Idaho ended its 2020 fiscal year with a higher-than-expected surplus, bolstered larger by higher-than-anticipated individual income tax collections and lower refunds.
While state officials are still making plans for some budget cuts in anticipation of a revenue hit when people pay taxes on their likely lower 2020 incomes, state officials expect Idaho will be a stronger position than others that expect far bigger budgets hit due to coronavirus-related revenue drops.
"I guess, in the grand sense, this was the best outcome we could hope for," said Alex Adams, administrator of the Division of Financial Management. "We're ending the year not just with (meeting projections) but with a surplus."
The fiscal year ended on June 30, and Idaho closed the books with $4.03 billion in revenue, almost 2% or $70.7 million more than the predicted $3.96 billion. Corporate income tax revenue for the year was almost 14% lower than expected, at $243.3 million instead of $281.8 million, and sales tax revenue was down a little less than 1%, coming in at about $1.69 billion.
However, individual income tax collections came in at $1.9 billion, almost 7% higher than the $1.78 billion projected. Much of this was because the state gave out $104 million less in refunds than had been anticipated. A DFM report says some of this may be due to changes in the tax tables caused by the 2017 tax cut, although it also says more refunds may be issued in the coming months than otherwise would have been since the state extended the filing deadline to mid-June due to the coronavirus pandemic.
Income tax collections this year were based on income people earned in 2019, which was before the downtown that accompanied coronavirus means, Adams said, he expects a hit next year when people are paying taxes based on this year’s income.
"We know there's going to be an impact on income tax filings in calendar year 2020," Adams said.
Boise State Public Radio reported last week that Gov. Brad Little has asked state agency heads to submit plans by Wednesday cutting 5% from their budgets for the 2021 fiscal year, which started July 1 and runs until June 30, 2021. Adams said this plan is still moving forward despite revenues coming in at higher than expected since he expects to see the revenue hit from coronavirus to play out this fiscal year. Adams contrasted the situation in Idaho with other states that expect far greater revenue shortfalls and budget cuts, and said the extra revenue will help "mitigate the depths of the cuts."
"We're looking at 5% because of positive news like this," he said.