Idaho Gov. Little makes the wrong call: $240 million tax cut goes too far | Opinion

Idaho Gov. Brad Little has done a commendable job over the past few years managing the state budget.

He is correct to pat himself on the back for accomplishing record investments in public education and infrastructure while also paying down long-term debt, building up rainy day reserves and cutting taxes.

We will quibble with him on whether he’s correctly balancing tax cuts with properly funding deteriorating school buildings, and we believe tax cuts should be more targeted to those who need it most.

But we give him great credit, along with the leadership of former Division of Financial Management director Alex Adams, who has since moved over to head Health and Welfare, for satisfying all the screaming voices at him and still maintaining a solvent budget.

Even with tax cuts, state revenue continues to climb (the legislative budget committee this week set revenue projections for fiscal year 2026 at $6.4 billion, a 6.8% increase above the level in the current fiscal year 2025 budget, according to the Idaho Capital Sun).

We are still concerned that even as tax revenue continues to climb, it may not be enough to keep up with Idaho’s remarkable growth. We point to the crisis in school building maintenance as just one example.

We’re also concerned that Idaho’s budget and economy has been propped up artificially over the past few years by federal overspending and pandemic-related relief funding.

So when Little’s budget proposal in January included $100 million in tax cuts, we rolled our eyes, but trusted that it was part of his office’s long-term planning, which so far has been successful.

For the most part, the Idaho Legislature has gone along with Little’s plans for the budget.

Not this year.

The Legislature passed House Bill 40, which includes an income tax cut that is projected to reduce state revenues by $240 million by lowering Idaho’s income tax rate from just under 5.7% to 5.3%, according to previous Statesman reporting.

“I see continued prosperity for the state of Idaho and I see the income tax as our least-desirable tax,” Sen. Phil Hart, R-Kellogg, said Tuesday on the Senate floor. “I think we should continue to chip away at the income tax.”

Keep in mind that Hart is the guy who stopped filing both federal and state income tax returns in 1996 while he unsuccessfully pressed a federal lawsuit challenging the federal income tax as unconstitutional, according to The Spokesman-Review. Eventually, he settled his dispute by agreeing to let the feds auction off his Athol home for unpaid back taxes.

So consider the source.

More importantly, though, the country is going through uncertain times right now, as President Donald Trump’s tariffs on goods coming from other nations, including our allies and trusted trade partners; the threat of retaliatory tariffs on American and Idaho goods; and massive federal layoffs at the hands of Elon Musk and the Department of Government Efficiency threaten our economy.

Maybe it will all be fine. Maybe it won’t.

If things don’t end up all rosy and as positive as the optimists think, Idaho could be in a world of hurt, with less revenue to pay for public education, infrastructure improvements and public safety.

And we all know that 5.3% rate is never going to go up, not even if Idaho’s budget goes south.

Little should have vetoed the Legislature’s $240 million income tax cut and told them to come back with another proposal that comes closer to his target.

Times may be good right now, but as the old saying goes, “It’s not the bad years that break you, it’s the decisions you make in the good years.”

This story was originally published March 6, 2025 at 2:40 PM.