Idaho State Employees: Don’t Spend Your Raise Yet

By Sharon Fisher, 2-07-08

Lower than expected January revenue numbers may make Governor Butch Otter’s planned 5% raise for state employees and teachers difficult to maintain, but it remains the Governor’s top priority in the budget, said Division of Financial Management Administrator Wayne Hammon.

Final figures won’t be in for another week, but thus far it appears that individual income tax figures are $28.9 million lower than expected, corporate income tax figures are $3.5 million lower than expected, and sales tax figures are $6.8 million lower than expected, for a total drop in revenue for January (with some other smaller items) of $39.5 million, or almost 13%.

Joint Finance-Appropriations Committee Chair Senator Dean Cameron, R-Rupert, said “We’re not raising the panic flag, or a red flag, but we’re certainly raising a yellow or an orange flag. We should be cautious.”

However, state economist Mike Ferguson told JFAC a number of reasons why – though the preponderance of economic indicators are negative – Idaho might not need to worry as much as some states. Idaho still has low unemployment; is not as far extended in construction as states such as California, Florida, and Nevada; has growth predictions of 1.9% statewide and 2.9% in the Treasure Valley; is receiving a boost in exports because of the weak dollar; is not yet showing any weakening in auto sales. Also, historically, Idaho has done less badly in recessions than other states, coming in 35th in states most affected in the 2001 downtown and 46th in the one before that, he said.

The Governor’s 5% increase, which he has been planning since August, is the largest single new budget item at $78 million.