Idaho has closed the books on its 2021-22 budget year, with a record-setting $1.4 billion surplus.

Gov. Brad Little touted the surplus in a Friday morning news release — and pledged, if re-elected, to pursue another round of tax relief and another infusion of new money into education.

The record-setting surplus was not a surprise. After the state’s 2021-22 budget year ended on June 30, budget analysts projected a $1.3 billion surplus.

On Friday, the surplus bottom line came in at $1,381,211,927.

By contrast, the state ended the 2020-21 with a surplus of nearly $900 million, then a record.

Across the board, this year’s tax collections beat projections, according to Little’s Division of Financial Management:

• Idaho collected $2.6 billion in personal income taxes, up from a projected $2.3 billion, and $2.4 billion a year ago. This year’s income tax collections reflect one round of budget cuts; the 2021 Legislature cut Idaho’s top-end income tax rate from 6.925% to 6.5%. This year’s Legislature further cut that rate to 6% — a reduction that went into effect in January.
• Sales tax collections came in at $2.2 billion, beating projections of $2.1 billion. The state collected about $2 billion in sales taxes last year.
• Corporate income tax collections surged. The state brought in $1 billion, compared to projections of $400 million and corporate tax collections of $300 million the previous year. The 2021 and 2022 Legislature also cut the corporate tax rate.

The news of the surplus doesn’t just wrap up one budget year. It sets the stage for a budget-setting process that will run through the spring.

Here’s what it entails:

First, all state agencies will submit their spending plans for the 2023-24 budget year. Those proposals — including requests from higher education and from lame-duck state superintendent Sherri Ybarra — will be due Sept. 1.

Next, the governor will write a budget request, encompassing all state agencies. The governor will unveil this request on Jan. 9, the first day of the 2023 legislative session.

Then, the Legislature has to pass agency budget bills, which then go to the governor’s desk. Those bills begin with the Joint Finance-Appropriations Committee, a House-Senate budget-writing panel.

And before the governor and the Legislature will step in, there’s an election.

Some turnover is guaranteed. After a series of retirements and primary defeats, at least 11 of JFAC’s 20 members will be new. A new state superintendent will pick up on Ybarra’s budget request and present it to JFAC in January. Little is up for re-election.

But that didn’t stop the governor from laying out his priorities, including tax cuts and education spending.

“This year, we made the single largest investment in public schools in state history. The strength of Idaho’s economy and the sound management of state government mean we will continue to be able to invest record amounts into schools, roads, water, and other key areas to keep up with growth and improve the lives of the people we serve,” Little said in a news release.

Education lobbyists are pushing for a variety of spending initiatives — and hope some of the surplus will go into one-time spending on K-12 facilities.

More reading: More about today’s surplus news from Clark Corbin of Idaho Capital Sun.

Listen: On this week’s Idaho EdNews podcast, Kevin Richert and Corbin talk about the surplus and the recent Idaho Republican Party convention.