Tax relief is an issue of fundamental fairness – Idaho is flush with your money

Tax relief is an issue of fundamental fairness – Idaho is flush with your money

by
Fred Birnbaum
December 7, 2016
Fred Birnbaum
Author Image
December 7, 2016

It is difficult to miss some relevant fiscal facts as the 2017 legislative session is about to begin. The principal fact: For the first four months of the fiscal year state revenues are running higher than projections. Therefore taxpayers should be provided with some relief by the 2017 legislature.

Meaningful tax cuts for Idahoans is an issue of fundamental fairness.

To define “fundamental fairness” let’s go back to the 2016 legislative session. During that session the legislature approved an 8 percent state-fiscal-year (SFY) 2017 general fund spending increase.

Current SFY collections, through October, are $37 million greater than projected and $98 million ahead of the same period last year. Add those figures to SFY’s 2017’s beginning cash balances of nearly $71 million. A simple picture emerges: The state is flush with your money.

Of course, the usual special-interest suspects will emerge and insist that this surplus roll out of government coffers and into their pockets – bypassing the Idaho taxpayer entirely. Of which suspects do I speak, well, state agencies for one.

State agencies have submitted their budget requests for SFY 2018. Combined, they have asked for a general fund increase of more than 7 percent over SFY 2017 (the current fiscal year). However, it is important to keep in mind, SFY 2017 contained an extra payroll period and other one- time spending. Strip this out and their actual requests equal another 8 percent increase – and, yet again, before Christmas Idaho taxpayers would be left holding a lump of goal.

What makes these large increases so difficult to swallow is, like most other Americans, private-sector Idahoans have seen huge increases in their health insurance premiums, while state employees have had their premiums frozen since 2015. So most Idahoans are paying more for their own health insurance as well as paying the premium increase for state employees via their tax dollars.

Let’s put some flesh on how large this disparity is. A single state employee pays $58 per month for a traditional healthcare plan with $350 annual deductible and an out-of-pocket maximum of $4,300. A similar plan (Blue Cross Gold 500) for a small business in Idaho, would cost a middle-aged employee (45 years old) $469 per month with a $500 deductible and an out-of-pocket maximum of $5,500.

This year state agencies will again seek to saddle taxpayers with the increase for the health insurance cost increase, which is an estimated $1,220 for the upcoming fiscal year. Further, state agencies will ask taxpayers to cough up more money for a raise for state employees.

In addition, given recent weak investment returns, a higher percentage of general fund dollars will be diverted to top up the public-employees pension plan. Most ordinary Idahoans don’t even qualify for pension.

So when you are told that tax relief isn’t needed or is some give-away to the rich, please recall whose money it is and that you are funding increasingly generous benefits while your own daily costs continue to escalate.

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