Some lawmakers are skeptical — and several have technical and philosophical issues — but a late-session tax bill is headed to the House floor.
The House Revenue and Taxation Committee endorsed a bill to reduce income tax rates across the board, while ramping up the collections of sales taxes on Internet purchases.
The projected bottom-line impact: a $16 million tax cut.
The bill would do two things.
First, all income tax rates would drop by 0.1 percent. For taxpayers at the high end of the scale, rates would drop from 7.4 percent to 7.3 percent. At the lowest end of the scale, rates would go from 1.6 percent to 1.5 percent. This amounts to a $27 million tax cut.
Second, the bill would tighten up the definitions of retailers that must collect tax on Internet purchases. E-retailers must collect sales taxes if they have a presence in Idaho — a “nexus,” in tax terminology. By expanding the definition of a nexus, using language modeled after 26 states, Idaho could collect a projected $11 million.
But even the bill’s sponsor, House Majority Leader Mike Moyle, R-Star, conceded that this number involves some guesswork.
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“You never will know until you do it,” Moyle said.
The end-of-session bill also entails some political give and take. Last week, the Senate Local Government and Taxation Committee swiftly rejected a Moyle bill to decrease income tax rates and increase the grocery tax credit.
Moyle said his bill would make it easier for Idahoans to comply with Internet sales tax requirements, while fitting tax cuts within a budget with an estimated $50 million surplus.
Most committee questions focused on the details of the Internet tax language. And Rep. Mark Nye, D-Pocatello, said the $16 million tax cut would jeopardize public schools funding.
Said Moyle, “We do our best to take care of education and we always have.”
The committee endorsed the bill on a 12-3 vote, agreeing to send the bill straight to the House floor. Reps. Ronald Nate, R-Rexburg, Heather Scott, R-Blanchard, and Nye voted no.
The tax bill could be a linchpin toward adjourning the 2016 legislative session — perhaps by the end of this week. Not surprisingly, the hour-long discussion of the bill drew a large crowd to Rev and Tax’s meeting room; spectators included lobbyists for Idaho teachers, school trustees and administrators.
In other Statehouse action Monday:
Student mobility. The House overwhelmingly passed another bill designed to cover enrollment increases at school districts and charter schools.
House Bill 603 would provide added funding for schools that see their classroom units grow by at least 3 percent over the course of the school year. Alternative school and virtual charter school leaders say the funding is needed to accommodate at-risk students who transfer during the school year.
Gov. Butch Otter vetoed a similar student mobility bill in 2015.
Although HB 603 passed the House 64-3, its prospects are less than clear. The bill would still need to pass the Senate — and budget-writers will need to figure out how to handle its projected cost of close to $1.1 million.
Charter replication. The House passed a bill designed to allow charter school administrators to operate multiple schools.
Supporters says Senate Bill 1376 will allow successful charter schools to replicate their formulas and approaches. The charter operators would also be able to contract with private, for-profit or nonprofit “educational services providers.”
The bill passed the House 60-7, with opposition coming from some Democrats.
SB 1376 now heads to Otter’s desk.
Career-technical bonuses. The House Education Committee continued to run new legislation Monday, introducing a bill to give bonuses to certain career-technical education teachers.
Vice Chairwoman, Julie VanOrden, R-Pingree, pushed the bill, adding to the 2015 career ladder salary law. Under VanOrden’s bill, school districts would receive an extra $3,000 per year for each career-technical teacher who holds an occupational specialist certificate.
VanOrden said the bill represents an effort to bolster recruitment and retention of career-technical teachers.
“This has come from the education sector, saying we need this right now because we’re losing programs right now because we can’t hire teachers,” VanOrden said.
VanOrden said he bill would cover 486 teachers and carry a $1.7 million price tag.
Committee members clashed over how to handle the bill, which is not funded in the Joint Finance-Appropriations Committee’s K-12 budgets.
Rep. Rich Wills, R-Glenns Ferry, attempted to place the bill on a fast track by forgoing a full hearing and sending it straight to the House floor. But Rep. Ilana Rubel, D-Boise, and others said they had numerous questions, and did not want to forgo a public hearing.
In the end, Rubel won out, and the committee voted only to introduce the bill. The bill is expected to return to the committee for a full hearing.
However, the bill’s prospects are unclear, as lawmakers seek to wrap up their work.
Said Wills, who has served in the Legislature for 14 years: “We’re going to be out of here in a few days.”
Matching scholarships. The Senate endorsed a bill that would create new scholarships for graduates who rack up college credits while in high school.
House Bill 477 would establish $2,000 in scholarships for high school students who earn 10 to 19 college credits; $4,000 in scholarships for students who earn 20 or more credits, and $8,000 in scholarships for students who earn an associate’s degree.
There are two conditions: Students must secure a matching grant from industry and must attend college in Idaho. The bill’s sponsor, Sen. Steven Thayn, R-Emmett, said the matching requirement would foster a more “robust” discussion between industry and students.
Sen. Lori Den Hartog, R-Meridian, debated against the bill, questioning whether the state should be involved with awarding scholarships.
The bill passed the Senate, 32-3. The House has passed this bill, but will need to agree to Senate amendments to the language.
Idaho Ed News reporter Clark Corbin contributed to this report.