Latest from The Spokesman-Review
The House debated hard over HB 180, the supplemental appropriation bill for the next phase of “Medicaid readiness,” or federally required changes to Idaho’s existing Medicaid program. Rep. Pete Nielsen, R-Mountain Home, said, “We’re opening the door for Medicaid expansion, which can be a dangerous element in this state.” He said, “I really fear for Idaho financially to go down this road.”
Rep. Tom Loertscher, R-Iona, said, “I hate to debate in favor of this bill, because as all of you know, I have restated my entire time in the Legislature any expansion of Medicaid. But I think you have to realize here that this is not the expansion piece. … That is not what we’re doing here.”
Rep. Lenore Barrett, R-Challis, told the House, “I don’t care if you guys think it’s the law. I suppose it is up to a point. … We don’t have to abide by it as a sovereign state if we don’t want to.” Rep. Lynn Luker, R-Boise, “This is the time to send a message, if you want to send a message, and so I’m going to vote no.”
JFAC Vice Chair Darrell Bolz, R-Caldwell, said if the required changes aren’t made, Idaho’s Medicaid match rate from the federal government would suffer, costing the state more. And JFAC Co-Chair Maxine Bell, R-Jerome, said, “We have agencies who have to abide by the law, and it is the law. … This in no way puts policy in place for an expansion.” The bill then passed the House on a 48-21 vote; it now moves to the Senate.
HB 65, the bill to restore the $30 million to the current year’s public school budget that was put in limbo when voters repealed the “Students Come First” laws in November, has passed the House unanimously on a 69-0 vote – with no debate. “I would suggest that it’s impossible to define what the voters meant,” House Education Chairman Reed DeMordaunt, R-Eagle, told the House. “The bottom line is we don’t know. Let me tell you what we do know, though. We do know that each one of us in this body as well as the body across the rotunda were elected to try to improve our state, and by extension to try to improve our education system.”
DeMordaunt said the funds were expected by school districts when they set their budgets for the current year. “Really all we’re doing is just meeting the expectations that were set,” he said. The bill now moves to the Senate side.
After setting the first seven agency budgets this morning, the Joint Finance-Appropriations Committee unanimously agreed to urge state agencies to grant raises to employees if they can find the money through salary savings. “The Legislature finds that investing in state employee compensation should remain a high priority even in tough economic times,” the joint committee’s statement says; it will be written into every state agency budget bill.
Rep. Shirley Ringo, D-Moscow, said that wasn’t enough. “After setting the 3 percent spending limit, at the time we did it, I felt that I needed to look further into what the numbers might allow,” Ringo said. “If we were simply to take all of the agencies and move them a fourth of the way from where they are to 90 percent of policy, that amount that that would cost is almost exactly the same as a 1 percent change in CEC, and only … 2/10 of a percent of the total amount that we’re budgeting. So I feel that we definitely have room to do this.”
She added, “I feel that we’ve made public employees feel that they’re kind of at the bottom of our priority list recently.” She read from state law that requires lawmakers to prioritize employee compensation, even in tough budget times – and even if it requires raising additional revenue or changing priorities. “What I’m asking the committee to do here is consistent with code, and it’s asking that we prioritize,” Ringo said. She moved to reconsider last Friday’s committee vote to write in zero for CEC, or Change in Employee Compensation, in state agency budgets. That reconsideration would require a two-thirds vote. But it failed on a 4-14 party-line vote, ending that discussion, and wrapping up the committee’s work for the day.
A budget for the state Department of Environmental Quality that generally matches the governor’s recommendation – including the addition of $300,000 for a fish consumption study to stave off potentially more stringent water pollution rules from the EPA – has won JFAC approval, though Sen. Cliff Bayer, R-Boise, expressed concern. “I sure do feel like we’re not only being held over a barrel by the EPA in that regard, but now we’re being asked to use general fund taxpayer dollars to navigate that,” he said. However, Bayer ended up supporting the motion.
Rep. Shirley Ringo, D-Moscow, proposed an alternative budget plan that would add in a quarter of the amount necessary to move to move the department’s salaries closer to state policy levels. It would cost $830,000 to bring the department up to 90 percent of policy levels for its staff salaries; she proposed adding in $207,000 in state general funds. “This particular agency has been a poster child in the past for turnover rates that deal with the inability to have competitive pay, particularly for the more highly skilled positions,” Ringo said. “But in general, if we look at the report that was recently released by the Office of Performance Evaluations, this agency is one of the more troubled ones with low compa-ratio; it’s in the neighborhood of 81 to 82 percent. I think it is something that merits our attention.”
She noted that Idaho law requires lawmakers to make public employee compensation a top priority. “Our public employees have certainly helped us during the economic downturn to balance our budget,” Ringo said, noting that collectively, state workers took $12 million in pay reductions through furloughs.
A retired math teacher, Ringo said, “I’m not ignoring our obligation that we took last Friday to limit our spending to 3 percent.” She said her approach would spend just “a small percent of what our target is.” Ringo said, “I think it’s something that realistically we can look at doing, and I think we should do it.”
Ringo’s motion, however, failed on a 4-14 party-line vote, with only the joint committee's four Democrats supporting it. The original motion then passed on a 16-2 vote, with just Sens. Steve Vick, R-Dalton Gardens, and Sheryl Nuxoll R-Cottonwood, objecting.
Rep. George Eskridge, R-Dover, proposed a budget for the Idaho Public Utilities Commission, which gets no state general funds, that largely matches the governor’s recommendation, but Eskridge trimmed out funding for six of 18 computers planned to be replaced, and for one chair and two desks. “I reduced the replacement items slightly, just slightly,” Eskridge said, “recognizing that the computers were a little bit ahead of their normal replacement scheduled … and those other items I left out … still had good serviceable life and seemed to be appropriate to keep.” Overall, the budget rises by 4.3 percent next year, mainly because of the addition of a pipeline safety inspector, funded largely by federal Department of Transportation funds.
Rep. Phylis King, D-Boise, proposed an alternative budget motion leaving the computers and furniture items in. “May I remind the committee this is all dedicated and federal funds,” King said, adding that the cost of the chair, for example, “seems to me that that’s a minimal amount.” Eskridge, defending his proposal, said, “This is still ratepayer money. … I think we need to be prudent in determining when those replacement items actually need to be replaced.”
King’s motion was defeated on a 5-15 vote; Eskridge’s then passed unanimously.
There were unanimous votes in JFAC this morning on the budgets for the Division of Building Safety, state lottery, and endowment fund investment board; none include any state general funds, and none added funding for raises for state employees. In the building safety budget, Sen. Dean Mortimer, R-Idaho Falls, proposed the successful budget motion that marks a 2.5 percent decrease; he said he worked with the division, and cut $500,000 and 10 positions that currently aren’t being used, to bring the appropriation more in line with what the agency actually is spending.
A similar proposal passed unanimously for the Office of Energy Resources, which is seeing a 46 percent cut in its overall funding, largely because of the end of federal stimulus funds the office had been spending. “The lack of a stable ongoing source of revenue is an issue that needs to be addressed as soon as possible,” said Rep. George Eskridge, R-Dover, who made the successful budget motion. It matches the governor’s recommendation. However, when it came to Eskridge's proposal to allow the office to carry over the final $20,000 to $30,000 in stimulus funds to finish up those projects in fiscal year 2014, two JFAC members objected; that move then passed on an 18-2 vote, with Sens. Steve Vick, R-Dalton Gardens, and Sheryl Nuxoll, R-Cottonwood, objecting.
The first budget up for consideration in JFAC this morning was the Department of Finance, which receives no state general tax funds; it operates entirely with fees on the industries it supervises. Rep. Rick Youngblood, R-Nampa, who noted that he is a banker – an industry overseen by the department – proposed a motion that includes an item above the governor’s recommendation: To spend $196,600 to move 19 staff in the department from below 80 percent of policy levels in their salaries, up to 93 percent of policy. That would be partly offset by cutting $53,000 from the department’s requested replacement items.
“Being in the industry, I just felt it was important that we look at these salary increases,” Youngblood said. “In this department, it’s easy to lose its people. These employees … are well-trained professionals. It’s easy to lose ‘em to the industry.” The change would amount to roughly a 4 percent increase. Sen. Dan Schmidt, D-Moscow, called the change “appropriate.” But Sen. Steve Vick, R-Dalton Gardens, said, “I just have a concern about the precedent that this might set, and I’ll be voting no.” The budget proposal then was approved on a 15-5 vote; the five “no” votes came from Vick and Sens. Sheryl Nuxoll, R-Cottonwood, and Cliff Bayer, R-Boise; and Reps. Jeff Thompson, R-Idaho Falls; and Thyra Stevenson, R-Lewiston.
All state agency budgets are being built with zero funding for raises for state employees, unless JFAC members propose raises on a case-by-case basis. The votes today come after dozens of state employees filled a Capitol hearing room yesterday to tell lawmakers their pay is falling far short, and they see little opportunity for advancement without changing jobs.
Today is the first day of agency budget-setting for the Joint Finance-Appropriations Committee, with the PUC and Department of Environmental Quality among those on the agenda. First, though, the joint committee is considering a final supplemental appropriation request, this one a negative. The Catastrophic Health Care Program, based on its recently revised projections for the current fiscal year, has determined that available resources exceed the needs for this year by about $6 million, largely because the program has diverted a large number of its high-cost cases to the federal Pre-Existing Condition Insurance Plan, or PCIP. So Gov. Butch Otter has proposed a recission, or return of state funding, from the CAT program in the amount of $6 million for the current year.
Sen. Dan Schmidt, D-Moscow, moved to approve the change, with $2.4 million of that determined to be one-time, and $3.6 million ongoing. The committee agreed unanimously.
House Rev & Tax Chairman Gary Collins, R-Nampa, hasn’t set a date yet for a print hearing on the bill to remove Idaho’s sales tax from Girl Scout cookies, which would allow the bill to be introduced. He said he’s worried about the state budget being tight next year.
“I’m not saying that the Girl Scout cookies isn’t a good cause and all that, but there are a lot of good causes out there,” Collins said. His committee already has approved a sales tax exemption this session for anti-abortion pregnancy resource centers; that bill has passed the full House. But Collins noted its estimated fiscal impact was only $10,000 a year, compared to the $140,000 fiscal impact of the Girl Scout bill.
Rep. Eric Anderson, R-Priest Lake, the bill’s lead sponsor, said, “I honestly did not know, along with most of my colleagues … that we were taxing the cookies the way we are.” He said, “It’s more than worthy to have a conversation on. I would like to see it passed and signed into law.”
Collins said, “I’m sympathetic with what they’re talking about. I’m just weighing it.” You can read my full story here at spokesman.com.
Instead of flooding grocery stores with food stamp recipients on the 1st of every month, Idaho would stagger the issuance of food stamps over the first 10 days of each month, under legislation that cleared the Senate Health & Welfare Committee this afternoon on a 6-3 vote. Rep. Christy Perry, R-Nampa, said she was prompted to sponsor SB 1053 by her own experience going grocery shopping - and encountering huge crowds on the 1st of the month. Anti-hunger activists testified that the state's current single-day distribution leads to food going to waste when shoppers face long lines and abandon their carts of food, including easily spoiled food like frozen items that can't be re-shelved. A similar bill passed the House last year, but failed in the Senate committee.
There are about 65 people in room EW 41 of the state Capitol this afternoon for a “listening session” on state employee compensation; six Democratic lawmakers are assembled to hear the testimony. In the audience, House Commerce Chairman Stephen Hartgen, R-Twin Falls, and Joint Finance-Appropriations Committee Co-Chair Maxine Bell, R-Jerome, also are listening in.
Rep. Shirley Ringo, D-Moscow, who is chairing the session along with Rep. Phylis King, D-Boise, said this is the fifth straight year that Idaho lawmakers haven’t held a “CEC” hearing, which stands for “Change in Employee Compensation,” and is the mechanism through which the Legislature previously heard annually from state workers about pay and compensation issues before making decisions on whether to grant raises. “Now we’re working on the 2014 budget and the governor has recommended a zero percent change again,” Ringo said. “I think it’s high time that we did get together and listen to you and hear what your notions are relative to compensation.”
The state’s official study shows that state workers’ pay now is 18.9 percent below market levels.
The first to testify at this afternoon’s hearing was Michelle Doane, an auditor with the Idaho Transportation Department. “Six years ago, I left private industry to come to work for the state,” she told the six lawmakers, who in addition to Ringo and King include Reps. Hy Kloc, Janie Ward-Engleking, and John Gannon, all D-Boise. “I didn’t leave for the pay or benefits. I came because I wanted to serve.” She said her pay is “below that of my peers in private industry,” and opportunities for advancement are limited. “In order to receive more pay, I must get promoted rather than improve my skills,” Doane said. “It is very disheartening when we learned that there would be no CEC this year, and yet we are paying more for Social Security, health insurance and our PERSI. What does that say to the employees who serve this great state?” She said, “Holding back on our pay is a short-term solution causing long-term harm.”
Said Janet French, a technical records specialist for ITD, “We’re living paycheck to paycheck.” She said she’s worked for the state for more than 10 years and has advanced education, but her pay leaves her turning to Goodwill to shop for clothes, including the sweater and skirt she wore to the hearing. Ringo told her, “You look great, by the way,” and the audience gave French a round of applause. Scott Witzel, an ITD snowplow driver for the past five years, said the state's pay rates are "embarrassing" compared to those in neighboring states.
Shelly Doty, a 22-year state employee, drew a round of applause when she said, “To me, having pay grades for an average family that falls into the poverty level is appalling.” She said, “In a sense, we’re providing our own customers for Health & Welfare.”
Steve Seale, a 32-year state employee, said, "Maybe we could have an employee compensation commission that takes it out of the hands of the Legislature."
The associations representing Idaho cities, counties and school boards all have come out against the initial draft bill the governor’s office released last week to phase out the personal property tax on business equipment, reports Kevin Richert of Idaho Education News. “The legislation will result in a significant shift in property tax burden to homeowners, farms, and small businesses,” the heads of the three associations wrote in a letter to Gov. Butch Otter on Friday; you can read Richert’s full report here, and read the letter here. Click below for a report from AP reporter John Miller.
As Girl Scouts fan out across the state for their annual cookie sale, under current law, 22 cents of every $3.75 box they sell will go to the state of Idaho, rather than to Girl Scout programs. The Girl Scouts of the Silver Sage Council aim to change that, so they’re pushing for legislation this year to end Idaho’s distinction as one of just two states – Hawaii is the other – that still taxes Girl Scout cookies.
Removing Idaho’s 6 percent sales tax from the fundraiser cookies would cost the state roughly $140,000 a year, according to legislation being sponsored by Rep. Eric Anderson, R-Priest Lake, and co-sponsored by Rep. Grant Burgoyne, D-Boise. But the Girl Scouts say the money goes to a great cause: 23 percent of Silver Sage girl scouts are on scholarship, and the money to pay for their membership fees, badges, sashes and for camp comes from the cookie sale. Plus, Girl Scouts sponsor anti-bullying and STEM education programs among other good works; and their results speak for themselves: 80 percent of Girl Scouts go on to earn bachelor’s degrees; 80 percent of U.S. women business owners are former Girl Scouts; every female astronaut who’s flown in space is former Girl Scout; and 70 percent of the women in the U.S. Congress are former Girl Scouts.
“The state shouldn’t be balancing its budgets on the backs of Brownies,” declares Julie Hart, a lobbyist who’s representing the Girl Scouts free of charge, and who’s also the mother of a 9-year-old Brownie, Ella Marcum-Hart. She’s among about 30 Girl Scouts who came to the state Capitol today to press the case for their program and their tax bill, which currently is awaiting a hearing date for possible introduction in the House Revenue & Taxation Committee. The scouts distributed cards to every lawmaker about their cookie program, including how it helps the girls learn money management, business ethics, goal setting and people skills. They’re set up in the 1st floor rotunda of the state Capitol today, where lawmakers can meet them, hear about their legislation and exchange their cards for a free box of Girl Scout cookies.
Burgoyne, a former Boy Scout who stopped by to chat with Hart today, said, “I was very impressed with the analysis I read about how many successful women in the United States were Girl Scouts.” Nearby, Ella demonstrated a goal-setting bracelet and other crafts to Reps. Lance Clow, R-Twin Falls, and Ron Mendive, R-Coeur d’Alene, shown here. Her mom, a lobbyist who’s taken on this client pro-bono, said she’s gotten overwhelmingly positive response from legislators so far – except from the Rev & Tax Committee, where her bill awaits action. She’s hoping to get an introductory hearing date soon; Ella already is working on her speech in favor of the bill. Said Hart, “I am trying my hardest to get this passed for them.”
Idaho Statesman reporter Rocky Barker reports that new legislation from Rep. Ed Morse, R-Hayden, on regulatory takings echoes a 2006 initiative, Proposition 2, that Idaho voters rejected by a large margin, 76 percent no to 24 percent yes. Morse’s bill, HB 160, seeks to expand Idaho’s 2003 regulatory takings act to require that if a regulatory action cuts a property owner’s market value by 50 percent, the government would have to pay the owner or rescind the law or regulation; HB 160 is pending in the House State Affairs Committee. You can read Barker’s full post here.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — A bill that would ban teens younger than 16 from using tanning beds is back in the Idaho Legislature. On Monday, the House Health and Welfare committee introduced the measure, which would also require parental consent for 16 and 17-year-olds. Idaho Medical Association lobbyist Ken McClure says artificial tanning poses a serious health concern to young people and heightens risk for skin cancer. Under the bill, violators would be charged with a misdemeanor and fined up to $100. A similar proposal that barred anyone under 15 from tanning and required parental consent for older teens died in the Senate last year. That legislation had support from medical professionals but was panned by tanning industry representatives who argued parents — not the government — should regulate their children's behavior.
Click below for a full report from AP reporter Hannah Furfaro.
Mentally unstable teens who pose a serious threat to themselves or others could be ordered into temporary protective custody by their doctor for up to 24 hours, under a bill introduced in the House Health & Welfare Committee this morning, the AP reports; under existing law, only law enforcement officials can detain juveniles. Ken McClure, lobbyist for the Idaho Medical Association, said the measure would bring laws regarding treatment of mentally ill juveniles in line with those for adults, and give health providers a tool to help them deal with emergencies. The committee vote clears the way for a full public hearing on the bill.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho residents with concealed weapons permits could soon carry their guns in more states, under a plan to allow them to get additional training. Currently, most states don't recognize Idaho concealed weapons permits, because they require little instruction. Rep. Joe Palmer of Caldwell aims for Idaho to offer a new, voluntary enhanced permit that includes an eight-hour class with live fire training. The Republican lawmaker says holders of one of these new permits would likely be eligible to carry a concealed weapon in about three dozen states. Rep. Judy Boyle, a Midvale Republican, said last week she's also hopeful an enhanced permit like Palmer proposes could convince Idaho school boards to allow people to carry concealed weapons in schools. Palmer's bill won introduction in the House State Affairs Committee Monday.
Today is the day that both the House and the Senate hold their memorial services to remember those former members who have died in the past year. In the Senate this morning, formers Sens. Larry Craig and Denton Darrington returned to take part in the ceremony; here, Craig is recalling the late Sen. Lyle Cobbs of Ada County. Those former senators being memorialized this year are Dean Van Engelen,Cassia and Minidoka counties; Clyde Boatright, Kootenai and Bonner counties; Cobbs; and Perry Swisher, Bannock County; in the House, former representatives being memorialized include Swisher and Cobbs, who both also served in the House, along with Jack Barraclough, Bonneville County; Beth Fitzwater, Ada County; Jim Jones, Elmore and Owyhee counties; and Karl E. Koch Sr., who represented Camas, Elmore, Gooding and Twin Falls counties.
There was no opposition, and the House Revenue & Taxation Committee was unanimous this morning in backing HB 140, the bill to clarify that tribe-owned land within Idaho Indian reservations is not subject to local county property taxation. Such lands hadn’t been taxed in Idaho for a century due to the state Constitution’s provision declaring that the state “forever disclaim(s) all right and title” to tribal lands, but some counties around the state started sending tax bills to tribes in 2006.
“This is something the tribes need and the counties need … for clarity,” Helo Hancock, legislative director for the Coeur d’Alene Tribe, told the committee. “It certainly is consistent and reaffirms the Constitution.” The bill adds tribes to the section of state law noting that government property isn’t subject to local property tax.
On Friday, the Kootenai County Commission voted unanimously to cancel the back property taxes it had assessed against the Coeur d’Alene Tribe’s lands. “The tribe is certainly a government,” Hancock told the committee. “It’s required to provide essential services,” from police, courts and fire to road and social service programs. He noted that the Coeur d’Alene Tribe also has donated $10 million to taxing districts in its area.
Rep. Neil Anderson, R-Blackfoot, said, “We’re talking about the Coeur d’Alene Tribe, who I think are a progressive, generous group of people. But it’s my understanding this law will apply to all Indian tribes in the state of Idaho,” including those, he said, that might not be as “magnanimous.” Hancock responded that the Kootenai Tribe donates 10 to 20 times the amount to its surrounding community that would be generated if its lands were taxed. At the Shoshone-Bannock reservation in eastern Idaho, he said, 98 percent of the property is tribal trust land, and the amount in dispute over county property taxes is only about $3,000. Total statewide property tax bills that have been sent to tribes come to just over $300,000 a year, much of that on the Coeur d’Alene reservation; much of the land targeted was opened up for non-tribal homesteading at one point in history, then later reacquired by the tribe.
The bill now moves to the full House; to become law, it must pass both there and in the Senate and receive the governor’s signature.
The Senate State Affairs Committee has approved SB 1074, legislation from Sen. Patti Anne Lodge, R-Huston, to allow a special liquor license for the Caldwell Night Rodeo. The rodeo has long had a beer and wine license and has sold liquor through a catering permit from a local restaurant, but this year, the state Alcohol Beverage Control office advised it that that was not proper procedure. State law already permits a special liquor license to be issued to a professional “equestrian facility” of 40 acres outside a city, with at least 6,000 seats and at least three days a year of professionally sanctioned rodeo; the bill modifies that to 25 acres inside or outside a city.
Sen. Chuck Winder, R-Boise, said, “I’ve attended many a rodeo there, particularly at the old fairgrounds. … I do remember when there were some times with people drinking and fighting. … But that still doesn’t take away from I think what is a tradition in their community, what is a wonderful contribution to their economy.” He said, “Even though I’m not a real fan of the issues of public drinking and the social costs of those, I probably am going to support this for the benefit of the community.”
The bill now moves to the full Senate for consideration; it would provide the Caldwell Night Rodeo with the same type of non-transferable liquor license state law allows for golf courses and ski resorts. The law also provides for an array of other types of special licenses; otherwise, liquor licenses in Idaho are available only inside cities through a formula based on population. Other special licenses cover airport restaurants, convention centers, historic bars, certain lakefront bed-and-breakfast facilities, and gondola resort complexes. Several years ago, Gov. Butch Otter proposed a sweeping reform of Idaho's system for allocating liquor-by-the-drink licenses, but lawmakers rejected it.
On tonight’s “Idaho Reports” program on Idaho Public Television, I join Rocky Barker, Jim Weatherby, Bill Spence and host Greg Hahn to discuss the week’s developments in the Legislature, from the new personal property tax proposal to the Senate’s historic rejection of the governor’s Fish & Game nominee to the unprecedented way 16 House GOP freshmen have stepped forward to become a factor in the fate of a state health insurance exchange. Plus, Greg talks with Senate Majority Leader Bart Davis, R-Idaho Falls, and interviews freshman Rep. Cindy Agidius, R-Moscow; and there’s another installment of the virtual tour of the restored Capitol. The show airs at 8 p.m. tonight; it re-airs Sunday at 10:30 a.m. Mountain time, 9:30 Pacific; and plays on Boise State Public Radio on Sunday at 7 p.m. After it airs, you can watch it here online any time.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — More gifted Idaho high school students are one step closer to having an expedited path to one of the state's public universities under a bill approved by the Senate. The Senate signed off on a bipartisan bill Friday that makes permanent a pilot program offering high-achieving students college scholarships equal to about $1,400 if they graduate early from high school. That bill will now move to the House. Republican Sen. Steve Thayn, of Emmett, said over $40,000 in scholarships was dispersed last year. He said Idaho saved $150,000 that year because the state's cost of educating one student annually is higher than the average award. Thayn said the measure also benefits local districts by providing them a portion of the state's savings to use for other expenses.
At the request of Idaho’s high-tech businesses, the House Revenue & Taxation Committee agreed this morning to introduce legislation to clarify that “cloud computing” services delivered over the Internet are services – not tangible goods subject to the sales tax. That’s been an issue for a growing number of Idaho high-tech firms since the Idaho State Tax Commission in October issued a bulletin about how interprets the state’s 1993 law saying software is taxable property regardless of how it’s delivered to the customer; you can read my full story here at spokesman.com.
Jay Larsen, head of the Idaho Technology Council, told the committee he’s not talking about purchases of software. Instead, cloud computing essentially involves people renting computing power, electronic storage space and other services over the Internet through subscriptions. “This legislation will help set the foundation to continue to show that we have the right infrastructure from a public policy standpoint to support tech companies and software companies as they grow and develop,” Larsen told the committee.
In recent months, he said, a number of high-tech firms have been audited by the state Tax Commission and told they have to pay large amounts of back sales taxes. “This tax has caused a lot of people to consider moving their operations out of the state so they would not have to pay that tax,” Larsen said. “It says if your servers are in the state of Idaho, you pay 6 percent more than if your server is in the state of Oregon.” He urged the lawmakers to “make it so it’s more competitive for the industry here in the state of Idaho.”
Rep. Dell Raybould, R-Rexburg, said, “You’re not an owner of this property, because you can’t dispense it, you can’t modify it, you can’t change it. So actually, what you’re doing is just renting it. You’re renting it from the provider. … Is that correct?”
Larsen said yes. “You went right to the heart of the matter,” he said. Several other committee members had questions, including about the difference between subscribing to a cloud-computing service and downloading software online.
Rep. JoAn Wood, R-Rigby, said, “I can see in this committee there’s a considerable amount of interest in what you’ve brought to us, so I think probably we ought to explore it further.” She moved to introduce the bill, and her motion passed unanimously, clearing the way for a full hearing on the measure.
Larsen said the Idaho Technology Council is an industry organization “focused on growing technology and innovation in the state of Idaho and the region.” Its membership consists of nearly 200 Idaho businesses.
The Wall Street Journal reported recently that Idaho is one of six states since 2009, including Washington, that have moved to apply sales taxes to cloud services in some form; while six other states, including Kansas and Nebraska, have reached the opposite conclusion in the same time period, deciding that cloud services should be exempt from sales taxes.
Here's a news item from the Associated Press: BOISE, Idaho (AP) — Idaho cities could have an additional $3 million in tools to attract businesses to their communities through a bill approved by the House. The Idaho Opportunity Fund passed through the House on a 59-8 vote Friday and will now go to the Senate. Under the legislation, towns would be eligible for money to use on infrastructure projects, like new roads, that companies looking to relocate in Idaho might require. The proposal requires local governments to match any state grants. Idaho Falls Republican Rep. Jeff Thompson said it also includes oversight measures meant to hold businesses accountable. Companies promising an economic windfall are required to prove their benefits before they get state funds. Rep. Pete Nielsen, of Mountain Home, said Idaho should focus on mandatory services instead of creating new grants.
Rep. Shirley Ringo, D-Moscow, said she didn’t object in JFAC this morning to a budget-setting framework for state agency budgets that doesn’t include raises for state employees because “the number that the committee agreed to budget to didn’t have any room for CEC,” or change in employee compensation. Yet, Ringo said, state law requires the state to address state worker compensation and move workers to policy pay levels, a standard from which it’s falling far short. “I have a bill prepared to generate the revenue that would then be able to support that,” Ringo said. “I’m still talking to the chair of Rev & Tax about when that bill will be heard. Our problem is revenue. I’m hoping that the people on this committee get a real picture as to how some of these revenue decisions we make, such as the $35 million tax cut last year, affect our ability to meet our obligations. CEC increases are in Idaho code. We’ve been totally ignoring that.”
In fact, in past years, the Legislature held hearings each year in the House and Senate Commerce & Human Resources committees to hear from state employees on compensation issues and decide about CEC each year; they don’t any longer. As a result, Ringo and Rep. Phylis King, D-Boise, have scheduled their own hearing for Monday, from 4-6 p.m. in room EW 42, and are inviting state workers and the public to comment on issues ranging from wages, workload and training to the condition of state buildings and the adequacy of technology.
Ringo said she’s drafted legislation for a 5 percent surcharge on income tax for those with taxable incomes of more than $50,000 a year, which is roughly equivalent to gross income of $75,000 a year or more. That would raise about $44 million a year, enough for a 2 percent CEC next year plus moving all state employees to 90 percent of the policy-level pay for their position, and leave some left over. Ringo said the revenue could also go to such items as deferred maintenance on state buildings. “I think the bottom line is we have some needs,” she said. “I think we have an incredible need for some additional revenue.”
One of Gov. Butch Otter’s most controversial proposals in his budget – to provide zero funding for raises for state employees – has been endorsed by the Joint Finance-Appropriations Committee, for purposes of building its budgets for each state agency. Otter recommended increases only to comply with statutorily required boosts for statewide elected officials and for certain military division employees due to federal pay schedule changes; state employee pay, though it remains far below market levels according to state studies, wouldn’t change.
Sen. Dan Schmidt, D-Moscow, asked whether JFAC members could still consider including raises in state agency budgets on a case by case basis, and JFAC Co-Chair Dean Cameron, R-Rupert, said yes; today’s decision wouldn’t preclude JFAC members from making such proposals.
JFAC will start setting agency budgets on Tuesday morning; that will also be the start of the joint committee's early-morning, 7 a.m. work sessions prior to its 8 a.m. budget setting.
The joint budget committee is now debating a series of items that will play into every agency budget it sets for next year: Benefit changes, inflationary items, replacement items and more. So far, JFAC has agreed unanimously to include the governor’s recommendation for benefit cost changes for state employees in all agency budgets, but not to include either his recommendations for inflationary adjustments or his recommendations for replacement items – a big budget chunk. Instead, when JFAC members propose budget motions, they’ll have to decide on a case-by-case basis whether to include any of those inflationary adjustments or replacement items.
JFAC has voted unanimously, 20-0, to set a target for its appropriations for next year, fiscal year 2014, that’s 3 percent above 2013 appropriations, matching Gov. Butch Otter’s recommendations. That puts the total general fund spending target for next year at $2,783,010,200. “This is a ceiling,” said JFAC Co-Chair Maxine Bell, R-Jerome, who made the successful motion. “It cannot be any more – it can be less. But we need it in place to go forth.”
The Otter Administration forecasts that state general fund tax revenue next year will rise by 5.3 percent, but recommended spending just 3 percent. Bell said, “I believe that this is prudent. This will keep the core responsibilities of the state government in place, and it will not put us in a position where budgeting 18 months out like we do, that the (governor)… is going to be in a position about August to have to cut further.”
The figure takes into account several changes since the start of the legislative session, including the passage of the IRS conformity bill, which costs the state budget $6 million in the current year and $3 million in fiscal year 2014, and the “Hire One More Employee” act, which has passed the House and has a $10.4 million fiscal impact for next year. It also reflects decisions already made on supplemental appropriations for the current budget year.
The Idaho Farm Bureau Federation has brought in a new version of its bill to make it tougher to get initiatives or referenda on the Idaho ballot, this time requiring signatures to come from 6 percent of residents of 18 of Idaho’s 35 legislative districts, rather than from 22 of the 35 legislative districts. The new bill is otherwise identical to the group’s earlier measure. The Senate State Affairs Committee voted this morning to introduce the new version, but only after Sen. Elliiot Werk, D-Boise, said he’s heard from his constituents “a deep-seated anger with these kinds of attempts to lessen the ability of the people to petition us,” and Sen. Bart Davis, R-Idaho Falls, noted that a 9th Circuit court decision cited by the Farm Bureau doesn’t indicate the courts would uphold such a restriction, which likely would land the state back in court. “I have some confidence that there’ll be a judicial opportunity for review should the Legislature adopt this approach,” Davis said.
Under the proposed legislation to eliminate the personal property tax on business equipment, urban renewal districts in Lewiston and Moscow would lose as much as 39 percent of their annual property tax revenues, reports reporter Bill Spence of the Lewiston Tribune. "If we don't generate enough revenue to pay our bills, we're absolutely stuck," Lewiston Community Development Director Laura Von Tersch told Spence; click below for his full report. The draft legislation specifically excludes urban renewal districts from receiving any state replacement funds to offset the tax cut for businesses.