Legislators Had Other Options

Legislators are quick to remind everyone that they have a constitutional obligation to balance the budget. But they have another constitutional obligation as well — to fund “a general, uniform and thorough system of public, free common schools.”

There are plenty of ideas out there to help address this problem if lawmakers exercise the political will necessary to adopt them.

When Idaho faced a revenue shortfall a in 2002, the Legislature agreed with Gov. Dirk Kempthorne’s proposal to raise the sales tax temporarily. That idea might not be the best way to address this crisis, but policymakers seem determined only to turn over the rocks that produce cuts and ignore those that might add revenue.

There are plenty of ideas out there to help address this problem if lawmakers exercise the political will necessary to adopt them.

For example, we could raise revenue without increasing anyone’s tax burden if we would:

• Collect all of the taxes already due to the state.  The State Tax Commission has reportedly stated that if Idaho were to spend $10 million to hire auditors, they $48 million in net revenue could be generated.
• Suspend the election consolidation measure passed in 2009. This could generate $4.1 million in revenue.
• Partially freeze the grocery tax credit for one year, resulting in $9.4 million in additional revenue while not increasing anyone’s tax.
• Delay the insurance premium reduction for one year. This would generate $6.7 million in revenue.

There are a number of other alternatives that could be implemented. These would have an impact on individuals’ taxes. We could:

• Remove the grocery tax credit that was enacted two years ago. This would result in $83 million in additional state revenue.
• Remove the tax exemptions for professional services (i.e., legal, accounting, engineering, architectural, consulting, etc. ). This would generate approximately $180 million in new state revenue.
• Remove the tax exemptions for business services (i.e., office services, employment services, building services, security agencies, employment agencies, etc.). This would generate approximately $147 million in new state revenue.
• Remove the tax exemptions on personal services (i.e., laundry, dry cleaning, barbers, beauticians, etc.) This would generate approximately $12 million in new state revenue.
• Add a 5% surcharge on personal income tax for taxable incomes over $50,000. This would generate approximately $40 million in new state revenue.
• Increase the sales tax an additional penny, which would generate $180 million in new state revenue.
• Add a 1 cent sales tax on a 12 ounce can soda pop and a $1 per gallon tax on soft drink syrup. This would generate $10 million in state revenue .

Legislators have the dual responsibility of representing their constituents and providing leadership to move our state forward. A decade from now, what will Idaho citizens say about this time in our history?

Will they say: “Thank you for not raising taxes, even though my children’s education was shortchanged and they are now finding it difficult to compete in a global economy.” Or will they say: “Thank you for meeting your constitutional obligation so our children received a ‘thorough’ education which has made it possible for them to become productive, taxpaying citizens.”