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Eye On Boise

Democrats respond to State of the State

House Minority Leader John Rusche, D-Lewiston, speaks at the House and Senate Democrats' response to Gov. Butch Otter's State of the State message and budget proposal. (Betsy Russell)
House Minority Leader John Rusche, D-Lewiston, speaks at the House and Senate Democrats' response to Gov. Butch Otter's State of the State message and budget proposal. (Betsy Russell)

House and Senate Democrats gathered this morning to give their response to yesterday's State of the State message, calling proposed cuts to education short-sighted and saying they favor using all available resources to help bring the state out of the recession. "The current budget crisis is a symptom, not a cause, of our problems," said House Minority Leader John Rusche. "It is the result of a lack of vision and a seeming determination to drive an ideology rather than achieve results."

Senate Minority Leader Kate Kelly, D-Boise, said, "In these critical times, we should be expanding and enhancing our public schools, not dismantling them. Make no mistake: Our children and grandchildren will be hurt even more if this governor and Idaho's Republican leadership continue their assault on neighborhood schools and higher education." The Democrats said they'll be proposing a package of legislation to promote jobs creation, and said they favor several steps to enhance state revenue short of tax increases: Hiring more tax auditors to collect uncollected taxes; reviewing existing tax exemptions and loopholes; collecting taxes on Internet sales; imposing user fees; rethinking the 2006 shift of school funding from property tax to state funds; and encouraging "green" energy development in the state.

The Democratic lawmakers filled one side of the new Senate minority caucus room for their press conference, while members of the press filled the other; in the corner and in the doorway were half a dozen Republican House members, listening in. Rep. Steven Thayn, R-Emmett, said he attended the Dems' event out of "a spirit of bipartisanship," adding, "We're interested in what they're thinking - we need to work together. They had a couple good points. I particularly like the one about energy creation, I like that." You can click here to read the Democrats' full press release, or click here for their prepared remarks. And you can click below to read a full report from AP reporter John Miller.

Democrats: GOP lets special interests rob revenue
By JOHN MILLER, Associated Press Writer

BOISE, Idaho (AP) — Republicans have let special interests loot from Idaho's revenue stream by giving them special tax breaks, minority Democrats charged Tuesday in an angry response to Gov. C.L. "Butch" Otter's bid to cut education and state agency funding.

House Minority Leader John Rusche said Otter's $2.46 billion budget proposal for fiscal year 2011, down from $2.5 billion in the year ending June 30, continues to slash critical services without a long-term job creation strategy.

Democrats, who hold just 25 of Idaho's 105 legislative seats, were particularly incensed that Republicans haven't more heartily embraced the elimination of state tax exemptions. There are roughly 120 exemptions worth some $1.6 billion annually.

Getting rid of the tax breaks would boost revenue and help pay for public education, the Department of Parks and Recreation and Idaho Public Television, all of which stand to see their funding slashed or eliminated under Otter's plans.

Culling exemptions could reduce taxes for all sectors — rather than have only a few companies benefit, Democrats said.

But calls for similar action have failed in recent years. In 2008, the Republican-dominated House tax committee rejected measures to repeal five Idaho sales tax exemptions, saying that selecting which breaks to eliminate would be unfair.

Republicans countered Tuesday that eliminating exemptions during the two-year-old recession would amount to a tax increase on businesses that would hurt a possible economic recovery. And they said exemptions considered the most-likely prospects for repeal wouldn't produce enough money to avoid cuts to Idaho schools, universities and other agencies.

In 2008, the five exemptions that survived the House Revenue and Taxation Committee — on purchases by funeral homes, ski resorts, free newspapers, vending-machine owners and for some automobiles — would have produced only about $4.5 million, had they been eliminated.

"Putting a sales tax on caskets is not going to save this budget," said House Majority Leader Mike Moyle, R-Star.

Still, this issue is likely to become a central 2010 election theme.

A Democratic candidate for governor, Keith Allred, has called for exemptions to be trimmed and said the absence of such proposals from Otter's State of the State speech Monday showed a lack of vision for pulling Idaho out of its deepest economic malaise in 40 years.

"If we do this, lives will be better for it," said Allred, former head of the nonpartisan government reform group The Common Interest.

Otter campaign aides didn't immediately return an e-mail seeking comment.

But the governor indicated in Monday's address he instead favors measures to eliminate the personal property tax that businesses now pay on their equipment. He also said he'd like to create tax credits for infrastructure construction investments and home buyers — similar to a program used in Utah — to spur the economy.

Copyright 2010 The Associated Press.

Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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