Senate raises grocery tax credit
BOISE – With support from all but one of North Idaho’s senators, the Idaho Senate on Thursday handily approved a boost in the state’s grocery tax credit, sending the legislation to the governor and promising all Idahoans at least another $10 back next year to offset the sales taxes they pay on groceries.
“I didn’t think it comes even close to doing what needs to be done,” said Sen. Mike Jorgenson, R-Hayden Lake, the lone North Idaho dissenter in the 27-8 vote. “And that is to do away completely with the grocery tax, and it needs to be done at the cash register.”
Backers of the bill said the state can’t afford a full repeal of the 6 percent tax on groceries this year – and it can’t afford politically to continue taxing groceries without offering more relief. Legislators, all of whom are up for election this year, have been promising relief since they raised the sales tax from 5 percent to 6 percent in a special session in August 2006, but last year couldn’t agree with Gov. Butch Otter on how to get it done.
“It comes down to priorities,” Sen. Shawn Keough, R-Sandpoint, told the Senate. “My question is, when are we going to put the families and the working people of Idaho as our first priority? Is this the best step? For me, no. It’s a bite; it moves us forward.”
The House earlier passed the measure 62-8, and Otter has hinted he’ll sign it into law. It includes a feature he insisted on last year – but that lawmakers then were unwilling to back – to give more relief to poor Idahoans.
While most Idahoans’ credit would rise from the current $20 to $30 next year on their income tax returns, those who make less than $25,300 for a family of four would get a $50 credit next year. Seniors would get an additional $20. And in subsequent years, the credit would rise $10 a year, economic conditions permitting, until it hits $100 for everyone.
It was those later years – when the cost of the rising credit would balloon to take in a growing portion of the state’s budget – that prompted opposition Thursday, as several senators pushed to amend the bill to include just the first-year increase or soften the later years’ effects.
“It does us no good to pass tax reductions that force us into budget cuts or raising taxes,” said Sen. Dean Cameron, R-Rupert, co-chairman of the budget-writing Joint Finance-Appropriations Committee.
Cameron proposed to amend the bill, but the move failed on a 10-25 vote after much debate. Jorgenson voted in favor of the motion, but all of North Idaho’s other senators opposed it.
Sen. David Langhorst, D-Boise, noted that lawmakers just approved a major tax break for a French uranium processing company. “And now we’re having a debate about whether we can afford to give some relief to Idaho’s families?” he said.
In the earlier House vote, most North Idaho representatives supported the bill, but four voted against it: Jim Clark, R-Hayden Lake; Phil Hart, R-Athol; Dick Harwood, R-St. Maries; and Shirley Ringo, D-Moscow.
In addition to raising the credit, the measure ends Idaho’s distinction as the only state that excludes the poor from its grocery tax credit. Under current law, those who make less than the threshold for filing income tax returns – $17,500 for a married couple filing jointly – aren’t eligible for the credit unless they’re elderly, blind or a disabled veteran. Under HB 588, those Idahoans could get the credit by filing a form.