Eye on Boise: Idaho tax changes in the works

After months of study and presentations, members of the Idaho Legislature’s Tax Working Group have tallied their top-priority proposals.

The item that came out on top – the No. 1 priority – is to recommend that the Legislature consider revising Idaho’s individual and corporate income tax rates.

The 12 lawmakers on the panel have heard for months that simply cutting income tax rates won’t boost Idaho’s economy. They offered some qualifiers to that idea, with some saying any changes should be revenue-neutral, and rate cuts for upper brackets should be offset by cutting exemptions. Others said low-income taxpayers should be protected, while still others said it must be done in way that ensures a competitive business market for the state.

Conceptual draft legislation will now be drawn up, and the group will take public comments at its next meeting Dec. 15.

Tied for second and third priority were proposals to recommend drafting legislation to increase the exemption from business personal property tax, per county, from the current $100,000 to $250,000, and a recommendation that the House and Senate tax committees hold joint hearings during the legislative session.

Coming in fourth was recommending that the Tax Working Group be formalized by statute or concurrent resolution; and fifth, recommending that the House and Senate tax committees review and revise or eliminate some of Idaho’s sales tax exemptions.

There was also much talk about removing Idaho’s sales tax from groceries, and the group’s co-chairman, Rep. Gary Collins, R-Nampa, said he’d like to see draft legislation on that as well. Draft legislation also will be prepared on increasing the business personal property tax exemption.

Nine of the 12 working group members responded to the survey of the panel about priorities, and seven of those gave numeric ratings. Two just provided comments on the various ideas.

Sen. Jim Guthrie, R-McCammon, said he thinks income tax is “probably the most fair place to apply any kind of tax relief consideration.” He cautioned against further business personal property tax cuts unless counties’ revenue losses can be fully made up, to avoid the kind of funding shifts that followed the 2006 change in school funding in Idaho.

Sen. Grant Burgoyne, D-Boise, said he’s not opposed to lowering rates, but doesn’t want to lower “effective rates” – meaning any lowering of rates should be accompanied by broadening the base on which the tax falls. He also called for re-examining the school funding decisions that have led to schools asking voters for supplemental property tax levies every two years.

Collins, chairman of the House Revenue and Taxation Committee, said, “I feel that probably this year or in years to come, there will continue to be a hard push to take a look at the sales tax on groceries, food. … I do feel that the sales tax is a very regressive tax, especially for the low-income people in our communities.” He said, “I think if we opened the door and let the public in, I think that would be one of the taxes that the people, especially the lower-income people, would be addressing.”

He said he’d like the panel to develop “firm figures” on what that would cost and how it could be done, prior to the start of the legislative session.

“We’ll draw up some legislation,” said Senate Tax Chairman Jeff Siddoway, R-Terreton, who co-chairs the working group with Collins. Public input, he said, likely will be limited “to a couple of specific areas, maybe income taxes and the personal property tax, and perhaps the grocery tax. And we’ll try to get that figured out.”

Silver medal for new award

Idaho Gov. Butch Otter has unveiled a new Idaho Medal of Achievement, which will be the highest civilian honor conferred by the state of Idaho, and will recognize at least one Idahoan each year, living or dead, for their “exceptional, meritorious and inspirational” service to the people of the state. Hecla Mining Co. donated the silver for each of six 19-ounce silver medals, to cover the first six years.

Hecla CEO Phil Baker said, “We donated six years’ worth of metal, and, well, Hecla’s been around a long time. I’m sure we’ll be around at the end of six years, and so will be happy to donate more at that time.” Hecla Mining was incorporated in 1891, one year after Idaho became a state.

Otter named four members of what will be a five-member commission to vet nominees for the award; the fifth is in the works. The four: Former Idaho Secretary of State Ben Ysursa, former Idaho Supreme Court Chief Justice Linda Copple Trout, Boise businessman and prominent Democrat Skip Oppenheimer; and PERSI board Chairman and former Idaho Republican Party Chairman Kirk Sullivan.

Nominations may be submitted to the governor’s office by March 31; the commission will forward up to five finalists to the governor by May 1, and the governor will select each year’s winner.

Civil discourse training

Idaho lawmakers in January will go through a half-day workshop in January on “Building Trust Through Civil Discourse,” working with the University of Arizona’s National Institute for Civil Discourse.

For the past two years, Idaho lawmakers have had a half-day of mandatory ethics training the first week of the session. The civil discourse program, aimed in part at increasing the effectiveness of state legislatures, will take its place in 2016, but the ethics program will return the following year, after the election, and every two years after that.