When, it comes to Idaho budgeting, the Governor presents, but it’s the Legislature which sets the final numbers. Governors propose, Legislatures dispose.
So the new state budget for the 2022 year (beginning July 1) will be parsed in the workings of the Legislature’s finance and taxation committees, where there will certainly be tweaks to the budget outlined by Gov. Brad Little earlier this month.
But Little’s broad outline, with significant tax reductions and strategic investment in key areas, is a good start on both points. Let’s start with taxes, which Little proposes to lower.
Little’s proposed budget calls for some $300 million in one-time tax cuts, and another $160 million in permanent reductions. Howe can Idaho afford to do this? Simple, really. We’re sitting on an estimated $600 million in state funding surplus, due to prudent fiscal practices and the simpler adherence to a “pay as you go” philosophy, also known as “live within your means.”
We’d prefer to see permanent rate reductions on incomes, as that’s where much of the surplus is showing. (DFM report, 1/21) Many studies show the single best step which states can take to boost their economies is to reduce tax rates on income. States as diverse as Texas, New Hampshire and Florida all show this truism.
Idaho’s income tax rates are too high and should be reduced. This then would leave more money in people’s pockets and foster job creation, business expansion and both move-ins and business startups. (Rich States, Poor States, 2020). In effect, it would promote Idaho as an entrepreneurial state of opportunity. Our tax structure should reflect that worthy objective.
Some argue that the state should end the grocery tax, which stands at 6 percent, as part of the state’s general sales tax rate. But removing it entirely would allow purchases like soft drinks (about 9 percent of the grocery sales tax revenue) to escape this reasonable charge.
Removing that tax would also be giving beverage and food purchasers a “free ride” and shift taxes to others. A fair system of sales taxes should not exempt a significant portion of Idaho’s population, as all citizens benefit from having shared “skin in the game.” Giving one group a pass is unfair and poor public policy.
Property tax reduction has long been a goal of many legislators, but local entities of government keep piling on more and more local property taxes. Long experience shows the best antidote to this pattern is to restrict local government spending.
Cities and counties consistently ask for more money and the Legislature should curtail this trend and not “open the spigot” further. Local “wants” are often dressed up as “needs,” but wise citizens see the impacts in their local property taxes much more than the spendy projects and resultant growth of government usually warrant.
another place where Little’s budget proposal is on-target is in reinvestment in infrastructure, chiefly roads and bridges. Idaho’s road network needs more funding to meet the growing population (up nearly 260,000 in ten years) and a solid further investment is warranted. Little proposes abut $126 million for infrastructure maintenance and refurbishing and another $80 million for new projects. (gov.idaho.gov., 1/11)
There is always “do good” pressure to boost funding for “social justice” programs, and there are many on the Left who make this their first priority. But money spent this way is often pork-heavy and the results aren’t always clear or direct.
Everyone knows how important roads and bridges are, but there are always Legislative tussles over where the work it is most needed, and at what costs. Idaho is a huge state with conditions varying from mountains to flatlands; road and bridge maintenance can quickly fall behind.
Transportation systems aren’t fancy; highway safety measures don’t get the press attention of the latest social cause. But the lifeblood of a state economy rides on transportation nonetheless. Little’s proposed budget is an important step in this critical arena.
Stephen Hartgen, Twin Falls, is a retired five-term Republican member of the Idaho House of Representatives, where he served as chairman of the Commerce & Human Resources Committee. Previously, he was editor and publisher of The Times-News (1982-2005). He is the author of two new books on Southern Idaho, “Tradition & Progress: Southern Idaho’s Growth Since 1990.” and “Spirit of Place: Southern Idaho oss Generations.” He can be reached at Stephen_Hartgen@hotmail.com