Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Sales Tax Distribution topic
No spam. Unsubscribe anytime.
Staff briefs JFAC on sales tax distributions; Techum receives 4.5% of net collections and $80M earmark for bonds
Summary
Budget staff explained how sales tax collections are distributed under statute and highlighted that the general fund now receives a smaller share because of statutory earmarks, including Techum and the school modernization fund.
Budget staff gave JFAC a detailed briefing on sales tax collections, how statute distributes those receipts, and how several statutory earmarks have reduced the share that flows to the general fund.
Keith Bybee said gross sales tax collections were projected to grow from about $3.1 billion in 2024 to roughly $3.37 billion in 2025 and to about $3.5 billion in 2026. He walked members through the statutory distribution formula (Idaho Code §63‑36) that reduces gross collections by refunds and then allocates portions to revenue sharing (11.5% of net collections), Techum (4.5% of net collections), an $80 million earmark for bonding, the school modernization fund ($125 million), the tax relief fund (online sales tax remittance), and other dedicated distributions to local governments and state programs. Because of those statutory allocations, Bybee said the general fund’s share of sales tax has fallen from roughly 86% during the Great Recession era to an estimated 65% in fiscal 2025.
On Techum funding, staff explained the current statutory approach: Techum receives 4.5% of net sales tax collections and the law guarantees $80 million of that amount for bonding in the initial implementation; any excess up to the percentage flows to local transportation districts. During Q&A members discussed a possible governor proposal to earmark an additional $50 million for Techum bond capacity. Bybee said he had not seen specific bill language but explained two possibilities: (1) if the legislature simply identifies a total of $130 million for Techum bonding (the existing $80 million plus $50 million) much of that could be absorbed within the current percentage calculation depending on revenue growth; or (2) if the $50 million is in addition to the 4.5% carve‑out, it would reduce amounts available to the general fund.
Bybee emphasized sales tax is the state’s most reliable but increasingly earmarked revenue source: "sales tax is your most stable, least volatile revenue source that you have," he said, and warned that as statutory earmarks grow the Legislature’s flexibility in downturns is reduced.
Committee members asked staff to provide the distribution tables and the sales tax pages in the Legislative Budget Book for review; staff said updated pages will be placed in the shared drive.
