Idaho House hijacks unemployment insurance tax cut bill to add on income tax cuts

BOISE – Idaho House members hijacked the Senate-passed unemployment tax rate cut on Thursday and decided to amend it to add an income tax cut into the bill.

House Majority Leader Mike Moyle, R-Star, pushed the change in the House Revenue and Taxation Committee, where it passed on an 11-5 vote. Three Republican representatives joined the panel’s two Democrats to oppose the move.

Moyle said he wants to add an income tax cut that would reduce the rate for every tax bracket by one-tenth of a percent, at a cost of $27.9 million a year to the state general fund.

The unemployment tax break, touted by Gov. Butch Otter as a financially sound way to save Idaho employers $115 million over the next three years, has no impact on the state general fund; it affects only the unemployment insurance taxes Idaho employers pay in to the state.

“Unlike the bill, this affects every income taxpayer in the state of Idaho,” Moyle declared. “This would make it so not only businesses see a break, but every income taxpayer in the state of Idaho. It’s similar to the amendments proposed (unsuccessfully) on the Senate side.”

Moyle’s proposal echoed amendments proposed earlier in the Senate by the Senate’s top GOP leader, Sen. Brent Hill, R-Rexburg, to a House-passed income tax cut bill. Hill wanted to add both the unemployment insurance change and a scaled-back income tax cut to the bill, in place of the larger income tax cuts the House had favored.

But Hill’s amendments were rejected in the Senate, which instead voted against its top leader and transformed the measure into a bill to remove Idaho’s 6 percent sales tax from groceries.

Rep. Greg Chaney, R-Caldwell, said, “This exact proposal … was presented in the Senate, and the body of the Senate specifically rejected this amendment. The bill as it’s written is good policy, businesses need it, and to specifically introduce into it policy that has been specifically rejected in the Senate, I think is not to be a very good listener.

“When we show that we’re not only not listening, but we really frankly don’t care what the Senate already has stated through their votes, I think we set ourselves up for failure,” Chaney said.

Moyle countered that the Senate hijacked a bill proposing income tax cuts and turned it into a bill removing sales taxes on groceries.

“I have a hard time saying when we leave this body, saying if you’re a business owner we’re going to cut your taxes, but if you’re an income taxpayer,” we’re not. “I think your concerns are unwarranted,” Moyle told Chaney.

Rep. Ron Nate, R-Rexburg, said he thought Moyle’s proposed amendment to the bill would violate the Idaho Constitution’s single-subject rule for bills, but Moyle said he had an Idaho attorney general’s opinion provided earlier to the Senate saying it wouldn’t.

The bill is now pending on the House’s amending order.