WestViews: Speaker’s plan for tax shift gets mixed reviews

January 27, 2014 

Our take: Though the Bedke tax-shift plan could use some tweaking, we like the idea of repurposing the grocery tax credit to lower income tax rates.

Idaho State Journal (Pocatello)

Let’s see if we have this straight. Idaho House Speaker Scott Bedke would trim part of the state’s grocery tax credit to pay for a reduction in personal and corporate income taxes. The tax credit is a tempting target, yielding about $133.5 million annually to taxpayers.

The speaker believes middle- and high-income taxpayers are not entitled to the $80-per-person grocery tax credit, and eliminating it would enable Idaho to reduce its current income tax rate of 7.4 percent to 6.95 percent. Doing so, he reasons, would attract more businesses and employers.

“Convince me,” says Gov. Butch Otter, who worked hard to win passage of the expanded grocery tax credit in 2008. Does Bedke now think Idahoans will swallow a cut in their tax credits in order to potentially attract business?

The speaker was wise enough to avoid proposing a reduction in the tax credit for low-income or elderly claimants — currently $120 for those over 65. But he must be aware that one of every five Idahoans is collecting public assistance of some kind. More Idahoans work for minimum wage — Idaho’s is the lowest in the nation — than in any other state. Those grocery tax reductions are coveted.

Mike Ferguson, the state’s chief economist for six governors including Otter, says families of four earning more than $117,750 would see lower taxes should lawmakers adopt Bedke’s proposal, and taxpayers earning $50,000 would see their tax liability increased by $305. Ferguson, who now heads the Idaho Center for Fiscal Policy analyzing budget and tax policy, has been at odds in the past with Otter and others in the administration, but he has been accurate in his projections. Bedke might pay attention.

Idaho could save $70 million to $80 million by denying some of the grocery tax credits, but there is another way to make up that amount: Accept President Obama’s offer to expand Medicaid coverage to 100,000 working poor adults. The Lewiston Tribune says that would free up more than $40 million the state now spends providing care to that same group....

That’s unlikely to occur, given Idaho lawmakers’ antipathy to anything in Obamacare. But it’s just as unlikely that Speaker Bedke can persuade his minions in the Statehouse that cutting the grocery tax credit to benefit business is a workable idea.

Ford name getting traction in Nampa

Idaho Press-Tribune

Finally, some good news for those who are frustrated at the degree to which the city of Nampa has financed the Idaho Center.

One of the nation’s most recognizable, successful and stable corporate identities has signed on to sponsor the entertainment venue — to the tune of $1 million over the next five years.

It’s a huge shot in the arm for a facility that has had to ask the city of Nampa for millions of dollars since it opened in 1997.

The agreement with Ford for naming rights won’t offset that level of subsidization, but it’s a good start. And the news could inspire smaller sponsors — and more entertainers — to follow the auto maker’s lead, bringing in more revenue.

Let’s hope so. And kudos to Ford for stepping up and opening its wallet to help a venue that has improved the quality of life for many of us and has also helped fuel economic activity in the form of neighboring businesses in northeast Nampa ... .

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