The Senate approved a set of income tax cuts and rebates Monday, sending them to Gov. Brad Little’s desk for approval.

The $383 million in cuts were pushed by Statehouse Republicans, who say lower taxes are key to economic competitiveness, especially as Idaho looks to attract business growth. But critics argue the state is growing quickly enough as it is; they contend that Idaho’s budget surplus should be used to “properly fund” services such as schools and public transit. They also called the tax cuts regressive, bestowing most benefits on the rich.

But by the end of the day, House Bill 380 passed 27-8, largely along party lines.

The bill, if signed, would lower income and corporate tax rates, provide a one-time tax rebate and cut the number of income tax brackets from seven to five. The change would reduce the state’s top income tax bracket from just under 7 percent to 6.5 percent. The cost: $383 million the first year and up to $171 million each year after, according to an Idaho Center for Fiscal Policy report.

Contention over state education funding took center stage at a few points in Monday’s hour-long debate.

“The education budgets not impacted. The capital construction or rainy-day funds — all of those things are included,” said Sen. Steve Vick, R-Dalton Gardens. “We haven’t reduced any of those to pay for this legislation. … I believe this is a good step forward to keep us competitive with our surrounding states.”

The cuts would mostly be paid out of the state’s tax relief fund – a pool of money from online sales taxes — not out of school budgets, said Sen. C. Scott Grow, R-Eagle.

But Democrats said tax relief money should be used to boost state education funding, allowing districts to reduce the  property taxes they pull through bonds and levies. Most districts use property taxes for operational expenses.

“Those are levies that our school districts are forced to run because we are not adequately funding them at the state level,” said Janie Ward-Engelking, a retired teacher and Boise Democrat.

Tom Lamar, a Latah County commissioner filling in for the absent Sen. David Nelson, D-Moscow, decried the cuts.

“The concern that I have, is that if at the state level, we do not properly fund education, if we do not properly fund roads, then we’re forcing our local voters to raise taxes on themselves at the property level,” said Lamar.

Democrats also called the cuts regressive, citing the Idaho Center for Fiscal Policy report. The report called the cuts “heavily lopsided;” they would provide, on average, an $82 cut for the lowest earners and an $8,883 cut for Idahoans with incomes in the top 1 percent in the state.

Democrats and Republicans largely adhered to party lines on that topic. But then, debate became religious.

“Frankly, I don’t agree that the income tax if it’s at a flat tax is regressive,” said Sen. Jim Rice, R-Caldwell. “I also happen to be Christian, and apparently God agrees with that … because he didn’t ask for a different rate from different people. A tithe is 10 percent, and he asked the same from everyone.”

Said Sen. Melissa Wintrow, D-Boise, “I guess I was taken by (Rice) when he talked about Jesus Christ … especially since Jesus Christ was also a strong advocate for the poor.”

Lewiston Republican Dan Johnson was the only legislator to cross the aisle, voting “no” alongside Democrats, though other Republicans cited concerns with the cuts.

Proposals to recess, strip emergency powers resurface

The House Ways and Means Committee Monday quickly introduced draft bills targeting gubernatorial emergency powers and a revised proposal to give the long legislative session a path to recessing.

House Concurrent Resolution 22, planning for a legislative recess, got a rewrite; that resolution would allow the Legislature to recess until September without ever officially adjourning. The new version makes a technical clarification and ensures that interim committees and working groups could continue meeting during the recess.

HCR 22 was first designed to allow the Legislature to reconvene upon the full release of U.S. Census data, said House Majority Caucus Chair Megan Blanksma, R-Hammett. The resolution could be “a ticket out” of the now third-longest legislative session in state history, she said on April 26, before the Ways and Means Committee passed her initial proposal.

By recessing rather than officially ending the session, the Legislature could effectively call itself back into session without the governor’s authority. Under the new resolution, lawmakers wouldn’t be paid during the recess, which Blanksma said would save taxpayers up to $139 per day, per legislator.

Committee Republicans also unveiled three new proposals aimed at stripping gubernatorial power during states of emergency. The draft bills would break key components of House Bill 135, an emergency powers bill, into individual bills. The Senate could vote to override Gov. Brad Little’s recent veto of HB 135 soon, so the new legislation could serve as a backup plan for Republican lawmakers set on stripping executive authority.

“It makes it, I think, a little cleaner this way,” said Assistant Majority Leader Jason Monks, R-Meridian. “If you have a concern with one of (the bills), you might be able to support the others … without jeopardizing the entire” effort.

According to Monks, the three “key components” broken out in the new draft bills are:

• Reiterating that constitutional rights “don’t go away” during states of emergency.
• Clarifying that the governor can’t create or amend laws during states of emergency.
• Ruling that job-related restrictions during states of emergency must apply to all workers, regardless of industry; classifications like “essential” worker designations could not be used in emergency orders.

The new bills are the latest development in Republican lawmakers’ collective recoil against Little’s unilateral handling of the coronavirus pandemic.

If the Senate does override Little’s veto, the new bills would be rendered moot.