The state of Idaho officially closed fiscal year 2022 with a record $1.38 billion surplus, Gov. Brad Little and Idaho Financial Management Division officials said Friday.
“Idaho’s economy is burning hot because of the resilience of our citizens and businesses,” Little said in a press release issued Friday.
The governor said the surplus means the Idaho government can ‘give even more tax relief to Idahoans and make key investments where they matter’ at a time when inflation is driving up the cost of basic necessities.
The surplus was expected and is slightly higher than the most recent projections of $1.3 billion, showing the state was on course to set another state budget surplus record at the end of the year. fiscal year on June 30. The difference was due to year-end agency reversions, Idaho Division of Financial Management Administrator Alex Adams said. Although the 2022 fiscal year ended on June 30, it still takes a few weeks to complete the year-end accounting work, Adams said.
The $1.38 billion surplus topped the previous record budget surplus of $890 million, which was set a year ago when the state closed the fiscal year 2021 budget.
Idaho operates on a fiscal year calendar that runs from July 1 through June 30 each year.
“This year, we made the largest investment in public schools in state history,” Little said in the statement. “The strength of Idaho’s economy and the sound management of the state government means that we will continue to be able to invest record amounts in schools, roads, water and other areas. keys to tracking growth and improving the lives of the people we serve. ”
What will happen with Idaho’s record budget surplus?
The Idaho governor and the Idaho Legislature will decide what to do with the surplus when the 2023 legislative session meets in the Idaho state capital in January.
State agency directors are preparing the 2024 budget requests, which are due in the state on Sept. 1, and Gov. Brad Little has already set some priorities for the surplus, Adams said.
If re-elected in November, Little would push for additional tax cuts, as well as investments in public education and infrastructure projects, Adams said.
“(Little) is already saying he’s planning additional tax relief and additional investment in education and infrastructure,” Adams told the Idaho Capital Sun in June.
Little is running against Democratic candidate Stephen Heidt, Independent Ammon Bundy, Libertarian Paul Sand and Constitutional Party candidate Chantyrose Davison in the race for governor in the Nov. 8 general election.
Little and the Idaho Legislature worked together during the 2022 legislative session to use the then-record 2021 budget surplus to pass a $600 million tax cut and refund, which , according to supporters, is the largest tax cut in Idaho history on an aggregate dollar basis. They also used the 2021 surplus to pay down public building debt, invest in infrastructure projects, increase teachers‘ salaries and benefits for educators, and increase funding for Little’s literacy initiative, which gives schools the option to pay for voluntary full-time kindergarten.
How State Revenue in Idaho Has Grown Over the Last Three Years
All surplus money is in state dollars. Adams said federal stimulus checks and relief programs likely contributed to the surplus. For example, Idahoans who received stimulus checks or loans may have used that money to buy more goods or new cars, which would increase Idaho sales tax revenue that fueled the state budget surplus.
“The big question is how much is sustainable?” said Adams.
In Idaho, the three main sources of revenue are personal income tax, sales tax, and corporate income tax. All three taxes beat revenue projects for the year.
Overall, state revenues have grown rapidly for Idaho, which is one of the fastest growing states in the nation, according to the US Census Bureau.
For fiscal year 2020, Idaho brought in $4 billion in revenue to the state.
For fiscal year 2021, Idaho brought in $5 billion in state revenue, which was a record at the time.
For fiscal year 2022, Idaho brought in $6 billion in revenue to the state, setting the new record.
Even though Idaho is sitting on another record surplus, at least one prominent Idaho lawmaker views much of the money as a one-time windfall and urges caution when it comes to spending decisions.
Rep. Wendy Horman, R-Idaho Falls, said she would consider investing the money in tax cuts for Idaho families and programs that will help reduce expenses for residents of the Idaho.
“The question is, how do you balance the needs of the state with the needs of Idaho families to keep their own dollars to use during these times of inflation?” Horman said. “I think we definitely need to limit spending at the state level and do whatever we can to reduce costs, starting with the cost of a college education and going through food and fuel and all the necessities. expenses that families incur.”
Adams and Horman told the Idaho Capital Sun that they are concerned about the rising cost of inflation and the possibility of an economic recession beginning within the next two years, which they say are reasons to be careful with the surplus.