Rep. Mike Moyle: To Incentivize Job Creation, Lower Income Taxes

Idaho Legislature / State of Idaho

The Idaho Legislature convenes January 9th.  In advance of the session, we interviewed several legislative leaders and asked them about Idaho’s economy and what the state could be doing to boost growth and job creation.

Rep. Mike Moyle (R-Star) is Majority Leader of the Idaho House of Representatives.  Moyle farms and manages farm ground, and is part owner of a storage facility, among other business interests.  He was first elected in 1998.

Q: What are your personal priorities for the upcoming session?

A: I’d like to see us incentivize job creation in the State of Idaho, and that includes looking at our tax structure and how we tax individuals and corporations within the state.  We need to make some changes there so we’re more competitive with surrounding states.  I’d like to see us try to move down that road a little bit.

Every surrounding states have got a better climate to do business with, or to live in, or a lower tax structure on the income side than Idaho, which is not a good place to be when we’re trying to get businesses and jobs to come here.

Q: So you think the state could do a lot for itself by lowering tax rates.

A: Exactly.  When a business comes to Idaho, the first things they look at is the tax rate.  When they haul up Utah at 5 percent and then Idaho at 7.8 – I mean, if you’re a businessman, what are you going to do? Even though we have some other incentives that are helpful to draw businesses here, it is really hard when the first thing they look at is the corporate or individual rate.  We just don’t compete.  It would sure be a lot easier to get more business and create more jobs if we had a tax structure that was more conducive, more competitive with our surrounding states.

Q: Is this the time to reduce revenue through a tax cut?  I’m not an expert, but it seems that a cut would have a quick revenue impact, whereas the job creation impacts would take longer to realize.

A: I think you can look at that two ways.  It’s the chicken or the egg.  If you want to get out of this, you’re going to have to do something to create the jobs, and to create the jobs, you’ve got to be more competitive.  I don’t know that it’s necessarily going to have as big an impact on the budgets as some think.  I think we can do it in small bites where we don’t impact education and other budgets.  I think there’s a way we can do it in a fiscally sound way and still accomplish our same goal.  It may take us a little longer, but at least we’ll be heading in the right direction, and I think it would send a good message.

Q: Are you able to talk about the specifics of that bill that you’re planning to introduce?

A: Oh, not yet.  I’d love to, but not yet.  We’re trying to come up with a deal that we can get enough buy-in.  Some of the stuff that’s being talked about, we might have to change it around.  Right now it’s probably better that I say – there’s a lot of people looking at it, and there’s some pretty good ideas on the table, and hopefully we can come up with something.

Q: Will it will differ substantially from the bill that you introduced last session?

A: It could.  Some of the places we’re looking at would be substantially different than that.  There actually is some talk about looking at the whole thing overall – looking at some of the exemptions and other issues, to lower the rate and flatten out the burden.

Q: I’ve heard members from both sides of the aisle say this isn’t the right time to think about cutting taxes.

A: You’ve got to do something to incentivize the businesses that are here to stay, and to incentivize those that aren’t here to come here and be here.  And when you’re not competitive with anybody that’s in your surrounding state – that’s a real problem.  People are not going to come here.  Corporations are animals that will move where they can make the most money.  It’s a sad fact, but look at all the businesses that are moving out of this country.  But the fact is, when your rates are too high, you’re not competitive and they’re going to go somewhere else.

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Q: It sounds like this is the most substantial job creating thing that you believe the legislature could do, but do you have other ideas on that front?

A: I think there are other things the legislature can do to help create jobs.  I think we’ve got some good incentives that we need to promote more, so that businesses know we offer them.  We’ve got the Small Employer Incentive Act, we’ve got the Hire One Act from last year.  There’s a lot of available tools that we ought to be selling and using to draw businesses here.  The speaker has asked some individuals to bring bills forward, but they’re not my bills to tell you about.  There are some other ideas that are floating around out there to help incentivize job creation and help the economy grow, so you will see some more of that this year from the legislature.

Q: I’m also curious about your expectations for the budget process.  What kind of budget you think we’re going to see from the governor?

A: Well, I think the governor is going to backfill some of the holes that have been created with these tough times.  I’m hopeful that he’s going to backfill some of our rainy day fund so that we can be prepared if things get bad again, as bad as they were.  I think the governor is going to try to take care of the education side and fund some of those incentives that are out there. I think you’re going to see a pretty broad-spectrum budget from the governor that tries to replenish our reserves, fill the holes that were made with the budget cuts the last few years, and increase the funding on education.  And I’m hoping that if there are extra funds after we take care of those other issues, we can do some reduction in taxes.

Q: In your mind, the reduction in taxes does come after addressing the needs that were created in the recession and in previous rounds of budget cutting, then?

A: I think it would be disingenuous to not say that we need to go out there and take care of some of those holes that were created with the tough budgets the last few years.

Q: Are there specific areas that you feel need attention ASAP?

A: Our reserve accounts are down, and I think we need to backfill some of those so that we are prepared if things don’t get better.  In education, I think we need to put more money into K-12 in particular.  You’re going to be forced to do some stuff in regards to Health and Welfare.  Every division, every aspect of government, is going to want more money, and I think you’ve got to be careful because some of them I don’t think you want to backfill.

Q: When you say the state will be forced to spend more on the Department of Health and Welfare, are you referring to rising enrollment for programs like Medicaid?

A: Exactly.  You’ve got rising enrollment in Medicaid, and that’s been a concern.  The legislature worked on that last year, but that’s going to be an ongoing debate.  There will be more things looked at there – how we can control the rising costs of Medicaid and how it affects the budget.  Those dollars take dollars away from other areas, like education, and we’ve got a fine balancing act.

Q: I’ve heard from a number of people that they don’t expect further Medicaid cuts this year.  Are you saying there could be more cuts?

A: I don’t know that there will be further Medicaid cuts, but they will still be looking for ways to save money and prevent the increase in costs on the Medicaid side.  I think it will be a continuing debate for the years to come until we figure out how to get those costs under control, and figure out exactly what the impacts of Obamacare are going to be on the state budget.

Q: While we’re talking about health care, let’s talk about the health care exchange discussion that’s ahead.

A: There’s a lot of push-back in the legislature.  Under Obamacare, there’s a deadline to have instated these exchanges.  The problem is the federal rules in regards to that exchange.  An exchange is a good idea, where people can go on and get their health insurance and do what they need to do.  The problem is that the rules the feds are sticking down basically force you to do exactly what they want.  Therein lies the pushback from a lot of the legislators.  Therein lies most of the debate: whether we can find a way to create an exchange that accomplishes what the state wants and the feds want, but doesn’t totally encompass everything that Obamacare wants.  And I just don’t think you can get there, currently, with the current federal rules.

Q: Can you give an example of exactly what you wouldn’t want an Idaho exchange to do?

A: I’m concerned that if that exchange is done wrong, you could end up putting more people on Medicaid and forcing up the costs to the State of Idaho.  So if we’re basically creating an exchange that incentivizes or helps put people on Medicaid, that’s a disadvantage to the State of Idaho and it’s going to drive up costs that we’ve already identified as a big concern to the budget in the future.  Things like that.

Q: You alluded to something earlier that I want to follow up on.  You said if there is available revenue, a lot of people will have their hands out trying to get more money this session.  You were making the point that you think there are some areas that should not be refunded at previous levels.

A: I think that some of the reductions that the state made as we have cut the budget, some of them need to stay in place.  I think that as we look at this extra revenue and as people come in to try to expand budgets, there are some that probably need some help — prisons, for example — but there are some that probably ought to stay where they’re at.  And that debate will happen as the legislature is there, and as they look and see — if there are extra revenues — what to do with them.

       This interview has been edited and shortened.