Taxes, taxes, taxes!

In response to some complaints that I heard from residents at a recent District 18 Legislative Forum, I would like to provide the following historical review of Idaho tax policy.

Before the 2006 Special Session here is what Jim Risch had to say (link here):

“The net result of my proposal is a $50 million dollar tax cut that will take affect this year and every year. The maintenance and operations levy is the driver of property tax increases and this will remove the cause of the enormous increase in property taxes when values escalate. Idahoans should not have to worry about being driven out of their homes by property tax increases just because they had a huge rise in the value of their home. The primary beneficiary of this property tax relief is middle-income Idahoans.”

After the 2006 Special Session here is what Jim Risch had to say (link here):

“I am overwhelmed by the two-thirds vote by both the House and the Senate for property tax relief. Difficult issues usually result in a close vote, but Idahoans saw that this plan provides immediate and permanent property tax relief while substantially helping education."

Last summer, here is what House Republican Leadership had to say about tax exemptions:

"I'm going to work through it, you bet," [House Tax Chairman Dennis Lake] said. "There are issues on the list that obviously I don't agree with, but still, we'll work through them." (link here)

"Most of these exemptions have a strong constituency politically so the ability to go and do a massive overhaul - don't hold your breath," said Rep. Scott Bedke, R-Oakley. (link here)

Here is what was said this week by those same folks (link here):

"What's broken? We have a tax system that is bringing in more money than we are spending," [House Assistant Majority Leader Scott Bedke] said.

"What I have heard from this committee is, once an exemption is established it should stay established," Lake said.

And finally, lets consider the thoughts of these same lawmakers last year during a debate on a bill that would have given a huge tax break to business (link here):

Rep. Scott Bedke, R-Oakley, sounded a similar note. “You need to ask yourself who is demanding the services” that impact county budgets, he said. “Is it ag? Is it mining and timber? I don’t think so. It is residential.”

"Yes, for this year, we do shift some taxes,” said House Tax Chairman Dennis Lake, R-Blackfoot.

First, let me make a few observations:

1. The beneficiaries of the 2006 Special Session property tax bill has not been "middle-income Idahoans."
2. The 2006 Special Session property tax bill has not provided "immediate and permanent property tax relief ."
3. Attempts to reign in the dozens of business tax exemptions were half hearted.
4. There has been a systematic and calculated agenda to continue to shift more of the tax burden on to homeowners.
5. Current House Majority Leadership is more interested in offering tax relief to businesses than they are to working families.

Let's be clear, the only way that homeowners will see real tax relief is if the tax burden is shared more equitably. This means that we need to eliminate some of the sales tax exemptions that are in reality nothing more than corporate welfare. It is undeniable that this will not occur as long the Idaho Legislature continues to be led by the current leadership team which takes its marching orders from the likes of IACI and the Idaho Association of Realtors. This is not political rhetoric, but rather a simple observation of quotations made by these legislators. I've said it before and I will say it again, I will not support legislation that will have the intended consequence (whether expressed or implied), of shifting more of the burden to Idaho families. I am committed to ensuring that Idaho is best place to do business, but doing so on the backs of Idahoans isn't good for anyone in the long-run. The approach must be worker-centric and business-centric, not one or the other. Workforce development and training must be our aim, not more tax cuts. If there are highly qualified individuals, there will be an employer ready to offer them a good job. This helps workers and it helps business.

2008 Legislative Preview

In preparation of the 2008 Legislative Session, I’ve put together the following legislative preview. In this preview you will find the issues that I plan to work on as well as other major issues facing the Idaho Legislature.

Legislation I will be sponsoring:
Early Childhood Education – As an extension of HCR18 from last year’s session, I will be working with a bipartisan coalition to move forward on establishing a Quality Rating System for Idaho child care settings. This is a crucial step in improving early learning and safety for children throughout Idaho. By passing this legislation, parents will be better equipped with more information to choose the right child care provider for them and their children.

Permanent Absentee Ballots – In conjunction with the Idaho Association of County Recorders and Clerks (affiliate of the Idaho Association of Counties) and bipartisan co-sponsors, I will continue to work on allowing Idaho voters to opt-in to getting permanent absentee ballots. By opting-in, Idaho voters would be able request that in all future elections (or until they move or become ineligible to vote) they receive an absentee ballot in all elections. This will cut bureaucracy, improve access to voting (especially for elderly), and increase efficiencies in our democracy.

Credit Report Freeze – In an attempt to protect consumers I will be joining a bipartisan group of legislators seeking to give consumers the option to freeze their credit reports in the event of identity theft.

Major issues for the legislature:
Alternative Teacher Compensation – Both Superintendent Luna and the Idaho Education Association will present legislation that would change the way public school teachers in Idaho are compensated. The cost of doing so and the potential impacts upon the teaching profession and children’s education will be paramount.

Local Option Tax/Road Funding – Once again the Coalition for Regional Public Transportation will be bringing legislation that will permit local communities to tax themselves for public transportation. This year’s bill, however, will also include a provision which would permit taxpayers to choose to fund road projects as well. By bundling road and mass transit into this bill, the hope is to expand the number stakeholders and improve the chances of seeing this bill finally pass the House Revenue and Taxation Committee and subsequently the legislature.

Water – While admittedly my understanding of the water debate is limited to a rudimentary issue of supply and demand (and senior versus junior water rights), this is issue will once again rise to the surface. Stay tuned.

Personal Property Tax – Once again the Idaho Association of Commerce and Industry (IACI) will attempt to eliminate the personal property tax. Personal property tax is a tax paid by businesses for property used in the production or operation of the business. This proposal comes with a hefty price tag. The fundamental question facing this proposal is whether or not legislators want to give businesses another tax break at the expense of the individual taxpayers. A secondary proposal may be offered limiting the scope of the elimination with the goal of targeting small businesses.

Sales Tax on Groceries – There will be myriad of proposals again this session looking to either eliminate the sales tax on groceries and/or increase the grocery tax credit.

Property Tax – Governor Otter will likely propose a change to Idaho’s law with regard to the assessment of property taxes. A constitutional amendment may be necessary.

Growth - Impact fees and other tools to limit or change the way growth is managed are top priorities in the Treasure Valley and other parts of the State. Keep an eye on this one.

Health Insurance - With healthcare costs skyrocketing and more families without insurance, lets hope the legislature steps up and addresses this issue. I will be sure to support any responsible proposal that helps with the cost of healthcare.

Closed Primaries - As with the lawsuit filed last year, it is highly likely that the legislature will hear another bill that would close primaries. More on this later in the session.

There are many other big issues, but in the interest of time, I’ll stop there for now. Stay tuned to this blog for more information and updates throughout the session! As always, if you have questions or comments, please let me know.