With no debate, the Senate voted unanimously Tuesday — 33-0 — to pass HB 335, the bill to lower the unemployment insurance tax and save Idaho employers $115 million over the next three years, without any impact on the state general fund. The bill, which now goes to Gov. Butch Otter’s desk, contains an emergency clause making it retroactive to Jan. 1, 2018.
“This bill will result in substantial net tax savings to Idaho’s covered employers,” Sen. Dan Johnson, R-Lewiston, the Senate tax chairman, told senators today. “It should sound very familiar to all of us. We looked at this last year.”
It was proposed last year and widely supported, but got killed in the cross-fire between the House and Senate over other tax cuts, and ended up not passing.
Due to a robust and growing reserve fund, the bill cuts the divisor that determines the base rates for unemployment insurance tax from 1.5 to 1.3. Johnson said even after the change, the state’s unemployment insurance trust fund is projected to grow to $900 million by 2020. Prior to the last recession, the fund averaged $300 million, he said.
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“There’s quite a buffer there,” Johnson said. “This is a very good bill. It’s very good policy.”