Idaho policymakers are celebrating a recent study that shows the state’s financial position is among the top 10 in the country. Specifically, researchers from the Mercatus Center at George Mason University found that Idaho ranks ninth nationwide when it comes to financial solvency. The study, released July 11, is an annual checkup of states and their ability to meet short- and long term financial obligations.
Unfortunately, the Mercatus ranking doesn’t consider what took place in the most recent legislative session, wherein lawmakers voted to take on a great deal more debt for a variety of projects, including highways and bridges and the purchase of a state office complex. As a result of those decisions, it’s easy to predict that the state’s financial position will slide next year when Mercatus revisits state debt and financial well-being.
The fact is, Idaho does OK, but it can and should do a great deal better managing taxpayers’ money. There’s no reason whatsoever that the governor and state Legislature need spend as much as they do. Though it hasn’t been reported in the legacy media, Idaho’s general fund spending increased by more than nine percent the budget year that started July 1. (Because of accounting gimmicks, the “official” state government reports put the spending increase at 5.4 percent, which isn’t truthful.) Indeed, lawmakers arrived in Boise last January with a sizable budget surplus and spent nearly every available dollar.
Real, meaningful tax relief has been put on the backburner, and what minor tax relief has been granted during the last 10 years has been eaten away by an increase in state fuel taxes and registration fees and by property tax increases at the local level.
And though Florida, North and South Dakota, Utah, Wyoming, Nebraska, Oklahoma and Tennessee all out-perform our state in the Mercatus study, Idaho is distinctly hobbled by having higher, more confiscatory taxes than other states. Idaho also has lower wages, which hinders the ability of Idaho residents to live, work, play or retire here.
Consider, for example, the fact that Idaho taxes every single dollar earned, and on those wages earned, a person will pay higher taxes here than they do in most of our neighboring states. In fact, anyone earning more than $11,000 in taxable wages finds himself in Idaho’s top tax bracket. That means, as I have noted before, my 16-year-old son, who works part-time at a Boise burger joint, will likely find himself in the state’s top tax bracket. Idaho’s elected officials have neglected that nonsense for years, but it should be a priority when a new governor takes office in 2019.
Though some lawmakers will go out of their way to pat themselves on the back after reading the Mercatus study, legislators should seriously consider the ongoing damage Idaho’s fiscal policies continue to do. Idaho still falls far short on wise fiscal policy and that reality holds back Idahoans and their ability to better their lives.