Idaho’s general fund is going to be more pressed for cash for the remainder of its fiscal year than had been expected, according to a forecast the state released last week.
Because of the recession, tax revenue is now running about $173 million below forecasts economists made back in February.
The recession is also driving state expenses higher. If the new projections hold, the general fund will end the year with a negative balance of $151.4 million, instead of the $49.5 million surplus projected in the state budget.
Gov. C. L. “Butch” Otter, a Republican, said the state has some of the same tools available that it used to deal with shortfalls in its previous budget, including withholding funding to state agencies, additional cost-reduction and efficiency measures, and draws on reserve accounts or rainy-day funds.
Idaho has $274.3 million in its rainy-day funds, according to the Spokesman-Review newspaper.
Otter was scheduled to meet with his cabinet, and the Legislature’s Republican majority and Democratic minorities over this week and next.
“We have the experience, the tools and the commitment needed to address this situation while maintaining necessary public services,” Otter said in a statement. “We are fortunate to be far better off than most other states, thanks to sound, conservative fiscal management and a strong understanding of government’s limited role in people’s lives.”
Citing a “challenging revenue environment,” Standard & Poor’s in July revised to stable from positive its outlook on Idaho’s AA issuer credit rating and the Idaho State Building Authority’s AA-minus appropriation debt.
