When Sen. Tim Corder, the new chairman of the Senate Local Government & Taxation Committee, suggested a first-ever joint hearing, House Revenue & Taxation Committee Chairman Dennis Lake might well have blown off Corder.
Rather than remind Corder that the Idaho Constitution requires revenue measures to start in the House, Lake agreed.
The 27 committee members — nine from the Senate and 18 from the House — meet at 9 a.m. Wednesday.
“We want the Senate to be part of the solution,” said Lake, R-Blackfoot. Lake and Corder invited testimony from witnesses representing agriculture, banking, energy, job creation, big business, small business and chambers of commerce.
Corder said he hopes one result will be an end to a pattern of House-passed tax bills dying in the Senate committee and fueling resentment between chambers.
“In the end, we’ll have fewer pieces of legislation that have absolutely no chance of success here,” said Corder, R-Mountain Home. “If both of us are generally headed in a direction, then we’re going to eliminate some sidesteps and missteps.”
Rather than limit the discussion to tax cuts, Lake and Corder have asked experts to answer this question: “What could be done to stimulate Idaho economic conditions?”
BROADER AGENDA
Corder says, for example, that investing in schools, roads and regulatory reform also should be on the table. “Tax relief may be a way, but I don’t believe it’s the only way.”
“We just want to hear from industry, from business, what the problems are and what the solution is — if there is one,” Lake said.
The guest list: Brent Olmstead from the Food Producers of Idaho; Clark Krause of the Boise Valley Economic Partnership, the job-recruiting arm of the Boise Metro Chamber of Commerce; the co-chairs of the Legislature’s interim energy committee, Sen. Curt McKenzie and Rep. George Eskridge; Idaho Association of Commerce and Industry President Alex LaBeau; Department of Commerce Director Jeff Sayer; Idaho Chamber Alliance lobbyist John Watts; and Len Williams, president and CEO of Home Federal Bank.
Gov. Butch Otter proposed $45 million in tax cuts in his Jan. 9 State of the State Address, without getting specific. Since then, prospects have dimmed.
First, lawmakers appear to put a higher priority on boosting pay for state workers and teachers than Otter, who proposed replenishing rainy-day funds first and bumping employee pay second — and only if the economy and tax collections permit. Next, lawmakers cut Otter’s fiscal 2013 revenue estimate by $33 million. Finally, earmarking $19 million to avoid shifting teacher pay to computers has won support.
“We’ve got to figure out what the exact number is before we can have a serious conversation about relief,” said Senate Majority Caucus Chairman John McGee, R-Caldwell, a member of the Senate tax committee. “Lots of us, including me, would like to do something, but at the same time, we have to balance the budget.”
STILL SUPPORT FOR TAX CUTS
Key House members, including Majority Leader Mike Moyle, R-Star, and Assistant Majority Leader Scott Bedke, R-Oakley, figure there’s between $25 million and $35 million left for tax cuts.
Moyle’s been meeting with Corder, a new twist. “He’s doing his homework,” Moyle said.
Bedke also had a kind word for the new Senate chairman: “He’s about building the economy, too.”
Lake feels the pressure from many in the more conservative House, who badly want some tax cut. “I, personally, am not dug in on that, but there are others who are,” said Lake. “They want to be able to go home and say we are doing our best to provide tax relief.”
Among those is longtime House tax committee member Lenore Barrett, R-Challis, who said, “Any tax cut is a step in the right direction.”
The inside track appears to be Otter’s preference — reducing income tax rates — rather than IACI’s push to eliminate the personal property tax. Lake noted that it costs about $14 million to lower the individual income tax rate from 7.8 percent to 7.6 percent. Coupled with $15 million already on the books for grocery tax relief, that fits in the $25 million to $35 million range.
Eliminating the personal property tax has a $129 million price tag, or $32 million a year if phased in over four years.
Lake took care not to raise expectations, saying he expects Wednesday’s hearing to have long-term relevance. “I think it’ll tell us what direction we can go in the future. I think that’s what we’re looking for.”
Does that mean no relief from the 2012 Legislature in an election year? “Well,” said Lake, “that remains to be seen.”
Dan Popkey: 377-6438
