The full Idaho House has voted to approve a fast-tracked House Bill 311, House Majority Leader Rep. Mike Moyle's elaborate plan to eliminate Idaho's grocery tax credit, remove sales tax from groceries, raise fuel taxes by 7-cents per gallon and lower the top tier income tax rates for Idaho's wealthiest citizens (the top tax bracket would drop from 7.4 percent to 6.7 percent).
The 53-17 vote included 53 of the Republican majority's 56 votes, with only three GOP legislators - Reps. Neil Anderson, Gayle Batt and Wendy Horman - joining all 14 Democrats to vote against the measure.
Calling the bill "irresponsible," Pocatello Democratic Rep. Elaine Smith said, "Many of our senior citizens are in the middle class, on fixed incomes. And I'm in that group." Smith concluded by saying Moyle's bill was raising taxes on middle class and working families.
But Moyle argued that the tax bill would help "make us more competitive with surrounding states."
The Idaho Center for Fiscal Policy challenged Moyle's fiscal note attached to the bill which says that there would be a gain in General Fund Revenue in Fiscal year 2016. But ICFP says says that there would be a $50 million loss to General Fund Revenue. UPDATE: March 27, 2015
Following a full morning of testimony, including objections from the Interfaith Roundtable Against Hunger, Catholic Charities of Idaho and the Idaho Public Employees Association, the Idaho House Revenue and Tax Committee approved -along party lines - House Bill 311 which would raises taxes on gas by 7-cents per gallon, remove the tax exemption for groceries, lower the top tiers of income taxes and eventually remove sales tax from grocery items.
"When all the provisions in HB 311 are balanced out, the net change is a tax increase for 80-percent of Idaho taxpayers," said Darcy James, Vice Chair of the Interfaith Roundtable Against Hunger. "The grocery tax credit is removed retroactively to the beginning of 2015, while the sales tax on food continues until October 1st. This amounts to double taxation on most Idahoans."
James also pushed back at the tax break for Idaho's wealthiest citizens.
"HB 311 upends the long-standing principle of a graduated income tax," she argued. "Under the proposed flat tax, Idaho's highest tax brackets would enjoy an income tax reduction at the expense of lower brackets."
James later Boise Weekly that she was surprised to be accused of "demagoguing" by Idaho House Speaker Mike Moyle, sponsor of HB 31. "I thought that was a bit unusual coming from him, but the committee was courteous and I appreciate that."
James told BW that she wasn't surprised by the party-line vote, "But our view is that we have to bring these issues to the public, and let lawmakers know that there is another view."
Meanwhile the Idaho Center for Fiscal Policy revealed its analysis of the tax package, challenging Moyle's fiscal note attached to the bill which says that there would be a gain in General Fund Revenue in Fiscal year 2016. But ICFP says says that there would be a $50 million loss to General Fund Revenue.
And IFCP argued that the current grocery tax credit ($100 for individuals and $120 for seniors) is, in fact, a bigger benefit to lower wage earners than an overall sales tax exemption on food. The isolate impact of both of the changes would mean a small increase (about $15 to $30) in taxes paid by the lowest 40 percent of wage earners, according to IFCP. The change would also decrease overall General Fund revenue.
House Speaker Scott Bedke, a co-sponsor of the measure, says he expects HB 311 to come up for debate and vote before the full House by Tuesday, March 31.
ORIGINAL POST: March 25, 2015
No, hell did not freeze over. No, the sun didn't rise in the West this morning. But House Majority Leader Rep. Mike Moyle, the reddest of the red state legislators, proposed a tax increase Wednesday morning.
"With all due respect," Pocatello Democratic Rep. Mark Nye told Moyle. "This is a tax increase proposal by the majority party."
But Moyle, speaking this morning before the House Revenue and Tax Committee stood his ground.
"Yes, it is in fiscal year in 2016," said Moyle. "But in 2017, it changes and it's a tax cut."
Moyle's elaborate proposal, which comes in the final days of the 2015 Idaho Legislature, would increase fuel taxes by 7 cents beginning Oct. 1 of this year and then remove sales tax from groceries and repeal the food tax credit—$100 for most individuals and $120 for seniors. The sales tax on groceries would also be eliminated on Oct. 1 and the removal of the grocery tax credit would be effective Jan. 1, 2016.
While some fellow Republicans questioned Moyle's figures, the majority leader said, "You pick your economist, I'll pick mine."
"If you remember at the beginning of the session, House Speaker (Scott) Bedke told us that we were here to take care of education and to markedly make Idaho a better place to do business," said Moyle. "This bill does it all, except for the education part."
The committee agreed to set a full hearing on the measure, which should attract more than a few supporters and detractors.
"There's something for everyone to love and something for everyone to hate," said Moyle.