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Senate panel mulling tax bill

Otter seeks cuts for top earners, business

BOISE – A Senate panel is due today to help decide the 2012 Legislature’s last critical question: Will Gov. Butch Otter win his coveted $35 million tax relief bill, or will more-cautious lawmakers direct at least some of that cash toward savings, to be used if the economy sours again?

The Senate Local Government and Taxation Committee has agreed to an 8 a.m. hearing on Otter’s bill, which passed the House but languished for weeks in the Senate.

In the world according to Otter, Idaho’s economic turn of fortune has left it flush enough to direct about $35 million over five years toward teacher salaries, $35 million toward rainy-day savings – and give $35 million back to taxpayers.

In the world according to Sen. Tim Corder, the economic downturn is barely a thing of the past, so Idaho would be wiser to put the money in reserve accounts that helped save the state during the darkest days of the recession.

Corder, R-Mountain Home, chairs the nine-member Senate committee, where he’ll oppose Otter’s plan, in part because it provides a family of four earning $100,000 with just $71 in tax relief – not enough to really make a difference, he says.

“My vote is ‘No,’ ” Corder told the Associated Press.

In his State of the State speech in January, Otter said he wanted tax relief.

As Otter’s newly appointed Department of Commerce Director Jeff Sayer said last month, Idaho must freshen up its “window dressing” – to create the best first impression possible for scouts hired by companies looking for attractive places to relocate.

To start, Otter decided the best pep-up would be cutting top individual income tax and corporate tax rates to 7.4 percent, down from 7.8 percent for individuals and 7.6 percent for corporations.

House Speaker Lawerence Denney said Wednesday the session will be done this week, if the Senate goes along.

On the fence – but leaning toward supporting the tax cut – is Sen. Jim Hammond, R-Coeur d’Alene.

“I want to put every dime I can into savings,” Hammond said. “But I also appreciate, as we start climbing out of the hole in the economy, one of the things we can do is create a better first impression.”

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