John Watts of the Idaho Chamber Alliance told the Legislature’s Tax Working Group his organization has supported an array of tax-cut proposals over the years. But rather than a short-term, incremental step of lowering top income tax rates, he said the group would favor a big-picture, multi-year systemic reworking of Idaho’s tax system, possibly starting with that reduction as a first step.

Watts said the alliance’s goal is fourfold: To sustain state revenues for needed services, particularly education; to keep the state competitive; to keep more money in the pockets of employers and employees; “and ultimately, Mr. Chairman, our hope is to get to a flat tax, if not a flat tax at least a competitive lower rate that has some adjustments to the brackets.”

“The Idaho Chamber Alliance does not strongly support the proposal that’s on the screen today,” Watts said, referring to the proposal to drop the top income tax rates, both personal and corporate, from 7.4 to 7.3 percent. “It’s a good incremental step. We include the incremental step in a larger, more systemic change process to Idaho’s income tax. To make an incremental short-term step is a significant gesture, but it needs to be integrated into a much longer vision.”

Watts said the Chamber’s vision includes addressing existing exemptions; new growth; reduction of rates; and “altering the position of our funds, our savings accounts, and utilizing some of those funds to address gradual reductions.” He said the chamber’s plan, which he isn’t outlining in full today, has seven components. “The first one’s like the one on the screen, but there’s more to it than that.” It would include an effort to stabilize state revenues through the process, in part through use of existing state savings.

In response to a question from Sen. Grant Burgoyne, D-Boise, Watts said, “We’re not too keen on the grocery tax stuff right now.”

Asked by Sen. Steve Vick, R-Dalton Gardens, which existing exemptions he’d like to target, Watts chuckled. “I’m not about to gore someone’s ox here today,” he said. “You are the ones involved with setting tax policy in the state of Idaho.” Watts said the chambers hope to present options to lawmakers as part of an overall plan. Vick said, “I look with anticipation on what your proposal might be.”

Watts said the chambers' No. 1 priority this year is not income tax cuts; it's investing in professional-technical education, as outlined last week by state PTE director Dwight Johnson. Income tax rate reduction comes in second; third is county-option property tax exemptions for businesses; and fourth is local-option tax authority.

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