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Posts published in “Day: January 24, 2022”

Dishing out the motherlode

jones

Even before they blew into Boise for the 2022 legislative session, Idaho legislators were rhapsodizing about the gigantic tax cuts they were going to bestow upon their voters–$350 million, $400 million, $600 million, the sky’s the limit in an election year. There is certainly enough surplus revenue in State coffers to sweeten the hearts of voters toward their incumbents, but it seems the process is backwards. Shouldn’t we take a lesson from most Idaho families and provide for all of the spending necessities before reveling over how much largess is to be handed over to voters?

With increasing prices for food, gas, rent, you name it, many budgets, particularly those of modest-income families, are being stretched to breaking. Families have to make sure enough of their income is set aside for basic necessities before laying plans to spend on non-necessities.

Over the last decade, our legislators have perfected a handy refrain when chronically underfunding important governmental functions like education, infrastructure, drug treatment, foster care, mental health, whatever else–”This is a tight budget year, we know we should do better, just wait for a fat year.” Well, the fat year is here and, just like a modest-means family, we should be hearing about how legislators are going to meet important funding obligations before they go about depleting the entire surplus.

Education is at the top of the funding list, having been shortchanged for well over a decade. One education advocacy group contends Idaho education is underfunded by about $1.3 billion per year. That includes $700 million for K-12, $340 million for higher education, $52 million to fund full-day kindergarten and covering $216 million in school district levies.

Before rushing into setting massive tax cuts in stone, the Legislature should make an in-depth examination of education and other important funding priorities that have been dramatically underfunded over the years. The funding levels should be increased to make programs properly functional before obligating the surplus for tax cuts and rebates.

When it is determined how much is not needed for important programs, any tax cuts should be parceled out in a more equitable manner than just favoring high earners. Bill Parks of Moscow, a retired business professor and founder of outdoor gear retailer NRS, hit the nail on the head with his suggestion to target “those who need it most, rather than just our highest income residents.”

He continued, “Individuals with gross income less than $12,550 and married couples with less than $25,100 are not subject to the income tax, but even people with modest incomes reach the maximum tax rate shortly after that. A single taxpayer hits the maximum rate of 6.5% at $7,939 in taxable income. For joint filers it is $15,878. It is obscene that a couple barely over the poverty level is paying taxes at the same marginal rate as those with incomes in the millions. Why not at least triple the five tax brackets so that the 6.5% rate kicks in at around $23,817 for single filers and $47,634 for joint filers? That would provide tax relief where it is most needed.

It is hard to fault Bill’s suggestion in these difficult times. While the State has a revenue surplus, there are many thousands of Idahoans who are struggling financially through no fault of their own. Many are on the verge of homelessness with Idaho’s unprecedented housing market. Revenues not urgently needed to restore proper funding for important State programs should be targeted for those struggling souls.