Ahead of Idaho’s legislative session we sat down with some key lawmakers to ask about issues we’ve been following here at StateImpact Idaho over the last 18 months. We’re also looking at some of the issues that are sure to be debated once the gavel falls on Jan. 7, opening day.
We begin with Senate Minority Leader Michelle Stennett. She’s a long time Ketchum resident and was just reelected to her 2nd term in the Legislature.
We asked Sen. Stennett about Idaho’s personal property business tax. It’s long been a foe of business and industry groups. This session lawmakers may decide to start phasing the tax out. But some are concerned, especially local governments, about how to make up for that lost revenue.
Q: Should Idaho get rid of the personal property tax? If so, how could that happen?
A: I’m not totally convinced we should get rid of it, even down the road. I think what it should be is diversified. What I mean by that, there are some counties, that by their own efforts have become less and less dependent on personal property tax, and there are some that basically runs their government. You can’t uniformly pass or do something, especially sever or all at once, without doing it progressively – without having a major hit or collapse to those communities. If 50 percent of your budget comes from personal property tax and that runs your fire departments and police departments and keeps your basic government infrastructure in place, its public health and safety at risk when you do that. That needs to be considered.
Having said that, if we do wean off of that being primary income for some communities, we need to allow them time to find other revenue streams. We need to allow them, through law, to offer them options. If that’s local option taxes, if that’s a way to consolidate services, if that’s any number of things to offer them for communities to consider with their own commissions and their own mayors, we need to do that before we change the law. It’s not fair not to have some kind of back-fill, or a process or law to find revenue elsewhere.
Q: Do you think all options are on the table, with regard to phasing-out Idaho’s personal property tax?
A: It’s definitely going to be one of the bigger debates of the session. How, or what bills we might see, I haven’t seen anything yet.
Q: Last session lawmakers voted to lower corporate and individual income tax rates for Idaho’s top earners. Do you expect other tax cut proposals, or further exemptions this year?
A: I think it is the position of the governor to try and stimulate business. We have quite a few really wonderful, snapping on all cylinders, new businesses that decided that they wanted to have their nexus or base in Idaho, and have a really difficult time staffing people with enough education or skills to hire from inside the state. Then they hire outside, to fill their positions. There is this disconnect of businesses coming in – but if we want to keep an educated workforce, we need to be allowing for that to happen within the state.
Additionally, our infrastructure is crumbling. It’s seriously a problem in most states, Idaho included, and it’s an economic hit as well as a safety hit. It’s difficult in this economy, which is slowly recovering, to have this conversation. But we can’t be competitive if our rural communities can’t even get internet. That was one of the problems with expecting all schools to equally play ball with Prop 3, when some didn’t even have the ability to get online to be part of the process.
Talking about bandwidth, and the infrastructure – whether that is a utility infrastructure, technology, highways, bridges, we’re going to have to have a real hard look at ourselves to see what we’re doing. The thing is, if we can get past what it might cost us, and whether we’re financially prepared to do it – it does create a tremendous amount of jobs. It will be a boost in the economy. It will be a rejuvenation of creating all these skills jobs to bring our infrastructure up to speed. It could be a tremendous bonus economically if we could sink our teeth into it.
Now is the time to put people to work, in an area that we desperately need to be addressing. I’m not economist, but somehow we need to move our resources around to start making that happen. That will make us a much more desirable state to come to, and businesses will want to come in. rather than giving the tax breaks all the time, lets encourage them that we’re a fabulous place to come to because we’re moving forward and we’re snapping along, and that we show a desire to be on the cutting edge of things.
Q: Since Idaho voters overwhelmingly rejected a trio of education laws last fall, where does that leave lawmakers? Will there be new reform bills this session, or do you see this year as a cooling off period?
A: The difficulty, and unfortunate part, part of the revenue in the last two years with these laws in place, is schools were heading in the direction of complying and spending resources or lack of resources, on something to make it work. It wasn’t working. And now it’s not in place as a law anymore. It is a little stop-start, and where do we go from here.
I think more importantly, we need to bring all the stakeholders together to come to consensus and have that debate to say ‘here is what we can agree on, here is where we’ll have some difficulty’. That’s what should have happened the first time.
The education association is presenting a plan, the superintendents have a plan. I think once you start creating those creative juices, and get everyone to the table – whatever everyone can agree on, that’s probably the first things we’ll pass as a Legislature. The rest of it, that gets more contentious, will not probably happen this session. It will have to be a process. It’s that component of, everyone who is expected to do the work, needs to be part of the discussion. I think this time, we’re finally going to see that happen.
Q: Do you think we’ll see pieces of reform legislation this session?
A: There might be the easiest portions of it, that most people found workable and agreeable, we’ll probably see. The ripe fruit, the easy to pick stuff. The rest will take time, and as it should. You’re talking about a large part of the budget, and a lot of ideas on how that should go forward. The more we inform ourselves and have that conversation, the better we’re going to craft the legislation. I can’t piece it apart to know what that is.
Q: The state has been in and out of court over the last couple of decades over the way schools are funded. There is a new lawsuit working its way through the court system that contends Idaho is shirking its constitutional duty to provide free and uniform public schools. Is Idaho funding education to the best of its ability?
A: My colleagues, at least within my caucus, would feel like we’re not funding education adequately. Though, I have to say, I’ve heard nothing from either party on either side, that may be because I’m not on the education committee nor am I a teacher. I defer to my members who know more about it, about where we would be to correct legislatively, to make sure we’re not operating incorrectly, illegally or not clearly with our education system or our universities. I haven’t heard of any kind of bill to correct anything.
Q: Over the summer two panels met to study whether Idaho should expand eligibility for Medicaid, and whether to create a state-based health insurance exchange. Both panels recommended the state do both. How do you think the Legislature will weigh in here?
A: I haven’t been on any of the task forces or panels. It really hasn’t made much progress, partly because there was a real desire to wait for the Presidential election, and whatever the decision of the Supreme Court would be, that would allow us not to have to make those decisions. But now, here we sit, and now we’re behind. It’s best to at least try to be as proactive at putting a state plan together, instead of resisting.
Q: What about expanding Medicaid?
A: I probably need to know more about what dollars that impacts. How well managed it is. We all know that most plans of any kind have not-so-stellar records about being abused, or not being used correctly. When we have that conversation, we also need to be cleaning house, or we try to be more conscientious about how we use those resources and allocate those. And what would an expansion look like, how broad and how deep is it. I hesitate to say whether I see that or not, without the bigger picture. That’s where the debate will be I think.
Whenever we’re talking about businesses coming in and we create rules and laws from which they should abide, that we always keep public health and safety and welfare in mind. I think sometimes we forget the human component in that because we’re so desperate to make sure we’re economically solvent. I understand that, and that’s important, but not at the risk of peoples health or safety. There should be a balance, and protect our constituents on a real basic level.
Q: Does that mean restoring budget cuts that have been made over the last few years?
A: I don’t think it benefited us to be as draconian with Health and Welfare budget, particularly as it pertains to mental illness. We just paid for it in our correctional systems and people who are more dangerous on the streets to themselves and to other people. That’s a classic example of where we did something that really had a detriment to public health and safety, not only to the person on the street, but to the person who is harming himself and others around him because he needs assistance.
This interview has been shortened and edited.