Idaho lawmakers passed the largest tax cut in state history Thursday, while also ensuring another $410 million in further education funding in the face of a projected $2 billion budget surplus.
“We have a boatload of money that needs to get dealt with appropriately,” Rep. Steven Harris (R-Meridian) said during the bill’s introductory hearing Thursday morning.
Inflation, Harris said, is partially responsible for the added revenue.
“We don’t want to be in a position to take advantage of that,” he said.
Residents who filed income taxes here in 2020 and 2021 will receive another rebate check – expected to roll out later this month – with a minimum of $300 per individual. Personal and corporate income tax rates will be completely flattened to 5.8%.
Taken together, both tax provisions will cost $661.2 million, with $161.2 million ongoing.
The education component nearly mirrors a ballot initiative from the group Reclaim Idaho, which would have raised income taxes on the wealthy and corporations to pay for it.
Even if the initiative passes in November, this package will overwrite it in January.
K-12 schools will receive $330 million each year from sales tax collections, while a new fund targeting education for in-demand jobs will get $80 million annually. It’ll be up to the legislature’s budget writing committee to specifically allocate money from that new fund.
The original proposal would’ve added an annual 3% increase to the $330 million going to Idaho public schools, but it was taken out.
While 85% of lawmakers gave the bill a green light Thursday, floor debates got contentious at times.
Two attempts to amend the bill or separate out its pieces individually failed in the House.
The Idaho Constitution requires legislation be limited to a single subject. Opponents contend this package spans several sections of state law and shouldn’t be considered as one issue.
“If we start slipping when it comes to the Constitution, it’s just like sin. Just a little bit here and a little bit there and pretty soon you don’t even recognize yourself anymore,” said Rep. Heather Scott (R-Blanchard)
The Idaho Attorney General’s office issued an opinion last week saying the proposal would likely stand up to a court challenge.
Still, debate spanned more than two hours on the House side.
“I think this bill and this entire process is very, very disrespectful to our Constitution, to our voters, to our taxpayers and to the incoming class [of new legislators],” said Rep. Judy Boyle (R-Midvale).
Scott and others criticized the injection of so much cash to Idaho’s public school system, which ranks at the bottom of states in per-pupil spending. Results are what matter, they said.
Rep. Greg Chaney (R-Caldwell) partially agrees with that.
“I do think that we’re getting an awfully good value, but I think that we’re pushing the edges of how far that value can go,” Chaney said.
Several legislators also found several ways to describe their dislike of the bill, but eventually voted for it because of the political realities of the situation.
“I don’t like being forced to vote in support of something that I don’t support just because you cannot oppose tax relief at this point for our citizens that are hurting,” said Sen. Regina Bayer (R-Meridian).
Political realities also seemingly spurred the special session in the first place.
Out of the original 62 co-sponsors, 25 of them had either lost their primary race in May or were stepping down this year.
Without their support, Gov. Brad Little previously told Boise State Public Radio “who knows” if he’d have had the support to pass the bill.
Little signed the bill Thursday evening shortly after its passage.
"Returning the people’s money is the right thing to do, and the education investments support families, help us keep up with growth, enhance our quality of life, and prepare a workforce to meet the changing needs of employers," he said in a statement.
Follow James Dawson on Twitter @RadioDawson for more local news.
Copyright 2022 Boise State Public Radio
