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Legislative session was ‘disappointing’ due to no tax relief, more spending

Legislative session was ‘disappointing’ due to no tax relief, more spending

Wayne Hoffman
March 24, 2014

Now that the Legislature has gone home, I am left with just one question: What the heck were they thinking regarding taxes and spending?

This Legislature, with a supermajority of Republicans, had ample opportunity to dramatically cut taxes and keep spending in check. It did neither.

Gov. Butch Otter proposed $30 million in tax relief. He didn't say what kind of tax relief; he left the details to lawmakers. He should have worked harder for it. He should have been specific about what he wanted and why.

The Legislature built from that rocky foundation; the only tax cut bill to be introduced was one from Rep. Mike Moyle. R-Star, calling for reductions in income tax rates. But his bill was, well, wimpy. Its tax cuts were conditioned on certain state revenue benchmarks; if those revenue goals were not reached, the higher tax rates would remain in effect.

Not the best tax policy in the world, but strangely, the only broad-based tax cut on the table this year. The bill passed the House 54-13, but got no Senate hearing.

Another bill, to cut personal property taxes by exempting up to $250,000 in valuation, failed to advance at all. And a bill to eliminate the sales tax on groceries didn't even earn a hearing to be introduced.

These tax cuts were more than affordable. The money was there to get the work done. In fact, by the Legislature's accounting, our so-called frugal government pushed spending up 5.6 percent, or about $155 million. In truth, once you pull back all the spending gimmicks, spending rose by around a whopping 7 percent, and our state general fund is hovering near a record $3 billion.

The state had enough money to fund raises for teachers, raises for state employees, cover the costs associated with rising health care costs, plow millions of dollars into public schools, higher education, corrections, water projects and buildings and restock savings accounts—and yet the Legislature couldn't make tax relief, a leading component of the Republican platform, happen in a Legislature controlled by a supermajority of Republican lawmakers and a two-term Republican governor? In an election year?

Indeed, even the grocery tax proposal had wide bipartisan support. Democrats and GOP members signed on as supporters and yet the plan went nowhere. Isn't it strange?

What did pass? Corporate welfare legislation granting tax relief only to those special enough and big enough to petition the Department of Commerce for favored status. In a state like Idaho, where opportunities abound to really lift Idahoans up from poverty, keep more money in the hands of employers, employees, homeowners and consumers, this is the best we can do? Really?

Each legislative session deals with controversial issues that impact people in ways and big and small. Some of those issues are blown up by journalists who love the specter of controversy and division. Few issues touch folks as much as taxes, and Idaho is well known to fail on many measures when it comes to how much it harvests from its citizens and businesses.

The nonprofit Tax Foundation notes that Idaho has the worst structure of all its neighbors when it comes to taxes, making the state unattractive to new business as well as making it harder to retain the companies and workers who live here. Such a statistic only contributes to suppressed wages and the desire of young people to live elsewhere.

Legislative sessions, in states run by people who contend Big Government harms people and makes lives difficult by taking too much money from them, ought to be able to do better for people than this one did.

This session was, in a word, disappointing.

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