A panel of state lawmakers from both parties offered differing views to the Associated Taxpayers of Idaho today about where Idaho should place its priorities going into the next legislative session. “I believe there will be significant interest, if not pressure, to offer up some sort of tax relief this year,” said Sen. Jim Guthrie, R-McCammon. “We raised taxes for road work last year in a revenue-rich environment.” He said he’s not in favor of putting large sums of state surplus tax dollars into state savings accounts, “placing an additional burden on taxpayers today so we can build a savings. … I think the economy suffers when we unnecessarily put tax dollars in state savings accounts.”
Senate Minority Caucus Chairman Grant Burgoyne, D-Boise, said, he sees an “emerging consensus” in Idaho to fund the recommendations of the governor’s education improvement task force. “I do think that we will see more money in education, and I do think that the Legislature will follow through on its commitment to teacher pay that began last session. And that’s a big commitment,” he said. “Let me just remind you that we’re not quite back to where we were in real dollars to 2009 levels in K-12 education, and if we add on population and inflation, we’ve got quite a ways to go.”
Rep. Janet Trujillo, R-Idaho Falls, who is vice-chair of the House Revenue & Taxation Committee, pointed to a Tax Foundation ranking of states for business tax climate, in which Idaho ranked 19th, and noted that Wyoming, Nevada, Montana and Utah all ranked within the top 10. “We stuck out like a sore thumb,” she said. “A major factor was the absence of one of the major taxes.” The Tax Foundation’s website says, “The absence of a major tax is a common factor among many of the top ten states.” But it adds, “This does not mean, however, that a state cannot rank in the top ten while still levying all the major taxes. Indiana and Utah, for example, levy all of the major tax types, but do so with low rates on broad bases.” Idaho traditionally has tried to maintain a balanced tax system often compared to a “three-legged stool,” to avoid allowing any of the three pieces – property, income or sales taxes – to get too high. Trujillo said when lawmakers exempted most businesses from the personal property tax on business equipment, “I think we should have done away and eliminated that particular tax altogether.”
House Minority Leader John Rusche, D-Lewiston, said, “What I’m going to say, y’all might think is heresy, but tax policy is not holding Idaho’s economy back.” He said businesses in Idaho are concerned about an educated workforce and other operational concerns more than taxes, as are his constituents. “So I think we should be really careful about putting tax cuts ahead of what the state and our businesses and our communities need going forward.” Rusche said he favors moves to put more money in the pockets of middle class families, including a possible state earned income tax credit, more college tuition help and better funding for schools. “When school districts have a four-day school week, not of choice, not because it’s a better educational outcome for their students, but rather as a financial necessity, I don’t think we’re doing what we need to do for schools,” he said.
The lawmakers were divided over a proposal that’s been floated by the Otter Administration to spend $30 million a year in state funds, in part from a cigarette tax hike, to fund some basic preventive health care for 78,000 Idahoans who now make too much to qualify for Medicaid but not enough to qualify for subsidized health insurance through Idaho’s insurance exchange. The move, which wouldn’t cover prescriptions, emergency care or hospitalization, would be instead of expanding Medicaid, for which millions in federal funds are available. “Obviously this is a tough and controversial issue,” Guthrie said. “Certainly it’s a very politically charged issue, but the premise of Medicaid expansion is built on the shaky foundation of Obamacare. I think that has led to the tentative nature of the state to expand Medicaid.” He called the $30 million proposal “a step in the right direction.” Trujillo added, “The truth of the matter is that federal money never comes free.”
Burgoyne said, “It’s galling to me that we have such a crying need in Idaho and I’m paying taxes to the federal government that’s being used effectively for Medicaid expansion in other red states in this country, while we haven’t instituted that here.” Rusche, a retired pediatrician, called the plan “a poor second choice,” saying, “Worse coverage, more expensive – what’s not to like with that, right? I think that will be up for discussion, but I really cannot see that as being a good choice for the citizens of Idaho.”