Gov. Batt Vows To Veto Any Additional Tax Cuts

With several tax cuts nearing final legislative votes, Republican Gov. Phil Batt on Monday waved his veto stamp at the GOP-dominated Legislature and warned he will use it if any reach his desk.

Among Batt’s targets is a bill that would give Kootenai County taxpayers a $2.5 million property tax cut by replacing almost half of North Idaho College’s local tax funds with state money.

In a sharply worded letter to all 105 legislators, Batt said new tax cuts would drive Idaho’s budget into the red and jeopardize future support for schools.

Spending decisions by legislative budget writers, he said, have left no cash as a cushion against unexpected expenses or to accommodate a miscalculation on anticipated revenue.

That is after he imposed an across-the-board 2 percent budget cut last summer and essentially convinced lawmakers to adopt his already austere approach to spending.

All the state’s excess tax revenue was eaten up with last year’s $42 million property tax cut, Batt wrote, so that additional drains on the general treasury do nothing but siphon money from Idaho’s top priority - education.

“I will have no choice but to veto some appropriations and tax policy changes until I can be assured that I will not have to invoke a holdback and that we have not dug ourselves into a fiscal hole for future years,” the governor wrote in ending his two-page letter.

The warning appeared to have some impact almost immediately. The Senate narrowly killed legislation creating a special $10 million reserve to cover any reduction in state aid to public schools because of future state financial problems. The reserve would have replaced the never-used automatic property tax increase to replace any state aid that is withheld from schools.

The 18-15 vote surprised supporters who had expected the bill to pass. Three of the four Republican leaders in the Senate opposed the measure. Only Floor Leader David Kerrick of Caldwell voted for it. He is retiring at the end of this term.

But a major test was expected on several major bills awaiting either a vote by the full Senate or action by its tax-writing committee. They would drain millions of dollars from treasury and undermine the precariously balanced legislative budget blueprint.

Senate President Pro Tem Jerry Twiggs predicted that the bills could be stopped before they reached Batt’s desk and forced the governor to make good on his veto threat.

To make his point about the priority given education, Batt did veto legislation diverting 1 percent of all state lottery sales - about $1 million this year - from public building and public school maintenance to parks and recreation development.

Batt detailed a list of specific measures he objected to ranging from a new $5 million contribution to community colleges, a $2.2 million sales tax break for retailers in counties bordering no-sales-tax Oregon and an income tax break for businesses like Melaleuca Inc. that pay state taxes in other states.

Aides said telephones started ringing almost immediately with calls from lawmakers or affected parties hoping to salvage their legislation.

And Republican Sen. Evan Frasure of Pocatello got the tax committee to postpone action on the $2 million business tax break so he could make his pitch to Batt personally.

“These bills and others merit consideration,” Batt wrote.

“But the Legislature, if it adopts these bills, should find additional tax resources to fund them. I do not sense any desire to raise taxes among your membership.”