Rep. Ronald Nate – District 34
Tax Cuts Being Held on Aisle Four
When you hit the neighborhood grocery store for your weekly shopping trip for eggs, milk, bread, fruits, and other staples, you pay the cost of the groceries plus an additional 6% for the state sales tax going to the state general fund. The grocery tax brings in about $187 million for the state budget.
Last week, Senator Cliff Bayer presented his plan to exempt all groceries from the 6% sales tax while eliminating the grocery income tax credit. The proposal would provide immediate tax relief to every Idahoan. It would reduce revenue coming into the state budget, but would also reduce the ‘payouts’ from the budget toward the grocery tax credit.
On net the bill would diminish revenues by $18.6 million in 2018 (half a fiscal year), and $26.1 in 2019. This means Idahoans would have that many millions more to spend on other things. Also, there would be more economic activity from increased grocery sales in Idaho and other increases from Idahoans who have more money left to spend in other parts of the economy.
Senator Bayer’s proposal has broad support. It’s not very often a piece of legislation in the Capitol has more than 10 co-sponsors. So, when this tax cut plan comes out with 48 co-sponsors, it raises eyebrows. I am proud to be a co-sponsor.
In a legislature with 105 legislators, 48 co-sponsors is a strong signal. To be a co-sponsor is more than just a commitment to vote for the bill; most legislators see co-sponsorship as tantamount to carrying the bill themselves. There are no doubt many others who would vote for the bill even though they are not co-sponsors.
The bill is a slam dunk, right? Well, not quite. One of the hallmarks of the 2017 legislative session is the debate over committee chairs holding onto bills and not scheduling hearings. The grocery tax bill is one of those bills. Despite its amazing support, the chair of the House Revenue and Taxation Committee has so far declined to set a hearing for the bill.
With the huge budget surplus this year, estimated at nearly $140 million, tax cuts should be the legislature’s first instinct. However, money to spend on more or bigger government programs also looks good to some moderate and liberal legislators. Unfortunately, it appears some of our legislative leaders are among the legislators who are more interested in spending than cutting taxes this session.
Personally, I have no doubt the bill would sail through committees and through both chambers if it were allowed hearings and floor votes. Hopefully the bill will be scheduled soon, Idahoans deserve tax cuts after so much overspending the past few years.
Top Down or Bottom Up?
This week we had a fascinating and informative debate in the House. The issue was about the common practice of committee chairs selectively scheduling some bills for full hearings while holding onto other bills and effectively killing them. For example, this session we’ve seen hearings on bills involving wiener dog races, fingerprinting of masseuses, and lottery prize winner privacy. But some more important bills like repealing Common Core, immunization exemption/privacy, and the grocery tax cut can’t even get a first hearing.
I have received tons of emails from citizens who are frustrated to see the bills they are invested in get stalled in committee. The frustration seems especially high this year. Gun rights bills are held, a short-term rental policy bill is held, tax cut bills are held, a city initiative reform bill is being held, and the list goes on.
Seeing this frustration, and knowing there is a bill (HR1) in the Ways and Means Committee which would change rules in a way to get many more bills heard, I called for the bill to come out of committee and reported directly to the floor for a vote. The committee chair did not want the bill to come forward and moved to keep the bill in committee (ironic choice huh?). The debate was amazing.
Those who spoke to keep the bill in committee were essentially saying the process is fine and committee chairs should be allowed to keep any bills in their drawers they wish. Those against the motion debated for the principle of bills being heard (with a certain number of co-sponsors). The debate was essentially about whether the process should be top down (leaders and chairs controlling the agenda) or bottom up (citizens getting their voices heard through representatives bringing their bills to the committee for full hearings and debate and votes).
The legislators arguing for the status quo used phrases like “control the flow,” “protect the members.” and “trust the process.” The legislators debating for guaranteeing bill hearings used phrases like “citizens’ voices should be heard,” “representatives should be allowed to represent,” and “committees should do their work.” It was a clear and stark difference in views about how the legislature should operate. Some wanted control and protection, others wanted bills to be heard even though some votes might be uncomfortable.
In the end, the vote overwhelmingly favored the absolute power being left in committee chairs’ hands. Most legislators thought it best to shove bills in drawers than to have open and fair debate. A few legislators, who lost the vote, thought that all issues should be heard and citizens deserve to see their ideas win or lose on the merits rather than the whims of one committee chair. You can watch the full debate by selecting “House Chambers” and Day 59 here:
Overspending and Opportunity Cost
I have been trying to be extra-vigilant on watching the spending items this session. When I see a spending line-item which could be better spent on, say, teacher salaries (pay is important to attract and retain good teachers in Idaho–especially in math and the sciences), I put them into my “overspending tracker.” It’s surprising how much could be saved if we chose to be more thrifty with taxpayer dollars. I also calculate how much we could have been added to the paycheck of each of Idaho’s 15,985 teachers with that spending, and/or how many new teachers we could have hired with that spending. In economics, we call this “opportunity cost.”
This far into the session (and the spending bills are just now coming through the House), I’ve identified the following:
- Number of bills with overspending items: 18
- Amount of dollars of overspending: $4,142,200
- How much each teacher’s salary could increase: $259.13 per year
- How many new teachers could be hired: 110
Bills of Interest Update
Here is an update of some of the key bills working their way through the Capitol.
H67 – Income Tax Cut – Stalled in Senate Finance Committee.
H94 – American Laws for American Courts – Stalled in House St. Aff. Comm.
H109 – City referendum elections in all years – Stalled in Local Govt. Comm.
H110 – Front license plates exemption – Failed in the House, 28-42.
H137 – Homeowners Electrical Work – House 2nd Rdg Calendar, vote on 3/13.
H154 – Transparency in Tax Notices – Failed in Senate Committee, 3-5.
H179 – No Mandatory Minimum Sentencing – House Judiciary Committee.
H202 – Civil Asset Forfeiture – Senate Judiciary Committee.
H216 – Short-Term Rentals – Senate Committee.
S1050 – Immunization Exemption Rights – Stalled in Senate H&W Committee.
S1131 – Abortion Pill Reversal – Informed Consent (to give women information about how to reverse a chemical abortion, therefore saving some babies before it’s too late). Senate State Affairs Committee..
HCR018 – Article V Convention – House State Affairs Committee.
SCR108 – Article V Convention – Failed in the Senate, 11-24.
___ – Grocery Tax Exemption – Stalled in House Rev and Tax Committee.
___ – Repeal Common Core – Stalled in House Education Committee.
___ – Repeal the SBAC Test – Stalled in House Education Committee.
___ – Strengthen/Revise Castle Doctrine – Stalled in House St. Aff. Comm.
___ – Concealed Gun Rights Expansion – Stalled in House State Affairs Comm.
___ – Firearms safety classes in high schools – Failed in Ed. Comm., 6-9.
___ – Electronic publishing of public notices – Stalled in Local Gov’t Comm.
___ – Repeal Health Insurance Exchange – Stalled in Hlth and Welfare Comm.
___ – Other tax cut bills?
Growing Freedom – Get Involved!
Please visit the Growing Freedom Idaho website. It was created to help all citizens be more involved with what is going on in the Idaho Legislature and how to effectively make their voices heard. The site includes a Freedom Agenda of legislation brought to the legislature by citizens and is what liberty-minded legislators are pursuing this session.