“This recent string of sub-par showings has raised concerns whether the sales tax will be able to recover enough to meet its targets during the important holiday shopping season.”-Derek Santos, Chief Economist for Idaho

After years of being ‘optimistic’ in his rhetoric regarding the local economy, Idaho’s Butch Otter is finally sounding more realistic: “…for both fiscal 2012 and fiscal 2013 to be years of limited growth that will require us to be very selective in the authorization of new general fund spending.”-Clement Leroy ‘Butch’ Otter, Governor of Idaho

If times were bad when he was being optimistic, what’s really gonna happen now?

The reason why Governor Otter is turning down his optimism is that month after month State tax revenues have been much lower than hoped for.  November was no different.  Derek Santos, Idaho’s Chief Economist, says November 2011’s tax returns were 4.1% lower than November 2010.  And last year’s tax returns were down as well.

In fact, sales tax revenues for the first half of fiscal 2012 are already $19 million below what was hoped for!  Income taxes are $6.7 million below expectations!

Idaho’s fiscal 2012 year runs from July 2011 to June 2012.

Economic analysts hope that Idaho will end fiscal 2012 with a surplus of $130 million.  But realize that the State has run through $395 million in reserves since 2009!  Now add to that the fact that analysts also expect tax revenues to continue to drop.  One report said that State leaders did not have a “plan B” for when they run out of surplus money.

The only way that tax revenues will go back up is if a lot of good paying jobs are created. I guess that would be part of any “plan B” that our exalted leaders have failed to come up with.