The first big tax cut proposal is on the table — setting up, potentially, a debate pitting tax relief against education funding.
The House Revenue and Taxation Committee introduced a bill that would cut Idaho’s corporate and high-end individual income tax rates, and boost the grocery tax credit for other Idahoans.
It’s a $27.8 million tax cut overall. (For more details on the plan, here’s a story from Bill Dentzer of the Idaho Statesman.)
Revenue and Taxation voted to introduce Rep, Mike Moyle’s bill — but only after some pointed exchanges between the House majority leader and committee Democrats.
Rep. Mark Nye, D-Pocatello, asked Moyle if the bill would threaten education funding. Moyle downplayed the connection, saying it will still be up to budget-writers to decide how to fund schools. “It doesn’t affect education at all,” Moyle said of his bill.
Rep. Mat Erpelding, D-Boise, questioned whether a $10 increase in the income tax credit for groceries would really help people in poverty — since families on food stamps do not qualify for the grocery tax credit. Said Moyle, “If you’re in prison, you don’t qualify either.”
The committee voted to print the bill, with only Erpelding in opposition. That means the bill is likely to come back to Revenue and Taxation for a full hearing.
The first tax cut proposal comes 15 days after Gov. Butch Otter presented a budget proposal that would boost K-12 spending by 7.9 percent — and recommends no changes to the income tax or grocery tax credit. Under questioning from Nye, Moyle reminded Revenue and Taxation members that the power to write budgets belongs not to the governor, but to legislators.
That K-12 budget will begin to take shape in several weeks — after the Joint Finance-Appropriations Committee fields budget proposals from all state agencies. State superintendent Sherri Ybarra will be before JFAC Thursday to present her budget proposal, which calls for a 7.5 percent spending increase for K-12.
On Monday, Senate President Pro Tem Brent Hill said lawmakers might come up short of Otter’s 7.9 percent request, favoring a budget more in line with the 7.4 percent increase approved in 2015.
“(We) probably won’t get all the way there, but we’ll probably be in the range of what we did last year,” Hill told Seth Ogilvie of Idaho Reports.