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Analysis: Idaho enjoys $277 million surplus

idaho center for fiscal policy

BOISE, Idaho (KIFI)-The independent Idaho Center for Fiscal Policy reports that when budget cuts, holdbacks, and Medicaid savings are excluded, Idaho’s budget surplus is estimated at $277 million.

According to the report, the surplus is due to higher than expected tax receipts from calendar year 2019.  The economic recovery was also better than expected and it was bolstered by population growth and over $9 billion in federal supports.

Although the future is uncertain and policy makers face tough budgeting choices, Center Director Alejandra Cerna Rios said, “Policymakers would be wise to prioritize investments in long-term economic growth drivers, such as public schools, roads, and bridges until the pandemic is brought under control and our fiscal picture improves.”

According to the report, Cernas Rios said it may be harmful for legislators to move around Medicaid funds.  The state’s Medicaid program received federal funding from an increase in the Federal Medical Assistance Percentage.  That program was put into place to cover increases in enrollment due to the economic downturn and changing utilization patterns during the pandemic.  The report suggests moving the short-term savings out of Medicaid permanently could prompt losses in access to care at a critical time for public health and economic recovery. 

Some of the key economic factors in 2020 included a 5% holdback ordered by the governor for Fiscal Year ’21.  That led to $98.7 million in cuts to K-12 schools and $96.5 million in cuts to other public services.

In March 2020, the governor issued another 1% holdback for the remainder of Fiscal year 2020.  That resulted in $19 million in cuts to K-12 schools, $16.6 million in pay freezes for state employees, a general hiring freeze, and other savings in state agencies. 

On top of that, the Policy Center said revenue collections reflected strong retail sales when Idahoans received stimulus checks in the spring and summer.   

The Center suggests using unexpected dollars to invest in transportation, education, and other areas that support long-term economic growth.

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