(Idaho) Tax revenue falls more than expected

The Idaho Statesman ^ | 06-28-2002

[The Iceman Cometh]

Personal income tax collections slipped more than expected in May, and weak financial markets eroded earnings on invested state money, aggravating Idaho´s already bleak financial picture.

The Division of Financial Management reported on Thursday that actual tax receipts last month were $5.6 million below the target, $2 million more than the initial estimate indicated three weeks ago.

That estimate did not consider interest earnings, and it anticipated personal income tax would come in only about $2.7 million short when it was actually $3.6 million below the benchmark. Personal income tax revenue has been at the heart of the state´s economic problems for well more than a year.

The further slippage could be just the first crack in Gov. Dirk Kempthorne´s budget-balancing plan that is intended to head off additional budget cuts and stifle talk of higher taxes through the fall.

It anticipates revenue falling $121 million short of the estimate for the current fiscal year, including $18 million in June. But through May, tax collections are already $106 million off.

In addition, the plan to cover the growing gap between revenue and expenses with the last $110 million the state has in various special accounts, including the tobacco settlement trust, anticipates revenue growth in the coming budget year at 3.9 percent. A number of experts have suggested that is overly optimistic, and Kempthorne conceded he was betting the future on a rapid, robust economic recovery that no economists have predicted.

Without that kind of recovery, severe financial decisions will have to be made, Kempthorne has said, indicating his preference would be for deeper cuts in spending rather than increasing revenue.

Senate Finance Chairman Dean Cameron of Rupert, who has his own qualms about the viability of the budget-balancing strategy, has said tax collections will have to continue faltering into the fall before any options are looked at seriously.

[The Iceman Cometh]

Getting ugly up in little Idaho as well.

Good thing the tobacco settlement monies are going to 'recoup' for lost monies paid due to smokers....

[Digger]

Then start cutting. However, it is harder for states to operate because unlike our goverment they can not print more money.

[GailA]

BUT, BUT an income tax is ELASTIC we've been told that repeatedly in Tennessee so they can replace our sales tax based revenue with an 6% income tax.

[niki]

bump

[Billy_bob_bob]

I was going to move to Idaho, right up until the moment when I saw their income tax rates. I now live in the hills around Spokane, in eastern Washington state, a state that has no income tax.

Yes, we have a fairly high sales tax here, but I'm much happier paying a sales tax than an income tax. Besides, in California the sales tax was just as high as it is here, and there was a %10 income tax to boot!

If Idaho wants to attract a whole bunch of productive, capable people, perhaps they should consider getting rid of their income tax. Of course, that won't happen in a million years, but it's nice to think about.

[aimhigh]

This is what happens when the tax system focuses on the rich. Their incomes fluctuate widely.

[The Iceman Cometh]

I was going to move to Idaho

At least we are a very conservative state. The liberal mentality has not sickened our tribe yet.