As the Idaho Legislature’s Tax Working Group continues meeting today, it’s hearing continued presentations; you can listen live here. A panel of CPAs focused on some specific complications in the Idaho income tax code, in which it departs from federal law; Suzanne Budge, lobbyist for the National Federation of Independent Business, said her small business members struggle with taxes and regulation; and Lauren Necochea, director of the Idaho Center for Fiscal Policy, said Idaho’s tax system is “relatively fair for Idahoans,” and called for maintaining the system’s balance between income, sales and property taxes; investing in education and infrastructure; and reviewing and evaluating existing tax breaks and incentives.
Senate Tax Chairman Jeff Siddoway had a question for Budge. “I guess it’s easy to say we want lower tax, but you know the lower taxes also have a ramification,” he said. “I was wondering if your membership … came out with the spending reductions that they would like to see occur at the state level when they, I guess, get their wish and taxes are lowered. Because you know the budget as well as anybody in this room: Ninety percent of it goes to education, Health & Welfare and corrections, and then there’s 10 percent that’s spread over the rest of the state for all the other agencies and regulations necessary. Did they come up with any suggestions on where those cuts should be made if those revenues were reduced?”
Budge called it a “fair question,” and said, “We’ve had those questions as well, and not surprisingly the answers are all across the board. … I would be remiss to say all of my members wouldn’t love a tax cut. … They would also love a regulatory burden to be lifted somewhat. ... Probably most businesses would give you a different answer depending on the circumstances that they were in.”
Necochea referred back to an earlier speaker’s comments about North Carolina thriving after cutting personal and corporate income tax rates, saying that’s true, but that it’s the only one of five states that made such cuts in recent years that’s doing well economically. All four of the others have seen their economies lag. “What does have a strong relationship with our median wage? It’s education,” she said. “It’s the percentage of workers with a bachelor’s degree. A generation ago, 30 years ago, it was a weaker relationship. This is a new day, a new economy.”