OpinionAugust 24, 2022

Editorial: The Tribune’s Opinion

Draft Idaho’s Legislature into special session in late summer.

Propose major changes in school spending and tax relief.

Do it in a hurry — just a day or two before lawmakers take their Labor Day weekend holiday.

Offer no alternatives.

Give a public otherwise preoccupied with vacations or getting ready for school no time to study up on the idea.

Lock down the legislative votes on a take-it-or-leave-it proposition that both increases ongoing budget demands and reduces tax revenues — permanently.

Preempt a popular school funding initiative that was on its way toward passage.

And do it on the eve of an election campaign.

What could possibly go wrong?

Gov. Brad Little is doing precisely that.

Come Sept. 1, he will present to the assembled Legislature House Bill 1 — which would seem to have something for everybody with the notable exception of Little’s version of Darth Vader, aka the Idaho Freedom Foundation’s Wayne Hoffman.

Little is proposing to devote $410 million of Idaho’s surging general fund tax revenues toward a massive investment in a school system ranked 51st for per-pupil expenditures and which can’t afford to compete with neighboring states for teachers. That exceeds by 27% Reclaim Idaho’s Quality Education Act ballot measure, which proposes to invest $323 million in public education. Little’s plan also pledges to maintain a 3% yearly expansion of that commitment.

But at least Reclaim Idaho’s plan paid for itself — by restoring the corporate income tax rate to 8% from 6%. It also creates a new, 10.925% income tax bracket for individuals with more than $250,000 in taxable income or $500,000 for joint filers.

Little does just the reverse, repealing the Reclaim Idaho tax provisions two days after they would take effect and handing corporate Idaho a further tax break by imposing a flat 5.8% rate on everybody, rich and poor — after excluding the first $2,500 of income from taxation for individuals and $5,000 for joint filiers. That will cost about $161.2 million every year, not to mention the one-time $500 million in tax rebates the governor wants.

That may thread the needle with education advocates and corporate Idaho — but where’s the fire?

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Extraordinary legislative sessions are called that for a reason — they’re intended to respond to crises.

Little’s assertion that high inflation constitutes such an emergency rings hollow. How in the world does spending more for schools and tax cuts do anything to cut the price of gasoline by even a penny at the pump? And if a brief special session can enact structural change in budgets and taxation, what’s the point of a prolonged legislative season — with hearings, competing ideas and public testimony — beginning in January?

We’ve been here before.

In 2006, then-Gov. Jim Risch was equally audacious.

He hauled the Legislature back to Boise in a one-day summer session with a plan to alleviate skyrocketing property tax bills. He swapped a $260 million property tax levy that supported public schools with a penny increase in the sales tax, then worth about $210 million. For most people, it was a loss. Homeowners paid far more in sales taxes than they saved in property taxes. The big winners were corporations and wealthy landowners, such as Risch. The big losers, of course, were renters — who were promised but never got a repeal of Idaho’s sales tax on food.

Then as now, Risch offered a take-it-or-leave-it deal.

Then as now, Risch had the votes lined up ahead of time.

Then as now, Risch was able to block another pro-education initiative campaign. The 2006 version of Proposition 1 had proposed to restore Idaho’s sales tax to 6% — it had temporarily dropped to 5% that summer — to shore up public education. By boosting the sales tax to 6% for property tax relief, Risch preempted the measure. No way would Idahoans vote for a 7% sales tax rate and Proposition 1 died by nearly 55% in November’s general election.

Then as now, the public had virtually no opportunity to weigh in on the deal.

Risch’s bland assurances aside, his arrangement blew up when the Great Recession battered Idaho’s economy. Schools never recovered from the budget cuts imposed. Communities that could afford them increased their reliance on supplemental property taxes. But for poor, rural districts, it was a one-way ticket to four-day school weeks.

But by then, Risch was serving in the U.S. Senate, safely unaccountable from all of that.

Not only is Little’s plan equally bold in its details and execution, but it also presumes that the economic good times will roll along forever. What happens to a state that quickly adds more than a half-billion bucks of new commitments if the real estate boom suddenly falters?

And where does that leave Idaho’s beleaguered homeowners, who have been begging for property tax relief?

One of the surest signals of impending trouble is when the political and economic elites assure you that “this time it’s different.”

How many times do we have to learn this lesson? — M.T.

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