[Vision2020] pre-legislative newsletter from Rep. Tom Trail

Rep. Tom Trail ttrail at moscow.com
Wed Jan 6 11:57:24 PST 2010


PRE-LEGISLATIVE NEWSLETTER--IDAHO LEGISLATURE 2010

Constituents:

The Idaho Legislature will open on January 11th.  The Economy will
dominate what takes place this session.  Idaho faces a $151 million
deficit as of July 1st.  Agencies cut 4% from their budgets, but still
have a $50 hole.  The Governor will outline his plans on January 11th.
Further reductions in state agency spending and consolidating some agency
programs may be some of the options that he will talk about.

  1.  Budget and Taxes -- There are basically four ways to balance the
budget or a combination of some of these options.

      a.  Cut agency budgets and programs -- this appears to be the option
that the Governor will select.  Public education and Higher
Education will no doubt see further reductions.  This would be one
of the few times that public education would suffer a cut. Many
quality programs from our universities and colleges will have to be
eliminated.  Outstanding faculty have already left the University of
Idaho seeking more stable conditions.  Further cuts in Medicaid may
occur.  One has to ask the question at what point do we allow the
quality of our educational programs not to further go downhill.

      b.  Examine Our Tax Exemption System -- To date we have 75 tax tax
exemptions which total up to be about $1.8 billion/year. Each
exemption benefits in general a small group of citizens or an
organization.  The money from the exemption does not flow into the
state general fund but, in fact, can be viewed as a cost to those
taxpayers not benefiting from the exemption.

          A tax exemption is granted by the State on the basis that it
will be a benefit to the State.  However, to date no system has
been set up to require the beneficiaries of an exemption to come
before the Legislature to present in a transparent and accountable way to
prove the exemption's value to the State.  If an exemption was found not
to be beneficial to the State then the funds could flow to the State
general fund and be used for priority programs.  I am working with several
legislators who will be proposing that we Sunset all 75 exemptions and set
up a system to evaluate all 75 exemptions on a timely basis.

      c.  Go After Those Who Have Not Paid Their Taxes -- The Office of
Performance Evaluation estimates that about $300 million in taxes  go
unpaid each year.  The IRS reports the figure to be about $350 million.
Governor Phil Batt approved hiring additional auditors back in 1996
and the returns were about one to ten.  Six years the state spent
$900,000 on auditors and got back $12 million. The Tax Commission in
November outlined a strategy--with $10 million to hire 164 auditors
the return would be about $65 million--more than enough to close
budget gap.  This is an initiative that I can strongly support.

      d.  Raise Taxes  --  This will not be a popular idea among many
legislators; however, the evidence appears that the blood-letting
with a series of budget cuts already experienced by public
education, higher education, and other programs has caused
irreversible damage-- then all options should be on the table.

          Tax cuts for corporations are being advocated by some Republican
legislators.  I'm opposed to this legislative initiative.  Idaho
has a very poor track record in granting tax breaks to lure big
corporations into the state or not to move out of the state. The case of
Micron and Albertson stand out as key examples.   Cash strapped
communities across the country have a message for corporations that
promised jobs in return for big tax breaks.  Many corporations and
businesses that were granted tax abatements and other incentives simply
did not deliver the promised number of jobs and other economic
enhancements.  The newfound strength comes as states that have long bent
over backward to lure companies and jobs to the tune of $60 billion/year. 
Agreements are now being written that will take
away the property tax break or a portion of it if the company
does not keep its promise or commitment.

  2.   Other--There will be many other specific legislative endeavors and
issues that will emerge during the session, but the economy is the
dominating theme at this time.   Idaho's unemployment rate is about 10%
and this doesn't include those whose benefits have already run out.
Idaho has paid out as much as $16 million/week in terms of unemployment
benefits.

Please send me your comments and suggestions to Rep. Tom Trail

e-mail:      ttrail at house.idaho.gov

Rep. Tom Trail




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