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Eye on Boise: Labrador ups ante on tax-cut proposals

Rex Rammell campaigns for governor of Idaho in 2010 with the help of a giant inflatable T-Rex dinosaur and a decorated RV; Rammell, disgusted with Idaho politics, is now moving to Wyoming. (Betsy Russell / The Spokesman-Review)

Idaho gubernatorial hopeful Raul Labrador, the 1st District GOP congressman, released his economic plan late last week.

On top of the $900 million in tax cuts he’s already been advocating, he’s adding another $120 million-plus. Labrador’s “5-5-5 plan” to cut personal and corporate income tax rates and Idaho’s sales tax all to 5 percent, plus his proposal to eliminate the sales tax on groceries, already added up to about a $900 million-a-year hit to the state budget, more than a quarter of Idaho’s annual general fund budget. In his newly announced plan, he also calls for phasing out the personal property tax on business equipment.

In 2012, that tax brought in $141 million, but then the Legislature exempted the first $100,000 per business per county. That eliminated the tax entirely for 90 percent of the companies that paid it but kept in place 80 percent of the revenue, with just the largest companies paying. Where others – including rivals Tommy Ahlquist and Brad Little – have advocated increasing the $100,000 exemption to $250,000, which would cost the state general fund about $9 million a year, Labrador’s plan calls for phasing out the tax entirely.

“This tax must go,” Labrador said in his proposal. “As governor, I’ll work with the Legislature to once and for all get rid of personal property taxes and its cumbersome paperwork requirements.”

Labrador also is calling for a moratorium on creating new urban renewal districts in Idaho, eliminating occupational licensing programs “that protect special interests, not the public,” and creating a new Governor’s Office of Innovation and Economic Competitiveness. Labrador’s campaign dubbed his proposal “the first plank of his conservative vision for a stronger Idaho.”

Labrador also took the opportunity in his proposal to bash his two leading GOP opponents for the GOP gubernatorial nomination, Lt. Gov. Little and businessman Ahlquist, while not naming them, but suggesting they “support economic policies that give preferential treatment to their friends and business partners.”

I analyzed all three candidates’ tax proposals and their price tags in a Dec. 3 article. My tally put Little’s tax-cut proposals at $115.9 million in the first year and nearly $200 million a year after four years, and Ahlquist’s at $631 million a year. Labrador’s, which at that point was at $900 million, is now up to $1.02 billion. That’s nearly 30 percent of Idaho’s $3.5 billion-a-year general fund budget. Here’s the breakdown of Labrador’s proposals:

    Lowering Idaho’s individual income tax rate to 5 percent would slash $465 million a year from the state general fund.

    Lowering the corporate income tax to 5 percent, from its current 7.4 percent, would add another $73 million in cuts.

    Cutting the sales tax from the current 6 percent to 5 percent would cost the state general fund $298.4 million a year.

    Eliminating the sales tax on groceries would cost $66 million a year. Current proposals to eliminate that tax, along with the grocery tax credit, have a fiscal impact of $79 million a year; Labrador’s is lower because he’d also lower the sales tax from 6 percent to 5 percent.

    Eliminating the personal property tax on business equipment, which Labrador wants to phase out, would cost more than $120 million a year once fully implemented. Currently, the state general fund pays out $18.9 million a year to counties to make up their lost revenue from the $100,000-per-county exemption. Labrador didn’t say if he’d have the state make up the counties’ losses when he phased out the tax.

Labrador also says he would “end tax giveaways that create an uneven playing field for Idaho businesses” but names no existing tax breaks he’d eliminate.

Rammell running again

Former Idaho gubernatorial candidate Rex Rammell has announced a new campaign for governor – of Wyoming. Rammell, who ran unsuccessfully as a Republican for Idaho governor in 2010 and as an independent against Sen. Jim Risch for the U.S. Senate in 2008, told the Jackson Hole Daily News and Guide that his campaign platform rests entirely on trying to force the transfer of federal public lands from the U.S. government to the state, including threats to “forcibly remove federal officials from their offices on Wyoming’s public lands.”

“The thing that I’ve got going for me is Wyoming’s in a crisis,” Rammell said. “With all the people that are leaving the state, all the state jobs that had to be cut and a $700 million shortfall, I think people will start listening to a candidate that is willing to take bold moves.”

Rammell gained notoriety in Idaho after a herd of domestic elk at his eastern Idaho hunting ranch escaped in 2006, prompting then-Gov. Jim Risch to order the escaped animals shot to avoid spreading disease to the state’s wild elk herds. Rammell fought an extended but unsuccessful court battle over that incident, culminating in an Idaho Supreme Court decision against him. He also launched a political career out of it, first running against Risch. Rammell also made news in Idaho for an elk-poaching conviction and battery and jury-tampering charges.

In 2012, he lost a GOP primary for a state legislative seat in Idaho County, then announced he’d “given up on Idaho” and moved to Wyoming. At the time, he told Eye on Boise, “I probably was too optimistic that I could turn Idaho into Wyoming.”

When he campaigned for Idaho governor, Rammell used a 16-foot inflatable green Tyrannosaurus rex as a campaign gimmick, pulling it on a trailer behind his campaign RV for parades and rallies, and saying, “T-Rex is going to take a bite out of the feds when he becomes governor.”

Dominoes fall

toward Crapo

The news that longtime Utah Sen. Orrin Hatch will retire, rather than seek another term, not only is drawing attention to a possible Mitt Romney run to replace Hatch, it’s also focusing attention on Senate seniority dominoes and chairmanships.

Hatch chairs the Senate Finance Committee, which oversees taxes, trade, health care and entitlements. When he departs, Roll Call reports, Sen. Charles Grassley, R-Iowa, the current Senate judiciary chairman, would be in line for the finance chairmanship, if he wants it. If he does, Sen. Lindsay Graham would be in line to replace Grassley as judiciary chair. But if Grassley opts to stay with judiciary – which will have numerous judicial appointments to vet along with much other business – it’s Idaho Sen. Mike Crapo who’d be next in line for the finance chairmanship.

Crapo now chairs the Senate Banking Committee, a post he just took on this year.

Both Roll Call and Politico reported on the potential last week. Grassley, questioned by Politico, declined to say whether he’d stick with judiciary or switch to chair finance in early 2019. “You know what? You need to ask me that question in about a year from now, or maybe 10 months from now,” he said. “There’s so many things that enter into that. No. 1, will we still be in the majority?”

Crapo declined to comment on the chairmanship possibilities but did say, “Senator Hatch has been a leader in the Senate throughout his career on many important issues. While he has announced plans to retire at the end of the current term, I am confident that, as chairman of the Finance Committee, Senator Hatch will not rest as he brings his impressive career to a close. During that time, I will continue to work with him closely and collaboratively.”

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