Property taxes, Medicaid, school funding: What’s on tap for the Idaho Legislature
On the heels of a factious election year, Idaho lawmakers on Monday are returning to Boise for a new legislative session.
The state has an estimated $1.5 billion surplus, the third consecutive year tax revenues are expected to surpass forecasts by at least $900 million.
After years of wrangling over how to address rising property taxes, lawmakers say easing the burden on taxpayers will be a priority. Meanwhile, a large chunk of money has been set aside for education, but legislators have conflicting ideas about how to spend it. And lawmakers are gearing up for a new debate on Medicaid expansion.
The session will feature dozens of new lawmakers along with a new House speaker for the first time in a decade, after former Speaker Scott Bedke became lieutenant governor.
‘School choice’ debate forthcoming
Idaho Gov. Brad Little, who’s coming off a landslide reelection in 2022, is planning for more of the same, including recommending increased public school and infrastructure investments.
In a September special session, lawmakers approved Little’s proposal to set aside $410 million for education. Most of the money is earmarked for public schools, while another $80 million is meant for workforce development programs.
The Legislature ultimately will decide how the money is appropriated in the coming months.
Little signaled he will continue to push for investment in public schools when he recommends a state budget on Monday. That includes boosting teacher compensation and directing funds to workforce development, as Idaho businesses struggle to find qualified workers.
“I want our kids to stay in Idaho,” Little told reporters Thursday. “They need to get a K-12 education, but in this complicated world, they also need more skills, whether it be technical, whether it be an engineering degree, fill in the blank.”
Meanwhile, some Republicans plan to push for private education subsidies. While “school choice” proposals have failed in recent years, a new batch of conservative lawmakers, who support directing state funds to private education, hold a majority on the Senate Education Committee.
Activists with Reclaim Idaho, a nonprofit that advocates for increased support for public education, are organizing against any “school choice” proposals. Critics argue private school subsidies would drain resources from public schools.
Senate President Pro Tem Chuck Winder, R-Boise, told reporters Thursday that there will be some pressure this session to funnel tax money to private schools.
“We still have a constitutional obligation to fund our public schools,” Winder said. “That has to be our first priority, and we’ll continue to do that. But we have the luxury right now to be able to do a little more. So I think you’ll see some some changes there but not significant, I don’t think at the expense of public education.”
Lawmakers to reconsider Medicaid expansion
After Idaho voters in 2018 passed a referendum to expand eligibility for Medicaid, Idaho lawmakers set a Jan. 31, 2023, deadline by which they would reconsider the expanded program.
Critics of Medicaid expansion say it’s grown costlier than expected. New House Speaker Mike Moyle, R-Star, on Thursday said the total Medicaid budget last year surpassed education as the state’s largest expense.
“It’s out of control,” Moyle said. “And if we do not get this Medicaid animal under control, it’s going to have an impact on education and other places.”
While the federal government covers about 70% of the state’s Medicaid costs, Idaho’s share is about $830 million. The cost to cover expansion is about $100 million more annually than the $40 million estimates five years ago, Moyle said.
Voters OK’d Medicaid expansion by more than 60%. The successful ballot initiative extended eligibility to people with household incomes up to 138% of the federal poverty level. That was meant to close a coverage gap among people who made too much money to qualify for traditional Medicaid but not enough to receive health care subsidies.
House Assistant Minority Leader Lauren Necochea, D-Boise, said Medicaid expansion remains a good deal for Idaho, especially as health care services are stretched thin and the state is sitting on another surplus.
“Don’t tell me that we can’t afford to stay in a program that is just yielding tremendous benefits to citizens financially, economically and otherwise,” Necochea said. “It could not be more clear that this is something that voters want. It’s something that the business community wanted.”
Property tax relief a top priority
In recent years, Little and the Legislature cut income taxes for individuals and businesses while issuing income tax rebates. This year, however, property tax relief will be a priority.
After directing surplus money last year to address one-third of Idaho’s road and bridge maintenance backlog, Little said he plans to propose funding maintenance on another third of the backlog this year.
Directing state funds toward roads, bridges and water and sewage treatment indirectly relieves property taxes by lifting those burdens from local governments, Little said.
“Every one of those initiatives lessens some of the needs that your local governmental entities have,” he said.
But lawmakers, who for years have debated potential property tax solutions, with little success, are mulling more direct strategies. Sen. C. Scott Grow, R-Eagle, plans to introduce a bill that would direct state sales tax revenue to property tax relief, the Idaho Press first reported.
Republican and Democratic leaders agreed Thursday that rising property taxes must be addressed. Moyle cautioned that local government entities, which levy property taxes, may not like the solutions.
“They collect the money and they spend it. We don’t,” Moyle said. “The only way to lower property taxes is to constrain those budgets.”
Little, meanwhile, reaffirmed his promise to sign a bill that would repeal the state’s tax on food. Multiple grocery tax repeal proposals during last year’s session failed to garner a hearing.
An October poll commissioned by the Idaho Statesman found that the majority of Idahoans support repealing the 6% food tax. But Little said he needs more clarity on how groceries are defined.
“That’s the complicated part,” he said. “It’s the uncertainty of what qualifies.”
Freshman lawmakers abound
Nearly half the lawmakers descending on Boise next week will be new. That’s thanks to a handful of retirements along with last year’s election and redistricting, the process every 10 years when legislative maps are redrawn to account for population changes.
Moyle, the former House majority leader, was elected speaker last month. He also handpicked the House’s powerful committee chairs, who control whether a bill advances. Moyle said nearly half of the 70 House members will be new.
“They have things they want to fix that they think are wrong, and it’s going to be awesome,” he said. “They’re going to try to make an impact.”
Winder, who’s heading into his second term in the Senate’s highest-ranking position, told the Statesman that he’s also optimistic about freshman senators, about half of whom will be new.
“I think most of them are going to be thoughtful and reasonable, want to do what’s best for their constituents,” he said.
Winder said he told new lawmakers that they should remember three numbers. Successful legislation needs support from 36 members of the House, 18 senators and one governor.
“If you really want to get a piece of legislation passed, you’ve got to develop relationships and coalitions, support for your bills,” Winder said. “You can’t do it all on your own.”
