An important association of Idaho businesses will push for a slate of tax reductions in the upcoming legislative session, and the group also will ask lawmakers to support allowing local option taxing authority in the state.
Nathan Anderson, director of public affairs for Union Pacific and chairman of the tax policy committee for the Idaho Association of Commerce and Industry, or IACI, presented several recommendations at the Dec. 6 annual meeting of the Associated Taxpayers of Idaho in Boise. They include increasing tax brackets, lowering marginal tax rates, and reducing the unemployment tax rate.
Anderson said IACI also supports local option taxing authority, but with limits such as requiring at least 60 percent voter approval, raising funds specifically for construction and not for maintenance, and a strict sunset date, he said.
More than half of the 105 members of the Legislature – all of whom are up for election next year –registered for the conference, said Miguel Legarreta, who became ATI president in 2016. Typically, legislators don’t want to implement tax increases during an election year, preferring to cut taxes.
“I know you want me to come here and tell you how much is available for tax relief,” said Jani Ravier, administrator of the division of financial management. “I can’t do that.” Tax cuts should not be paid for with a one-time budget surplus, she warned.
“There are things that didn’t get resolved last session,” Legarreta said. “I don’t think anyone wants to leave this session without something getting done.”
One potential point of contention is the grocery tax. IACI is in favor of keeping it because it provides a steady stream of revenue to state government. That’s a viewpoint that Gov. C.L. “Butch” Otter, who also spoke at the conference, shared, adding that he was just as much against eliminating it as he had been last year, when he vetoed a grocery tax repeal bill.
In addition, he emphasized his support for education to help improve Idaho’s workforce. “I’ve got 29,000 jobs I can’t fill,” he said. He also on Dec. 6 appointed Rep. Janet Trujillo, R-Idaho Falls, to the Tax Commission.
Conferees also discussed the impact of potential changes in the federal tax bill, such as the removal of the state and local tax deduction for individuals (though not for corporations) and whether states will conform with federal tax changes.
If Idahoans can no longer deduct state and local taxes from federal income taxes, they might be less willing to vote for initiatives such as public education bonds and levies, said Alejandra Cerna Rios, a policy analyst for the Idaho Center for
Fiscal Policy, a Boise-based nonpartisan nonprofit that assesses tax policy for its effect on citizens.
The three major Republican candidates for governor in 2018 – Lt. Gov. Brad Little, Boise developer and businessman Tommy Ahlquist, and Rep. Raúl Labrador via Skype – presented to conference attendees, but didn’t go into much detail beyond what they’ve already said during the campaign. Labrador called for cutting the sales tax rate to 5 percent, which he said would attract new companies to Idaho, as well as other reductions, including eliminating the grocery tax. Little called for cutting taxes by $350 million, including eliminating the grocery tax and tying new tax exemptions to eliminating other ones. Ahlquist called for reducing the top corporate tax rate to 5 percent over time and repeated his promise to cut $100 million from the state budget in 100 days.
Democratic candidate A.J. Balukoff was not invited to present because he entered the race only recently, and is not participating in the May primary, Legarreta said. “The focus is on the primary, not the general election,” he said. “That’s where the attention is right now.”