Worried about the Quality Education Act killing tax cuts? Here’s why you shouldn’t be
There’s a small bump in the road for Reclaim Idaho’s Quality Education Act.
As James Dawson of Boise State Public Radio reported, both the attorney general and the secretary of state agree that passing Reclaim’s initiative would unintentionally reverse the tax cuts passed during this year’s legislative session. Reclaim Idaho disputes this, and said it would take the matter to court if needed.
Bottom line: The attorney general’s office is probably right on this one. Nonetheless, the Quality Education Act is worth passing.
Reclaim’s initiative would make genuinely positive strides to address education funding, where the Idaho Legislature has fallen down on the job for years, despite year after year of record surpluses. It is utterly irresponsible for Idaho to be overflowing with cash, only to see teachers leaving after a few years because they can get paid better and be better supported nearly anywhere else. Idaho remains dead last in the nation in per-pupil education spending.
The initiative creates a new tax bracket to tax individual income over $250,000 — or a married couple’s income over $500,000 — at a higher rate. The taxes raised by this additional bracket, estimated to come in at about $320 million per year, would be set aside in a fund for education.
The side effect of undoing the 2022 tax cuts is attributable to an unusual timeline. Reclaim had to draft its initiative before the tax cuts were passed, and so it wrote in then-current tax brackets. The consensus of the attorney general and secretary of state is that passing the bill would not just add the new bracket, but also reinstate the 2021 tax brackets.
How big a deal is this?
Not very big at all, given the political context.
It should give voters who care about the future of Idaho education exactly zero pause. Reclaim’s initiative is still a good one worth supporting. And supporters can reasonably expect that the 2022 tax cuts would be reinstated in January — and with another year of record revenue taking shape, it’s likely lawmakers will make further cuts.
An initiative works just like a bill in the legislature. It rewrites state law, but that law is not set in stone. The Legislature can change it during any legislative session.
The only thing that generally prevents the Legislature from altering initiatives is the political consequence. Voters don’t like seeing politicians reverse the popular will, and politicians fear retaliation at the ballot box. That’s how Medicaid expansion survived intact, despite widespread opposition among Republican lawmakers.
The political incentive is entirely different in this case. Reclaim Idaho did not draft its initiative with the intention of reversing the recent tax cuts, and it does not have that intention today. Voters who signed on did not have that intention either.
So why would lawmakers have any fear that they would face political consequences for reinstating the tax cuts?
Voters can be reasonably confident that the political will to set tax brackets at current levels exists in the Idaho Legislature because lawmakers set those brackets only a few months ago. The bill passed the House 57-13 and the Senate 27-7. Those margins are bulletproof.
But imagine if, out of petty spite or disorganization, the Legislature managed not to reinstate tax cuts? It’s worth remembering that the 2022 tax cuts overwhelmingly favored the rich. If you’re an individual who made $30,000, those tax cuts saved you about $72 (excluding the one-time rebate), according to a Statesman analysis. If you made $60,000, they saved you about $220. If you made $1 million, you pocketed about $4,900.
Reverse all these and institute a new bracket via the initiative, and you wind up with almost $570 million a year more for education. That’s money that could ensure that Idaho’s children have a bright future, where they can get jobs that will afford them good lives.
Even the unlikely worst-case scenario isn’t so bad. In fact, it would be a vast improvement on the status quo.