Unfinished work: Legislature’s tax working group wraps up

The Legislature’s much-ballyhooed tax working group finished its work Tuesday morning.

And left most of the work undone.

The House-Senate committee adjourned without any concrete recommendations on tax policy. So when the 2016 Legislature convenes in 27 days, with Gov. Butch Otter’s 10th State of the State address, tax policy will be essentially a blank slate.

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Rep. Gary Collins, R-Nampa

The working group’s co-chairs — House Revenue and Taxation Committee Chairman Gary Collins, R-Nampa, and Senate Local Government and Taxation Committee Chairman Jeff Siddoway, R-Terreton — said their next step will be to meet with legislative leadership and their caucuses to discuss the group’s findings.

Legislative leaders assembled the working group this summer, to study Idaho’s ways to make Idaho’s tax structure more competitive with neighboring states. The group met Tuesday morning with four specific proposals on the table:

  • A bill to reduce Idaho’s top income tax rate from 7.4 percent to 7.3 percent, a $20.7 million proposal.
  • Two bills to increase Idaho’s personal property tax exemption on business equipment and furnishings. The exemption now covers $100,000 of property. Increasing the exemption to $150,000 carries a $4.4 million price tag; an increase to $250,000 amounts to a $10.5 million tax cut.
  • A bill that would eliminate Idaho’s grocery tax credit, and repeal the sales tax on groceries. The net effect would be a $55.6 million tax cut.

Lawmakers Tuesday were reluctant to embrace any of the four proposals — and were uneasy about taking a piecemeal approach to the tax code. “I would like it to be part of a systemic tax policy and philosophy,” said Sen. Abby Lee, R-Fruitland.

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Sen. Jeff Siddoway, R-Terreton

Sen. Grant Burgoyne, D-Boise, suggested a one-year “tax moratorium,” while the Legislature focuses on investing in education and work force issues.

After Tuesday’s hearing, Siddoway expressed a similar sentiment, saying education funding should come first.

“Beyond that, we’re willing to look,” he said.

More reading: More from Tuesday’s meeting from Betsy Russell of the Spokane Spokesman-Review.