Idaho lawmakers try to predict the state’s economic future

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BOISE – Lawmakers on an economic forecasting committee working on recommendations the entire legislature can use to set the state budget struggled Thursday to consider how billions of dollars in Federal coronavirus relief money will influence the state’s financial position in the future.

Lawmakers on the Economic Outlook and Income Assessment Committee have expressed concern that Idaho’s record $ 1.6 billion budget surplus could be in part due to relief money against coronaviruses which will dissipate in the years to come.

“I think there is no question that there is federal money that contributes to our record revenues,” said Erin Phipps of the Legislative Services Office, who is on the Legislative Assembly support staff. “But then, there are also economic indicators happening in the state that suggest it’s not just federal funds.”

She cited the strong population growth and low employment rate as examples.

The committee will make recommendations that will be used by the entire legislature to establish the state budget for fiscal year 2023, which begins this summer. Lawmakers begin to meet on Monday.

“Probably in this session it’s going to be about tax cuts, which I think will be very good,” said Republican Senator Fred Martin. “It’s relatively easy to vote for and sell a tax cut to the Legislature and the general public. It is much more difficult to come back later and possibly make a tax increase, which I do not want to vote for.

A senior House Republican said in December that a $ 400 million tax package including a $ 200 million income tax cut and a one-time $ 200 million tax break was being prepared for the legislative session. Last year, Republican lawmakers passed roughly $ 400 million in tax breaks that Democrats say mainly benefited the wealthy.

Also on Monday, Republican Gov. Brad Little will deliver his state-of-state address and release his own Recommended Budget. The state will also release a new budget forecast on Monday, potentially increasing the expected budget surplus even further.

Legislators on the committee spent a lot of time learning about the state’s unemployment rate and labor force participation rate.

Idaho’s unemployment rate was 2.6% in November, tied for fourth in the country. But the state’s workforce participation rate fell by a tenth of a percent to 62.3 percent, a new all-time low. Idaho’s maximum participation rate was 71.4% in September 1998. The labor force participation rate includes people 16 years of age and over who are working or looking for work.

Craig Shaul of the Idaho Department of Labor told them the state was short of manpower.

“Employers are actually trying to attract the workers they need from each other,” he said. “Competition for employers is not just for customers, but for workers to get the job done. “

Various speakers addressing the committee attributed the low labor force participation rate to workers who choose to retire and family members, mostly women, who stay at home to care for children or elderly family members.

“Many of these people are staying at home due to a lack of child care or elder care,” said Tom Kealey, director of the Idaho Department of Commerce, noting that some 200 daycares have closed. during the pandemic.

Other topics lawmakers heard included potential issues with the ongoing coronavirus pandemic and new variants, the sharp rise in house prices, potential inflation issues, and lingering issues with the supply chain.

The committee is due to meet again on Friday to receive more economic information.


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