Canyon County saw the biggest jump in jobless claims in Idaho in June, rising more than 1 percentage point to 12.2 percent, according to the Idaho Department of Labor. That was the highest unemployment rate for Canyon County since 1983 and the highest of any county in Idaho last month.
The statewide unemployment rate rose a half percentage point to 8.3 percent, while the nation’s unemployment rate edged up one-tenth of a percentage point to 9.5 percent.
In June, 3,400 workers in Idaho lost their jobs, bringing the total number of unemployed people in the state to 62,000 — a record, the Department of Labor said.
Unemployment in the Boise metropolitan area rose four-tenths of a point to 10.1 percent in June. Ada County’s rate rose two-tenths of a percentage point to 9.4 percent. Owyhee County recorded Idaho’s lowest rate in June at 3.5 percent.
What is not reported, however, is the drastic impact that this will have for the tax burden of those contributing to the Department of Health and Welfare.
The Idaho Food Stamp Program has temporarily dropped its asset test for eligibility to help residents struggling with current economic conditions.
Previously, most people were not eligible for food assistance if they had more than $2,000 in assets, which most commonly consists of savings accounts or vehicles such as boats or RVs, according to a news release.
By temporarily dropping the asset test, Idaho joins 22 other states that have taken similar action. “People seeking food assistance today are some of our most responsible citizens‹they have always worked hard, paid taxes and helped other people in their time of need,” says Health and Welfare Director Richard Armstrong. “It is now time for us to help them as they search for work and struggle to keep a roof over their families’ heads. We are confident that temporary help today will reduce many of the stresses families are facing, so people can concentrate on finding work and becoming self-sufficient again. That’s what we all want.”
Beginning June 1, the state dropped the asset test for one year. By placing a temporary one year limit, state leaders hope the economy will recover and people will be able to find work and no longer need public assistance.
The Idaho Food Stamp Program supplements a family’s nutritional needs. In recent months, the program has experienced record growth, serving approximately 140,000 people in April, up 36% from the previous year.
So how large is the Idaho Department of Health and Welfare? It is the second largest section of the Idaho Budget, right behind the Department of Education. Should this 36% increase in food stamp enrollees continue the current $184,785,100 budget allocation will grow to an even more massive. $251,307,736. That works out to be $164.92 per taxpayer that is to be collected to fund the Idaho Department of Health and Welfare.
But, something else is amiss here the 36% increase in the number of people needing aid was under the OLD non-asset tested rules.
So, my real question is this: how much will the portion of our taxes that fund the Department of Health and Welfare increase now that the asset test has been thrown by the wayside? Let assume that the number of people who need welfare is directly related to the unemployment rate. This connection will be ambiguous at best, nor will it be tested for accuracy in this hypothetical scenario.
In June of 2008, right before the market really started it severe economic downturn, the unemployment rate was 5.5%. The most recent economic data, through March of 2009, puts the unemployment rate at 8.5%. Let’s also assume that the baseline was June of last year, a figure that represents fairly accurately Idaho’s historical unemployment rate.
Should this premise be accepted, even for a casual debate, then the rate of growth for the Department of Health and Welfare would be a whopping 155%.
The tax consequences? The current budget allocation would grow to a whopping $286,416,905. That would mean $187.96 in direct taxation for every man, woman and child just for the Health and Human services function that the government seeks to provide. For your average family of four, the tax burden will grow to $751.84. Compare that to the current $184m budget, which levies only a $485.04 burden for the family of four.
So, this begs the question: 1) Who authorized the Department of Health and Welfare to throw off the asset tests? and 2) How do they intend to recoup the costs associated with expanding this new benefit? The only answer, of course, in through increased taxation. Sadly, something even the Wall Street Journal has warned it’s readers is all but inevitable.
