BOISE (AP) — Lawmakers on an economic forecasting committee working on recommendations the entire Legislature can use to set the state’s budget struggled last week with factoring in how billions of dollars in federal coronavirus relief money will influence the state’s financial picture.
Lawmakers on the Economic Outlook and Revenue Assessment Committee expressed concern that Idaho’s record budget surplus of $1.6 billion could in part be due to coronavirus relief money that will dissipate in years to come.
“I think that there is no doubt that there are federal funds that are contributing to our record revenues,” said Erin Phipps of the Legislative Services Office, part of the Legislature’s support staff. “But then there are also economic indicators that are going on in the state that would suggest that it is not just federal funds.” She noted high population growth and low employment as examples.
The committee will make recommendations that will be used by the entire Legislature to set the state’s budget for fiscal year 2023, which starts this summer.
“Probably during this session there’s going to be talk of tax cuts, which I think will be very good,” said Republican Sen. Fred Martin. “It’s relatively easy to vote for and to sell a tax cut to the Legislature and to the general public. It’s a lot harder to come back later and do possibly a tax increase, which I don’t want to vote for.”
A top House Republican in December said a $400 million tax package to include a $200 income tax cut and $200 million in one-time tax relief was being prepared for the legislative session. Republican lawmakers last year passed roughly $400 million in tax relief that Democrats said mainly benefitted the wealthy.
Lawmakers on the committee spent significant time inquiring about the state’s unemployment rate and workforce participation rate. Idaho’s unemployment rate was 2.6 percent in November, tied for fourth-best in the nation. But the state’s workforce participation rate decreased by a tenth of a percent to 62.3 percent, a new historic low. Idaho’s peak participation rate was 71.4 percent in September 1998. The labor force participation rate includes people 16 years and older working or looking for work.
Craig Shaul of the Idaho Department of Labor told them that the state had a worker shortage.
“Employers are actually trying to lure the workers they need from each other,” he said. “The competition for employers now is not just for customers, but it’s for the workers to get the job done.”
Various speakers addressing the committee attributed the low workforce participation rate to workers choosing to retire and family members, mainly women, staying home to care for children or elderly family members.
“Many of these individuals are staying home because of a lack of child care or elder care,” said Tom Kealey, director of the Idaho Department of Commerce, noting some 200 child care facilities have closed during the pandemic.
Other topics lawmakers heard included potential problems with the ongoing coronavirus pandemic and new variants, the sharp increase in housing prices, potential problems with inflation and continuing problems with the supply chain.