Tax revenues just keep surging
It's as if COVID never happened. At least in some states.
The latest estimates from Pew’s Fiscal 50 project show that, following the end of the first quarter of 2022, tax receipts since the start of the COVID pandemic were even higher than expected before COVID. This is remarkable considering the economic strain that the COVID lockdowns placed on the country.
“According to Pew estimates, Idaho led all states, with 16% more cumulative tax revenue than it would have collected under its pre-pandemic growth rate. New Mexico was second at 15.5% above the trend. Nationally, combined tax revenue at the end of the first quarter of 2022 was 3% above estimates of what might have been collected had the pandemic not occurred.”
So, Idaho is doing well, and so is Montana at 6.2%. Wyoming and Washington, however, are not seeing results as positive.
Still, Washington’s tax revenues continue to surge so fast that many are calling for major tax cuts.
In Idaho, the legislature and Governor have already approved a reduction in the state income tax to a flat rate of 5.8% as well as one-time tax rebates.
As we approach the 2023 legislative session in Idaho and Montana, policymakers should look for ways to further reduce the state’s income tax. Both Montana and Idaho’s income tax rates are still relatively high. Utah, for example, collects at 4.5%.