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Senate kills Moyle’s tax plan, may be looking for $150 million for roads

Senate kills Moyle’s tax plan, may be looking for $150 million for roads

Dustin Hurst
April 1, 2015
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April 1, 2015

That sound you just heard was politicos groaning about a lengthened legislative session at the Capitol in Boise.

After the Senate Transportation Committee approved a massive tax plan widely seen as a key piece to the end of the 2015 session, the full Senate declined to take up the plan, effectively killing it for the year.

What happens next is anybody’s guess.

The plan was the brainchild of House GOP leadership. It cut income tax rates from 7.4 percent to 6.7 percent, ended Idaho’s tax on grocery and raised fuel taxes by 7 cents a gallon.

The fuel tax would have produced about $65 million a year for roads.

The bill also would have ended the grocery tax rebate, which refunds Idahoans for the taxes they pay on groceries.

Senate Majority Leader Bart Davis, R-Idaho Falls, told colleagues during the move to send the bill back to committee that the GOP caucus had no flavor for the measure.

“It will not be reconsidered this session,” Davis said on the Senate floor. Senators agreed without dissent.

Sen. Marv Hagedorn, R-Meridian, didn’t offer a definitive reason for the kill, but said sticking several massive tax policy shifts into a single bill likely contributed.

“Some people liked ending the tax on groceries,” Hagedorn said. “Some people liked the flat income taxes. Others liked the gas tax. Maybe not put all together.”

Plus, Hagedorn said, the $65 million for roads might not have been enough to satiate some senators. “I think somewhere between $135 million and $150 million,” Hagedorn said. “That’s just my personal feeling. That’s where I think we need to go.”

One of the key players in the effort to fund more funding for Idaho roads and bridges, Meridian Republican Rep. Joe Palmer, told IdahoReporter.com he isn’t sure why the Senate killed the plan.

“That’s just the way the system works,” Palmer said. “We have a process.”

Looking forward as lawmakers wind down their work, Palmer isn’t sure how the Legislature will find money for roads.

Two possibilities await Senate hearings: Palmer’s bill to raise $20 million through auto and motorcycle registration fee hikes, plus another measure to shift Idaho State Police funding from gas revenue to the general fund.

That plan, which also includes a trigger to put more general fund cash toward roads with enough revenue growth, could add up to $26 million a year.

Combined, the bills fall well short of the $260 million backlog the Idaho Transportation Department says it has for repairs. The two bills also fail to hit even the $100 million they would have generated in concert with Moyle’s measure.

“We’ll see what they do with those bills,” Palmer said.

Hagedorn offered a quick, if partial, verdict. “$20 million isn’t going to cut it,” he said.

Complicating matters further, Idaho Gov. Butch Otter said in January he wouldn’t accept legislation that pits school funding, the top expense of the general fund, against roads.

To Palmer’s point, Hagedorn said the exercise is part of the end-of-session jockeying. Because the House hadn’t sent any other road funding bills to the Senate, Hagedorn said House members didn’t have a clear read on what senators might want to pass.

“They haven’t hadn’t the chance to take the Senate’s temperature on funding," Hagedorn said.

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