C.L. “Butch” Otter said a third year of better-than-forecast revenue is no reason to accelerate spending. He urged lawmakers returning for the 2014 Legislature in January to remain prudent, cautious and mindful of the state’s constitutional requirement to balance the government’s budget annually.
“Don’t get the idea that we’re flush just because we ended the budget year with a few extra bucks,” Otter said in a statement.
Increased revenue over the past two years has paid for a combined $56 million in tax cuts passed by the 2012 and 2013 legislatures, with money to spare for reserve accounts.
Revenue figures still trail the record $2.9 billion collected in fiscal year 2008, however, the year before the recession hit. Since 2010, however, revenue has been rising steadily, from $2.44 billion in fiscal year 2011 and $2.59 billion last year.
The positive trend continued in June, when the state collected $279 million, $17 million more than had been forecast. That marks the fifth month since December 2012 that receipts have exceeded their forecasts.
“Our books are in good order, public funds are accounted for and have been spent in accordance with law,” State Controller Brandon D. Woolf said.
What’s driving the increases?
Every category of collections, from sales taxes on retail goods to personal and corporate income taxes, came in at levels higher than originally estimated last year. For instance, Idaho’s sales tax receipts grew 8 percent in 2013 to $1.11 billion, much faster than the 5.4 percent forecast only in January.
Chief economist Derek Santos suggested a retail economy including housing-related purchases and auto sales that’s more robust than some have feared in recent years.
“Not only have sales tax receipts increased in each year since 2010, but growth has accelerated in each year,” he said, adding stronger demand for cars, home improvements and even new construction is likely helping to drive the positive trend. “We’ve seen housing starts increase.”