Idaho lawmakers on Tuesday ushered in Gov. C.L. "Butch" Otter's $200 million sweeping tax cut plan, marking the first such proposal introduced during the 2018 legislative session.
"Arguably, this bill is the biggest tax reduction bill we've seen in the years that I've been in the Idaho Legislature and maybe in Idaho history," said House Majority Leader Mike Moyle, R-Star, who pitched the governor's tax cut plan to the House Revenue and Taxation Committee.
Otter's bill includes reducing personal income and corporate tax rates by 0.475 percent and creating a $130 Idaho child tax credit.
The multi-pronged plan seeks to align Idaho's income tax code to recent federal changes included in the Republican tax overhaul signed into law by President Donald Trump.
The federal policy cuts tax rates and nearly doubles the standard income deduction. It also caps or eliminates some popular itemized deductions and sets the personal exemptions to zero.
Idahoans are estimated to pay roughly $100 million more next year if the state conforms to the federal policy if they don't pass any other tax relief.
Lowering all seven of Idaho's personal income tax rate brackets will reduce the state's general fund by $144.5 million. Meanwhile, trimming the corporate income tax rate reduces the fund by another $15.1 million and the child tax credit slashes the fund by $42.3 million.
In total, the plan calls for little more than $200 million in tax cuts. Couple that amount with the expected $100 million boost of revenue from the tax overhaul, the estimated reduction to Idaho's $3.5 billion general fund is $104.5 million.
The Idaho Legislature typically syncs the state's tax code with the federal version each year to make it easier for residents and businesses to do their taxes, as well as avoid having to keep separate accounting books to track the different rules.
Yet Idaho code doesn't include a child tax credit in its state income tax laws, so many of Idaho's large families are expected to take a bigger financial hit next year if Idaho lawmakers do nothing to offset the federal overall.
Otter had originally proposed an $85 child tax credit, but critics had argued that the amount was too low to help families recover financially from the federal tax overhaul.
The House Revenue and Taxation Committee introduced the bill Tuesday with the panel's two Democratic lawmakers voting against it. The bill must now pass a full hearing.
Even if the legislation advances out of committee, it's not unusual for tax cut bills to be amended or drastically rewritten in the final hours of the session.
"This tax cut is at best rushed, at worst, reckless," said House Minority Leader Mat Erpelding, D-Boise. "I've grown tired of the majority party in the House preaching fiscal responsibility and personal responsibility while embracing tax policies that demonstrate neither."
Sponsors of the legislation include Otter, Moyle, House Speaker Scott Bedke, R-Oakley, Senate President Pro-Tem Brent Hill, R-Rexburg, and Senate Majority Leader Chuck Winder, R-Boise.