Talk about Idaho’s version of “Groundhog Day,” the movie where Bill Murray reawakes to endlessly repeating the same day.
The ink wasn’t even dry on Idaho’s improving tax receipts earlier this month before Gov. Brad Little and lawmakers started talking about tax cuts.
This is part of a sorry pattern in the Gem State.
When the economy stalls, governors and lawmakers hack away at budgets. Later, they happily discover they cut too deeply. So when the money starts flowing in, they declare a surplus. Rather than restore programs, they say the money belongs to the taxpayers.
This systematic hollowing out of public resources is how Idaho wound up with the lowest per-pupil public school expenditures in the country while homeowners are forced to compensate with record-setting supplemental property taxes.
It’s why students attending Idaho’s struggling institutions of higher learning wound up paying so much more in tuition.
And it explains why Idaho is having difficulty paying a competitive wage to school teachers and many of its public employees.
Here’s how it could happen again. As the economy sank under the weight of COVID-19, state coffers suffered and spending was slashed. Now that the economy is recovering, so have tax revenues.
Consider the legislative budget office’s analysis of the $587 million surplus:
l Subtract the $98.7 million hole in the public school budget. Although federal coronavirus relief funds came to the rescue this year, that money was available only once. For K-12 to fully recover, next year’s Legislature must restore that money on a permanent basis, to say nothing of meeting the costs of rising enrollments and inflation for the school year that follows.
l Then there’s the $96.5 million still missing from the rest of Idaho’s general fund, which covers everything from higher education to public safety to health. Colleges and universities alone are in a precarious spot. Their bare-bones budgets were tied to a tuition freeze before the cuts were imposed. Since then, enrollments — and tuition dollars — have slipped due to the pandemic.
l A good deal of this money is available for one time use. That includes $186.3 million in a cash balance plus another $60.3 million in Medicaid savings that emerged when the bookkeeping was completed. Invest this money in a permanent tax cut and you’ve created a budget deficit that will continue year after year.
l All of which leaves about $102.6 million in new tax collections. That includes a 4.4 percent spike in sales tax collections, which can be traced to the federal stimulus dollars spread throughout Idaho’s economy. Less easily explained is the 17.1 percent increase in income tax collections and a 2.7 percent rise in corporate taxes.
The picture may become clearer as more collections flow into the state coffers during the end of the year and possibly early into 2021. But even if you throw in the new sales tax collections from internet transactions, the state would have to stretch to meet the cost of eliminating the sales tax on groceries, which comes in at about $200 million.
Where would the money come from to cover investments in veteran teacher pay, shore up the state’s institutions of higher learning or tend to an ever-rising number of people held in Idaho’s overcrowded prison system?
Before you cast your ballot, take this up with the people who want to serve in Idaho’s Legislature. — M.T.