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

[Art Deco]

Judy,

Thank you for your comment.

I really support mandatory analyses and reporting that show what every one of the state tax exemptions cost in lost revenue.  If these numbers were available, I believe that the public would more vigorously signal their legislators to do something more balanced.

As long as politicians rely on impossible to prove political/social/religious ideology to support their decisions instead of probabilities of consequences of actions, we will never have any where near a balanced tax system.

And as bad as the unbalanced state tax exemptions are, the federal tax system with its hundreds of thousands of exemptions is much worse.  All of us ordinary citizens are financing much for which we receive little or nothing in benefit, but special groups/people reap billions by not having to pay taxes the rest of us have to make up.

I suspect that Representative Trail will have a difficult time persuading his fellow legislators that now is the time to reveal to the citizens what each and every exemption is costing them.  I believe the reason for this is that many legislators do not want the public to have this information because it will lead to the severe mutilation of some very sacred cows.

Wayne A. Fox
1009 Karen Lane
PO Box 9421
Moscow, ID  83843

waf at moscow.com
208 882-7975
  ----- Original Message ----- 
  From: JLBrown 
  To: 'Art Deco' ; ttrail at moscow.com ; 'Vision 2020' 
  Sent: Wednesday, January 06, 2010 1:37 PM
  Subject: RE: [Vision2020] pre-legislative newsletter from Rep. Tom Trail


  Wayne and Visionaries,

   

  I like your idea of a reporting requirement showing how much property tax exemptions cost local tax districts-and how much they boost our individual property tax bills.  Unfortunately, reducing local property tax exemptions such as those for charities and other non-profits is not going to help the state's fiscal situation.  The property tax is entirely a local tax and none of those revenues goes to the state.

   

  Re-examining the 75 exemptions in the state tax code also makes sense, and should have been done a long time ago.  The idea has been around at least since 2003, with strong opposition from the House leadership, which is supposed to start tax policy.  Furthermore, the bulk of those exemptions are sales tax exemptions on services, so closing those exemptions basically means raising the sales taxes that you and I pay when we have our car serviced or call a plumber-not a great idea during a recession.  The Governor has also emphatically said that taxing services is not going to happen on his watch.

   

  Idaho is in a dire situation and could do long-lasting damage to public and higher education-cuts that could hurt our young people, the state's economic future, and this county in particular for a long time to come.  What is needed is a temporary revenue boost, something that can generate some dollars quickly without burdening those struggling with un-and under-employment.  The best way to do that is through the income tax, and that is why Rep. Ringo and I have proposed a modest temporary income tax surcharge for the next two years or so while the recovery gathers steam.

   

  I hope the 2010 legislature will take these issues seriously.  We'll see.

   

  Judy

   

  From: vision2020-bounces at moscow.com [mailto:vision2020-bounces at moscow.com] On Behalf Of Art Deco
  Sent: Wednesday, January 06, 2010 12:28 PM
  To: ttrail at moscow.com; Vision 2020
  Subject: Re: [Vision2020] pre-legislative newsletter from Rep. Tom Trail

   

  Tom,

   

  Thank you for the outline.

   

  I especially laud your analysis of tax exemptions.  I think we need to impose assessing/reporting requirements on county tax assessors so that we can know exactly how much each exemption is reducing the money otherwise available with respect to property and other taxes assessed by the county.  

   

  I especially endorse the idea that the cost to taxpayers of the exemptions to non-profits, many of which are not charities (and some of the charities are more employment opportunities for fund raisers than charities) be calculated and reported along with a calculation showing each taxpayer how much their tax bills would be reduced if non-profits were taxed.

   

  Wayne A. Fox
  1009 Karen Lane
  PO Box 9421
  Moscow, ID  83843

   

  waf at moscow.com
  208 882-7975

   

    ----- Original Message ----- 

    From: Rep. Tom Trail 

    To: vision2020 at moscow.com 

    Sent: Wednesday, January 06, 2010 11:57 AM

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

     

    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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