What to expect from the Idaho Legislature

Budget, health care, taxes — those are the three issues Gov. Butch Otter said Jan. 5 will dominate the Idaho Capitol during the 2012 legislative session. But with several hundred different pieces of legislation likely to be introduced, there are sure to be many issues, ranging from small technical changes to broad ideological concerns, cropping up in Boise over the next few months.

As in recent years, balancing the state budget will be paramount. This year there appears to be less of a chance of further drastic cuts, but slower-than-expected revenue growth likely means less money to allocate to tax cuts or restoring funding drops to education and human services.

More will be known next week, when Otter releases his state budget and his advisors update their economic projections. Otter’s told both the media and state agencies to expect less tax revenue. “It has been sufficiently anemic enough that (state economist) Derek Santos has reduced his projection from the mid-part of the year,” Otter said. He singled out sales tax revenues, which are a more current economic indicator and have lagged almost $19 million behind projections.

That lagging revenue throws some cold water on plans to trim the personal or corporate income taxes, replenish rainy day funds or reverse cuts made during the depths of the recession. Otter reiterated his commitment to school funding, but there appears to be far less extra money than has been discussed since last April’s positive income tax numbers. Another April surprise this year could again sink or buoy the budget, but by that time lawmakers will have left town and started preparing their re-election campaigns.

In the overwhelmingly Republican Legislature, one of the most divisive issues will be whether to establish a health insurance exchange, part of the 2010 federal health care overhaul intended to help small businesses and individuals compare and pick insurance plan. Idaho received $20 million from the feds to set up a state-run exchange. That plan has the backing of business groups, including the Idaho Association of Commerce and Industry and Boise Metro Chamber of Commerce. They say a state-run exchange offers certainty and more responsive state regulators. Some conservatives want the state to reject the money, arguing that the state can’t afford the long-term costs and that the wide-reaching health law could get overturned by the Supreme Court. Those conservatives scuttled $2.5 million in federal exchange money last year. Now there’s more money at stake, and the governor and supporters have had more time to make the case for an exchange.

Conservatives could also be divided on economic incentives. Otter is expected to announce a new venture increasing money for high-tech research, building on the Center for Advanced Energy Studies in Idaho Falls  he’s previously trumpeted. Other proposals include a job investment fund, a business expansion fund being promoted by some private sector groups, and tax breaks for specific industries. Some lawmakers view those ideas as efforts to make or retain jobs, but critics warn about favoritism to certain industries and using public money for private benefit. If any of these efforts pass the House, it will be interesting to see how they fare in the Senate Local Government and Taxation Committee, which has spelled death for some incentives. However, that committee saw turnover when Sen. Joe Stegner, R-Lewiston, left to become a lobbyist for the University of Idaho. Sen. Tim Corder, R-Mountain Home, replaced him in the chairman’s seat, but I don’t expect the committee to completely change course.

Democrats have said they’ll introduce their own jobs creation package, a sequel to ideas from 2010 that made no headway at the Capitol. Minority leaders are also pitching new ethics rules for lawmakers, including perhaps a new ethics commission.

There are bound to be other legislative issues big and small affecting businesses — lawmakers will deal with a new energy plan and oil and gas regulations, as well as infrastructure funding – but until the session is underway it’s hard to tell how it will unfold. As House Speaker Lawerence Denney said Jan 5, predicting a legislative session can be more difficult than predicting the weather.

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One Response to “What to expect from the Idaho Legislature”

1. Bill Says:
   January 9th, 2012 at 11:40 am

   Wonder if Idaho’s enlightened legislature will repeal the operating loss carry *back* provisions which most states got rid of years ago? This allows companies like Micron to carry losses backward to years where they made a profit, and erase those profits and then get a “tax return” from Idaho taxpayers. Can you say, “raid on the state treasury?”

   But then again, it’s probably the only thing keeping Micron in Idaho..