Gov. Brad Little is preparing a proposal for the Legislature that uses a projected record-setting budget surplus to make investments in education, cut taxes and take on infrastructure projects.
State revenues beat forecasts again in November, coming in $44.5 million over budget, the Division of Financial Management and Legislative Services Office announced this week.
That means that if nothing else changes in the budget and revenues meet their forecasts for the rest of the budget year, the state would have a $602.8 million cash balance on June 30.
Little began teasing out his surplus proposals this week.
“We’re going to have to put more into education,” Little said Tuesday during an AARP Idaho-sponsored telephone town hall.
“These kids have had the incredible curveball thrown at them,” Little continued. “They’re behind because they were out of school last spring and they’re in and out now. We’re going to invest in education.”
Back in May, Little announced 5 percent holdbacks proactively for the FY 2021 budget out of concern that state revenue would decrease due to the coronavirus pandemic. For K-12, the holdbacks reduced funding by $99 million compared to the original budget the Legislature approved.
The state did reduce funding for schools in the Aug. 15 and Nov. 15 payments, Division of Financial Management Administrator Alex Adams said.
It’s unclear at this point how Little would divide up the surplus or how great of an investment will be sent to public schools. Little has always said he would need to work with the Legislature to make the holdbacks official and then address the surplus.
Legislators have already started to consider what to do about the budget, and several are urging the state to play it safe with a one-time surplus. Little agreed that he can’t make ongoing funding commitments with a one-time surplus.
“It’s not going to be a great big tax decrease,” Little said Tuesday. “What I am proposing is that we take, particularly, the one-time part of the surplus and put it into one-time investments.”
Idaho’s revenues aren’t just beating a conservative forecast, they are up compared to last year, too. Compared to the same time period last year, individual incomes tax collections are up $161 million, sales tax collections are up $87 million and corporate income tax collections are up by almost $15 million.
Now, Little is talking about returning some of that money and investing some.
“Our surplus is record, and there is plenty of room in there to do tax cuts, along with some of these other investments ,” Little said.