[Vision2020] Legislative Update VII from Rep. Trail -- February 23-28

[ttrail at moscow.com]

Constituents:  

     The old saying that the economy is everything is certainly true 
during this Legislative session.   We are still trying to learn all of 
the details of the impact of the Obama Economic Stimulus Plan on the 
Idaho State Budget.   For example, K-12 Education in Idaho will receive 
about $247 million for the support of K-12 and post-secondary 
education.   Of that amount about $202 million is directly aimed at 
supporting K-12 and post-secondary education, and $45 million for public 
safety and governmental services (which will be under the control of the 
Governor).  The requirement is that the Governor makes the determination 
of whether the allocation is sufficient to restore funding for public 
schools and higher education in FY09, 10, and 11.  If the answer is yes 
then the move would be to restore the funds and if not then to allocate 
funding between public schools and higher education in proportion to 
their shortfall of state support.

1.  Public Education  --  with the economic situation worsening (the loss 
of 2,000 more jobs in the Treasure Valley with Micron) projections are 
that there could be a shortfall of potentially $150 million in cuts in 
FY11 in revenues are flat.   It appears that Legislative leadership wants 
to spread the stimulus money out over the three fiscal years rather than 
commit it all to FY09 and FY10.   This would also be utilizing some of 
the "rainy" day funds to lessen the impact.

2.  The Stimulus Will Cost Idaho Some Funds  --  Sen. Brent Hill, Senate 
Chair of the Senate Tax and Local Government Committee, indicates that 
some of the tax breaks in the stimulus package will cost Idaho about $14 
million in lost revenue. Hill notes that one idea is to raise the top 
income tax rate by one-tenth of a percentage point.   This would raise 
about $15 million.  Senator. Hill also notes by delaying the 
implementation of the grocery credit we could gain another $15 million.

        As reported in previous newsletters, if the Idaho Legislature 
really wanted to look at some financial opportunities we have identified 
some opportunities:

       a) Review all of the 75 tax exemptions and if some are not 
benefitting the state then eliminate the--the added revenue would flow 
into the general revenue fund;

       b) Consider taxing internet sales (Idaho loses an estimated $60 
million per year by not taxing internet sales);

       c) Reinstate Tax Commission auditors whose jobs were eliminated-
the cost of the auditors was $ 1 million and they were bringing in about 
$6 million in  unpaid taxes  --  a $5 million gain for the state; 

       d) Consider requiring motorcyclists to wear helmets (we lose about 
$4 million/year from federal highway funds).

3.  Beer and Wine Taxes  --  This bill was defeated on a 13-5 vote in the 
House Tax and Revenue Committee.   The estimated income of about $14 
million would have been applied to drug rehab programs.   I believe that 
another bill with a lower tax rate may be introduced later in the session.

4.  Good Economic News  --  The University of Idaho College of 
Agriculture and Life Sciences indicates that the strongest component of 
Idaho's economy is the agriculture sector.   It now represents about 20% 
of the state's GNP and contributes about 17% of the jobs.  With the 
exception of the dairy sector, agriculture experienced positive growth 
both in 2007 and 2008.  Agricultural exports continue to increase, and 
agricultural exports account for about 22,000 Idaho jobs. My report on 
agriculture to the JFAC Committee can be found on my website:    
http://www.infotrail.com/idaho/   click on the link labeled “Presentation 
to JFAC”

 5.  Invasion of the Quaggas  --  Invasive mussels pose a huge threat to 
Idaho waters.  Both Zebra and quagga mussels have moved into Lake Mead 
and some western waters.  The mussels can rapidly spread, but have not 
yet been detected in Idaho.   Preventing them from entering the state via 
boats and trailers that have been in infested waters is critical since 
there are no practical means to eradicate the invaders once they take 
hold and multiple.  One quagga mussel can produce over one million eggs.  
A report by the state estimates if the mussels enter  Idaho waters there 
would be an estimated $94 million negative impact on the state's economy.

 6.  HB121--The Idaho House by a 70-0 vote approved a tax credit for the 
Idaho Food Bank.   The Food bank’s role in the social safety net is to 
provide emergency food for those who need it.   Statistics indicate that 
Idaho is the 24th hungriest state in the country.

 7.  State Retiree Insurance  --  The House voted 59-11 for a plan to 
push Medicare- eligible state government retirees off Idaho's insurance 
and onto private plans to reduce costs.  People who retire early from the 
state government would get a $155 premium subsidy to stay on the state's 
plan, but they would switch to Medicare at age 65.

 That's all for this week!   Please send me your comments, suggestions, 
etc.  

My office phone is (208) 332-1184
 
Representative Tom Trail 


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