Idahoans need a pay raise — in the form of state tax cut

Idahoans need a pay raise — in the form of state tax cut

by
Fred Birnbaum
October 12, 2016
Fred Birnbaum
Author Image
October 12, 2016

As you may have heard, for the first three months of state fiscal year (SFY) 2017, actual general fund revenue is running ahead of the projections made during the legislative budget process. For the first three months, revenue is 2.9 percent higher than projections for the current SFY and 8.3 percent higher than the same period last year.

Keep in mind that, when the legislative session ended last March, the general fund appropriation represented an 8 percent increase over the prior fiscal year.

Yes, I know the Legislature presented its increase as 7.4 percent, but lawmakers didn’t count the reduction to revenue for additional fire suppression money as appropriations, which they should have.

So, we have an appropriated general fund increase that balanced the budget and increased spending in the range of 7.4 percent to 8 percent. Now, revenue is running higher than was needed to cover that whopping increase in spending.

The usual suspects see it as a way to spend even more money. Naturally, the targets are education or roads.

How about providing a pay raise to the average Idahoan?

Why do the people who provide the revenue growth, which sustains this high spending, get left out of the conversation — the ordinary Idahoan, the farmer and small businessperson?

You see, while the state government has been rolling in money the past three years, Idahoans have face increased costs for things such as health care. If you are a small business in Idaho, premiums will increase more than 20 percent for your 2017 policy.

In contrast, look at how state employees have fared: for SFY 2017, they were given a 3 percent merit increase, and taxpayers picked up all of the 9.3 percent health insurance premium increase; for SFY 16, there’s the same 3 percent merit increase, plus full tax coverage of the 6 percent premium increase; and in SFY 2015 the 2 percent increase (half of it, one-time) was overshadowed by taxpayers picking up a 15.9 percent premium increase. Since 2015, state employee medical insurance premiums have been frozen and that year the average premium increased by only $42 per month.

There we have it, an 8 percent cumulative raise not reduced by any medical premium increase, the cost of which, cumulatively, is $3,340 per year in 2017.

Already, agencies that have submitted their budgets for SFY 2018 are asking the taxpayer to pick up the anticipated $1,220 health-care premium increase.

Before there’s any talk of increasing spending, the first priority should be providing some tax relief to the generous Idahoans footing their own bills and the bills for state employees’ raises and health-care premium freezes — stuff they can only dream about.

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