Even the powerful and well-connected can't always get everything they want.
Two of the most influential business lobbies in the state, the Boise Metro Chamber of Commerce and the Idaho Association of Commerce and Industry, headed into the legislative session for three major tax breaks.
But when the gavel ended the session Thursday, lawmakers had passed only a tax reimbursement for businesses that generate at least 20 new jobs in rural areas or 50 in cities.
Even with allies in both the House and Senate, lobbyists' efforts to roll back income-tax rates and to increase the personal property tax exemption died quietly when committee chairmen declined to schedule hearings on them.
IACI President Alex LaBeau said he's disappointed with the lack of progress in his lobby's long-term goal of eliminating all personal property taxes, which are collected on most property that isn't land or buildings, including equipment and furnishings.
Last year, lawmakers passed a bill exempting the first $100,000 worth of personal property from the tax in each Idaho county where a business operates. This year, lawmakers considered legislation that would have expanded the exemption to $250,000, leaving only 5 percent of businesses paying any tax.
The personal property tax revenue goes to counties and cities. Last year, the Legislature replaced the $18 million local governments would have collected before the exemption.
"There needs to be a plan to finish the tax off," LaBeau said. "It's an inherently unfair tax. Local government has to come to grips with that, as well as the state if they want to truly do what's right for business."
A bill would have reduced the corporate income tax rate, a flat, region-leading 7.4 percent, by a tenth of a percent each year until it reached 6.8 percent. The top individual income tax rate, which now is 7.4 percent, would have been reduced at the same pace to a top rate of 6.8 percent.
Co-sponsored by Mike Moyle, the powerful House majority leader from Star, the bill passed the House. But Senate Local Government and Taxation Committee Chairman Jeff Siddoway, R-Terreton, declined to schedule a hearing on it.
Bill Connors, president and CEO of the Boise chamber, said the tax reimbursement bill was a victory. The bill allows the Department of Commerce to negotiate with companies to pay back up to 30 percent of their payroll, sales and corporate income taxes for up to 15 years if they agree to create jobs paying more than the average wage in the county of operation. Gov. Butch Otter is expected to sign the bill into law.
Connors said the program has little risk for the state because companies wouldn't receive a dime until jobs have been created. "We didn't get everything we wanted, but we're extremely excited about the tax-reimbursement bill," he said. "We think it's a great example of an incentive where no money changes hands until jobs are actually created and there's no loss to the state at all."
Some lawmakers hoped to make greater progress on tax relief, including Siddoway.
Siddoway supported expanding the personal property tax exemption. He said he regularly met with Senate and House leaders, House Revenue and Taxation Committee Chairman Gary Collins and tax experts from the Idaho State Tax Commission to discuss the personal property tax, corporate income tax rates and reducing or eliminating the grocery tax.
Siddoway said participants found little common ground and derailed each other's bills.
"We had a lot of meetings throughout the session, and every time we met, we had different ideas proposed on tax relief," Siddoway said. "... Quite frankly, I'll take the responsibility of saying no to a good deal of that."
The cost of tax breaks was a big reason, he said. Expanding the personal property tax exemption figured to cost at least $8 million a year. The bill rolling back income taxes would have cost $21 million in its first year.
Siddoway said the two proposals couldn't coexist with the Legislature increasing K-12 education spending by $66 million next year.
One of the lawmakers in those talks, Senate President Pro Tem Brent Hill, R-Rexburg, said he had expected tax relief bills would make more headway.
"The problem really was in the competing nature of the bills," Hill said. "We've got some who really want to look at income tax reductions and others who think we need to continue with personal property tax, and then there's the majority of the Legislature feeling like we just can't afford to do both."
Zach Kyle: 377-6464, Twitter: @IDS_zachkyle