By Sen. Jim Woodward, R-Sagle
In the Legislature, as in life, we play the hand we’re dealt. Fortunately, the deck is currently stacked in Idaho’s favor and I believe, in part, because of decisions made by Idahoans over many years and decades. We have the fourth lowest unemployment rate in the country. Our population growth is the highest in the country. In a state with just over 1.8 million people, more than 50,000 people decided to join us last year. That growth has its pros and cons, but it is certainly driving strong economic performance in Idaho. From 2016 to 2020, our gross state product increased well over 20%. Although inflation is now definitely a factor, something many people have not previously experienced, wages are also up substantially due to employer competition for the available workforce. There are currently more than two job openings for every person unemployed in the state. That is opportunity.
With a strong economy comes higher state tax revenue. As of this week, we expect to end the fiscal year with Idaho general fund receipts of $1.9 billion more than anticipated. These are your income tax and sales tax dollars.
In addition to state tax revenues, Idaho is receiving more than $5.74 billion in federal ARPA funds. More than half of the money is flowing straight to Idaho residents as stimulus checks or direct to state agencies, counties and cities. The remaining $2.5 billion must be appropriated by the Legislature. The combination of the additional state general funds and the federal funds provide great opportunity to catch up on a backlog of public needs.
The governor laid out his strategic vision in the State of the State address on Jan. 10. I expect we will implement most of his proposals during this legislative session. The highlights from the budget proposal are available in PDF format: bit.ly/3Iex5BI.
To summarize, we will see substantial investments in education, transportation and broadband infrastructure. Debt on state buildings will be eliminated and rainy days funds will finally return to pre-2008 levels. Water and sewer infrastructure will be upgraded throughout the state. Wildland firefighting capabilities will be upgraded, along with expanding capacity at state parks to meet record demand. Health care capacity, behavioral health support systems and state veteran homes will see substantial investments. Election security will be enhanced and law enforcement will gain additional capabilities. All these investments are possible while still providing one-time tax relief in the form of a 12% refund on 2020 state taxes as well as ongoing tax relief by reducing the state income tax rate.
If you are involved in a local water or sewer district, please start talking with the Idaho Department of Environmental Quality. They will be administering a $450 million grant program with an emphasis on rural communities in need of infrastructure upgrades. This is a unique opportunity to improve systems that will last for generations.
All these expenditures beg the question, “Just how much are we going to grow government?” In fact, we aren’t. Idaho government is growing at a slower rate than the economy. State government expenditures have decreased from 4.7% of gross state product to 4.4%. Our population growth, ever more efficient business practices and increased tourism drive the unprecedented economic growth we are experiencing. To maintain our quality of life, we will continue to seek the balance between government spending and a sensitivity to the taxpayer’s wallet, something Idaho has long been known for.
Jim Woodward is a second-term Republican senator from Sagle. He serves on the Joint Finance-Appropriations and Education committees, and as vice chair of the Transportation Committee. Reach him during the 2022 legislative session at 208-332-1349, 208-946-7963 or [email protected]
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