(Press Release, May 21, 2020)
For First Time in 38 Years, Idaho State Government Won’t Borrow Money to Support Cash Flow, Saving Taxpayer Dollars
Boise, Idaho – Under the direction of Governor Brad Little and State Treasurer Julie Ellsworth, the State of Idaho will not borrow money in the bond market to meet anticipated cash flow requirements for the current fiscal year.
This is the first year since 1982 that the Idaho State Treasurer will not issue a State of Idaho Tax Anticipation Note (TAN) to meet the anticipated cash flow requirements due to the time lag between when state revenue is received and when state expenses are incurred.
“This move is about good government and prudent management of taxpayer dollars. Given the uncertain economic times, we must minimize state borrowing and limit the amount of General Fund that is committed to interest payments on loans,” Governor Little said.
The move was reviewed by the Treasurer’s Credit Rating Enhancement Committee at its meeting today.
“This prudent approach is a huge win for Idaho taxpayers. It saves General Fund dollars with respect to cash flow management. It also leverages the CARES Act dollars and puts them to work for Idahoans while still making these funds readily available to Idaho small businesses as this COVID-19 situation continues to unfold,” State Treasurer Julie Ellsworth said.
When the state issues TANs, the state pays interest to an external entity. Over the past five years, the interest has averaged more than $15 million to a national bank. Those taxpayer dollars will be saved this year by not issuing the TAN.
Governor Little approved a recommendation from his Coronavirus Financial Advisory Committee to leverage federal relief funds for cash management. Idaho has allocated only $450 million to date, out of $1.25 billion directed to the State of Idaho from the federal government.
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