Reclaim Idaho's ballot initiative could reverse 2022 tax cuts
A ballot initiative that aims to raise taxes on corporations and the wealthy to boost education funding will go before Idaho voters in November. But state officials and organizers are at odds as to whether the measure would also negate tax cuts passed earlier this year by the legislature.
If approved, the initiative would create a new income tax bracket for people earning more than $250,000 a year at 10.925%. It would also boost Idaho’s corporate income tax rate to 8%.
Reclaim Idaho, the group behind the successful 2018 ballot measure to expand Medicaid eligibility, initially estimated the changes would raise about $323 million.
The campaign began collecting signatures for the initiative last year. But in January, state lawmakers further condensed and cut Idaho’s personal income tax rates.
The top personal income tax rate currently stands at 6% for anyone earning more than $5,000 annually.
Now at issue is how the initiative would be implemented if voters sign off on it this fall.
That’s because the petition signed by tens of thousands of residents included the old tax rates that were altered earlier this year.
If passed, the current tax rates would revert to their 2021 levels, effectively levying a tax increase across most incomes and raising about $570 million for education.
Deputy Secretary of State Chad Houck said in a phone interview with Boise State Public Radio he’s consulted with the state attorney general’s office on the issue.
Right now, Houck said he believes the changes would be implemented as written in full – meaning the initiative would overwrite this year’s tax cuts.
“Do any of us have the authority to change the language to remove that conflict and the answer there was, at least for our office, no,” he said.
Chief Deputy Attorney General Brian Kane agreed with that interpretation in an email to Houck on July 19.
“…there is nothing that we can do at this point about the ballot language or the text of the initiative. If it passes, it will be up to the legislature to sort it out as it sees fit,” Kane said.
The only option, in Houck’s mind, would’ve been for Reclaim Idaho to withdraw the initiative and file an updated petition to comply with legislation that hadn’t been debated, voted on or enacted into law when the group drafted its ballot measure.
Such a move would’ve thrown out every signature it had spent months collecting.
Luke Mayville, a co-founder of Reclaim Idaho, said Houck’s interpretation ignores long-standing legal drafting standards.
When a bill is proposed at the legislature, any new language added to existing law is underlined and words that would be deleted are struck through on the document.
“Only that top tax bracket [for those earning more than $250,000 annually] is underlined in the initiative text and so this is the only tax bracket that will be altered by the initiative,” Mayville said.
The official title of the initiative approved by the Secretary of State’s office also only includes the addition of the new top tax bracket.
“If the implementation of our initiative were to undermine the intent of the initiative, we would challenge that in court,” he said.
Idaho legislators would also have the ability to change the law next year if voters approve the initiative.
The measure just needs the approval of a simple majority to pass in November.
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