[Vision2020] Legislative Update XII from Rep. Trail

[ttrail at moscow.com]

We are still grinding along in the 2005 Legislative Session.  It is April 
Fools’ Day and an outsider might think that the Governor and Legislators 
are taking it to heart: the House and Senate are holding bills hostage 
and the Governor is vetoing bills left and right.  The Governor wants to 
get his Highway Bill passed (which I support) and the Senate is holding 
three major water bills (including the $450,000 appropriation to study 
the Palouse Aquifer) hostage.  This blind man’s bluff game is typical of 
the chaotic endings we see each year as the legislative session limps 
along.  We were supposed to be out of here March 19th, yet we are still 
here.

My guess is that some type of compromise on the Governor's Highway bill 
will come out of committee.  The original bill received overwhelming 
support in the Senate and my feeling is that it will pass if it comes to 
the floor of the House.  The major water bills will easily pass once they 
get an opportunity to come to the floor for a vote in the Senate.   The 
extension of the cigarette tax (which yields about $20 million per year) 
passed the House with a two year sunset.  The Senate amended the bill to 
make it permanent (this is the approach I supported).  Initially, money 
from the cigarette tax will help pay for some of the water resolutions. I 
also support the continuation of these monies going into the Permanent 
Building Fund; however, I feel that a certain percentage of these taxes 
should be used for anti-tobacco education programs and to pay for health 
costs brought on by smoking.

Overall, business has done very well this session with the passage of the 
Micron property tax bill.  The Governor's tax incentive program to 
attract businesses from the Fortune 500 list and to keep companies like 
HP, Micron, and Albertson's here in the state is certainly good for big 
business.  Another bill which gives certain incentives to businesses that 
would create 10 jobs or more at a minimum of $40,000/year will benefit 
smaller communities.  If the session were graded for Business, then it 
would probably get an A-.

On the other hand, K-12 and Higher Education obviously were not seen as 
important as business or water problems.   Both received little more than 
a 2% increase as contrasted to a 7% increase for Corrections and 14% for 
Medicaid.  Teachers and state employees received no pay increase.  There 
is only the possibility of a 1% one time increase if tax revenues reach 
$124 million above projections by the end of June.   The pay for teachers 
and staff has been eroding for a number of years.   I have data that show 
that more than 20% of the U. of Idaho staff are at or below the poverty 
level and that their number is increasing.   Many staff have to work a 
second job and many qualify for food stamps.  It is obvious that an 
investment in our Idaho human capital is not a high priority among 
legislators.

The magnificent obvious is that we will be in for a very long session in 
2006.  We will have a $120 million reserve going into the 2006 fiscal 
year and it is projected we will only have $1 million in reserve going 
into the 2007 fiscal year.

I've told the Republicans in caucus that we missed the perfect 
opportunity to extend the sales tax for another year.  This would have 
yielded $180 million and given us sufficient funds for pay raises and 
adequate support of education.   I told members of the caucus that we 
will be talking about a tax increase next year, and Republicans hate to 
talk about tax increases especially in an election year.  The last time 
the Republicans didn't increase taxes and cut budgets of state agencies 
by 10% was in 1952.  This was the year that LCSC and Albion Normal were 
closed, and the Democrats won the elections.

I've offered my tax plan as an alternative and will introduce it again 
next year. The plan would reduce the sales tax from 6% to 4% and yet 
yield about $240 million as contrasted with the $180 brought in by the 
one cent sales tax (at 6%).  This is accomplished through elimination of 
10 tax exemptions plus taxing services (except for health and medical 
costs).  I've also had legislation drafted that would form a Citizens 
Commission with Legislative Oversight to review all of the 75 tax 
exemptions.

The Senate and House Conference Committee came out with an agreement on 
the tobacco tax.  The tax will become permanent. Some of the initial 
funds will be used to help pay for solution to Idaho's water problems.   
After that funds will be used for the Capitol restoration.  The Senate 
also required that state facilities be added into the agreement.  This 
could include universities and public schools if one takes a broad 
definition of facilities, but this will become clearer once the bill is 
voted.  We have concurred but will have to vote on the actual measure.   
I will be supporting it.

The Governor and House Leadership will meet on Monday to work out 
possible details on the GAVEE Bonds/Highway Project.

My wife and I had a trip planned next week to California.  I made 
arrangements with my substitute, Jeff Harkins, to sit in for me in my 
absence (since it appears the session will spill over into next week); 
however, the Speaker indicated he just wanted me to pare off and so I 
will do this and ensure that my votes for the Highway bill and the 
cigarette extension are counted.  All other major legislation has been 
taken care.

Please note that you should contact me at ttrail at moscow.com until next 
January.

Thank you,

Rep. Tom Trail



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