The talk of raising, lowering and changing various taxes in the state has already started with a couple of weeks before the 2012 legislative session kicks off. Each lawmaker I spoke with said Idaho’s corporate and income tax rates could stand to be lowered. Many differed on when and how to do it.
Idaho Legislature / State of Idaho
Rep. Mike Moyle is a Republican from Star, Idaho
Idaho’s corporate tax rate is 7.8 percent and the individual rate is a graduated system ranging from 1.6 to 7.6 percent. Many Republicans, including Rep. Mike Moyle (R-Star) say Idaho’s tax rates are hurting private sector growth. “We’re higher than every state around us,” Moyle says. “Which is not a good place to be when we’re trying to get businesses and jobs to come here.” Moyle is working on a bill for the 2012 session to lower Idaho’s tax rates. He wouldn’t get into specifics.
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.
Idaho Legislature / State of Idaho
Sen. Elliot Werk (D-Boise) was first elected in 2002. He’s one of seven Democrats in the Idaho Senate and made our list of most influential state lawmakers. On his website, Werk calls Idaho’s economy a “dismal mess”. He says the key to turning things around is education.
Q: What are your funding priorities?
A: The legislature needs to focus on funding the basic element that increases help for the middle class, which is education. Both K-12 and higher education. The shameless slashing of those budgets will do lasting and long term damage to Idaho’s economy unless that trend is reversed.
Q: Many of your Republican counterparts have also said education is their top priority, including the governor. Do you think the majority party has done an adequate job of funding education?
A: Well, I appreciate statements from the governor and my Republican counterparts indicating they prioritize education, the reality is their votes and their actions don’t show that in any way, shape or form. We really have a crisis in Idaho in terms of our overall structure for revenues. And the Republican Party has steadfastly refused to address the issues we have with revenues and inequities in the system so they have piled on cuts onto the middle class while they continue to enrich their benefactors continually with more breaks and more exemptions and more giveaways. Continue Reading →
Idaho is among the states where employment has dropped most significantly compared to its pre-2009 peak level, as this interactive graphic from The New York Times shows. The accompanying article points out that the drop in employment has been most dramatic in some of the states that experienced the greatest fluctuations related to the housing boom.
One fact that stands out is how far employment has fallen in some of the same states where the residential real estate prices rose the most during the boom and fell the most during the bust. – The New York Times
The Bureau of Labor Statistics numbers also put Idaho toward the bottom of the list in terms of the change in employment the state has seen since its job figures hit their low point. Idaho falls in the middle of the pack in terms of employment change since November 2010, with .8 percent growth.
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.
Idaho Legislature / State of Idaho
Sen. Dean Cameron (R-Rupert) is chairman of the Senate Finance Committee and co-chairman of the Joint Finance Appropriations Committee. JFAC is the committee that shapes the legislature’s version of the state budget. He’s been a lawmaker since 1991.
Q: How will JFAC approach the budgeting process? Do you anticipate further budget cuts?
A: We certainly are seeing some improvement in our revenue stream. And I would remind you, the state’s revenue stream is really a lagging indicator of the state’s economic conditions. That’s always a little frustrating because sometimes the economy feels like its better but the revenue isn’t coming into the state as fast. So the revenue has been lagging behind our economic conditions, but there is some slight improvement. We believe with current forecast, we’re still yet to make a formal recommendation for the upcoming fiscal year. We believe it won’t be as difficult. It still isn’t great. We’re still below 2008 revenues. We still have agencies that are significantly funded below the levels they were in 2008 and 2009. And we don’t have any reserves left because we’ve used all the reserves to mitigate the reductions over the last three years. So, we’re in a little bit more of a precarious situation, but we don’t anticipate revenue further declining.
Prominent legislators agree the Idaho Legislature is hard to predict. “You know, the interesting thing about the legislature is you never really know what the big issues are going to be until you get there,” said House Majority Leader Mike Moyle (R-Star), when asked what he thinks will be the defining debates in the 2012 session. “You get down there and there’s something that pops up that’s a big issue and you never thought it would be.” That said, there is consensus that whether or not Idaho should create a state-run health insurance exchange will be one of the biggest questions before legislators in the months ahead.
Idaho Legislature / State of Idaho
House Majority Leader Mike Moyle, from Star, says Idaho should not create its own health insurance exchange unless it is given enough leeway to tailor the exchange to state needs.
Health insurance exchanges are a primary component of the Affordable Care Act. By their most basic description, exchanges are new organizations — marketplaces — created to make available health insurance options more clear and more competitive. In the health insurance market, individuals and small businesses don’t have perfect information or a great deal of bargaining power with insurers. A health insurance exchange would lay out the private and public health insurance options, explaining plans in terms of benefit levels and costs.
Under the Affordable Care Act, states can create their own exchanges or wait for the federal government to do it for them. Idaho Governor C.L. “Butch” Otter supports the creation of a state-run exchange, and Idaho has moved forward to receive a series of federal grants. Many Idaho legislators, however, are not convinced the state should establish its own exchange. Continue Reading →
In case you missed any of our stories this week, we put the most-viewed stories all in one place. Enjoy!
It was a busy week at StateImpact Idaho, and we saw a big boost in our site traffic. Thank you! Here’s a look at the five stories getting the most attention:
Governor Otter: The State Can’t Reject a Federal Unemployment Benefit Extension: Extended benefits for jobless Idahoans are tangled in a Congressional debate. It’s unclear if a resolution will be met before extended benefits expire Dec. 31. But if they are, Idaho politicians don’t seem to agree on how to handle it.
“For businesses, economic and financial uncertainty caused in large part by misguided federal programs and policies are undermining confidence in the marketplace. Employers have no idea what it will cost them to comply with new health care mandates. I understand their hesitation. But that’s stifling employment growth.” – Gov. Otter, 2011 State of the State
Nearly one year later, Otter stands by that statement. He explains why when we interviewed him earlier this month:
Idaho is one of 26 states suing the federal government over the health care law. At the same time, Idaho has accepted federal money to begin creating a health insurance exchange, an online marketplace for buying and selling insurance mandated by the federal law. We’ll have more on that in the coming weeks.
In Idaho's tight-knit community of real estate brokers and buyers, no one would share Charlie Bryan's name with a reporter. Drive past his office, though, and there it is, on the sign.
While reporting our recent story about Idaho farmland prices and investor interest in cropland, I ran across a quirk of Idaho law that posed a bit of a challenge: sales prices aren’t public information. Idaho is one of ten states that are known, in the real estate business, as “non-disclosure states.” For a better understanding of what that means, I called up the Idaho State Tax Commission’s Property Tax Policy Supervisor, Alan Dornfest.
Dornfest says “non-disclosure” is a bit of a misnomer. It’s not that Idaho prohibits disclosure. It’s that the state doesn’t mandate it. “There is no disclosure law,” he said. “We simply don’t have a requirement, like most states do, for one of the transactors in that land sale, or building sale, or whatever it was to tell a government entity the sale price.” Continue Reading →
House Republicans have reportedly reversed their stance on extending a payroll tax cut and benefits for the long-term unemployed this afternoon. The Associated Press and Reutersreport the House will vote on the measure.
This means about 12,000 Idahoans who’ve been out of work for more than six months will continue to receive extended federal benefits for at least the next two months, if the measure passes. The Idaho Department of Labor Director Roger Madsen has said he doesn’t support an extension of benefits. Madsen has suggested Idaho legislators and the governor will reject any further benefit extensions.
Governor C.L. “Butch” Otter told StateImpact Idaho the state doesn’t have authority to reject federal benefits.
Talk of lowering taxes has already started among Idaho lawmakers. At the Associated Taxpayers Conference earlier this month, legislative leaders said proposals to lower Idaho’s corporate tax and individual income tax rates will be part of the discussion.
Sen. Brent Hill (R-Rexburg) says lowering taxes this session will be met with resistance, and will likely require a trade-off in order to pass muster. “If we lower the tax rate, for small businesses as well as corporations, I think you’ll see we’ll have to phase out the investment credit at the same time we lower the rate,” says Hill.
Governor Butch Otter says the state needs to be bringing in more revenue before it can consider lowering tax rates. And if a tax decrease is agreed upon, it would need to happen over a period of time, the governor says. Continue Reading →
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