Gov. Brad Little will call legislators back to Boise for a special session on Sept. 1 — as he seeks a combination of tax cuts and a $410 million infusion of education funding.

Little announced his special session plans in a press conference Tuesday, located at the Ranch Market in Boise. The governor gave his address in the parking lot as Idahoans filled their tanks at the gas station behind him. He was accompanied by House Speaker Scott Bedke, R-Oakley; Senate President Pro Tem Chuck Winder, R-Boise; Sen. Jim Rice, R-Caldwell; and Sen. Janie Ward Engelking, D-Boise. 

The governor hopes to pass a single, far-reaching bill. It would put an additional $410 million into public education, provide a net income tax cut to all Idahoans, and dole out one-time income tax rebates using a record budget surplus. 

“The cost of basic fundamentals to live everyday life has skyrocketed, and schools are faced with the burden of rising operating costs,” Little said Tuesday. “We are now projecting a new record budget surplus — $2 billion — which is hundreds of millions more than we expected. With the emergency before us, we’re going to give it back to the people and help our schools.”

The $410 million in ongoing education spending would go into two funds. A public school income fund would receive $330 million for K-12. The remaining $80 million would go into a new, “in-demand careers fund,” designed to boost worker training; this money would go into higher education and career-technical programs.

The funds would receive a 3% increase each year. 

The bill does not specify uses for the additional education funding, leaving it to legislators to decide how to spend the money during the 2023 session.

The tax relief would take two forms.

• In the short term, Idahoans would receive $500 million in tax rebates, which could begin rolling out in September. Idahoans would get a 10% rebate based on their 2020 income tax payments — or a minimum of $300 for individual filers and $600 for joint filers.
• The bill would reduce individual and corporate income tax rates to 5.8%. This would come just months after Little and legislators agreed to cut corporate and top-end individual income tax rates to 6%. These cuts would come to more than $150 million per year.

The governor says he is confident his proposal will pass, due to significant bipartisan support. The bill has 37 House co-sponsors, a slim majority in the 70-member body. Meanwhile, 25 of the Senate’s 35 members have signed on.

In a statement, Bedke lauded the special session.

“Idaho House Republicans are eager to help in this time of extraordinary need and look forward to convening,” said Bedke. “We cannot afford to sit back and watch as continued mismanagement from the federal government threatens the prosperity of our friends and families.”

House Minority Leader Ilana Rubel cautioned against a spending “shell game.” She wants to make sure lawmakers don’t use the $410 million as cover for cutting education budgets elsewhere. However, she praised the proposed education funding increase.

“We need it desperately at a time when we have over 900 teaching positions across the state that we are struggling to fill because Idaho pays teachers so poorly,” said Rubel, D-Boise. “I caution, however, against taking a premature victory lap. GOP legislators dug such a deep hole in education funding that Idaho will likely remain at best in 49th place nationwide in education funding per pupil, and will continue to require hundreds of millions of dollars to get our school buildings into reasonable condition.”

The special session comes as the fall campaign season is likely to heat up. Little is seeking a second term in the Nov. 8 general election. Bedke, one of Little’s political allies, is running for lieutenant governor. All 105 legislative seats will be on the ballot — although many of these races are uncontested.

Also on the Nov. 8 ballot: Reclaim Idaho’s voter initiative, the Quality Education Act. The measure would generate at least $323 million for K-12, through an increase in corporate income tax rates and income taxes on the state’s wealthiest residents.

If the Reclaim initiative receives a majority vote, it would go into effect Jan. 1. But if the Legislature approves Little’s proposal, this law would go into effect Jan. 3, rolling back any changes made by the Quality Education Act.

Little said Tuesday that his proposal is unrelated to the Reclaim initiative, but added that he believes his is a better option because it completes a similar goal while reducing taxes and providing rebates.

More reactions to Little’s proposal

Reclaim Idaho: Co-founder Luke Mayville said Little’s proposal is “clearly designed” to supplant Reclaim’s initiative, and he said his group will stay the course.

“For the time being, Reclaim Idaho will continue full speed ahead with our campaign for the passage of the Quality Education Act, a common-sense investment that would strengthen K-12 programs and keep more of our teachers in Idaho.”

Mayville criticized Little’s proposed tax cuts, saying they place too great a burden on the middle class, and provide unneeded tax breaks for corporations and the wealthy. But he said the proposed $410 million education funding boost would not have happened if not for Reclaim’s education funding campaign.

“On balance, the bad elements of the governor’s proposal are outweighed by the good,” Mayville said.

Mountain States Policy Center: The newly formed free-market think tank gave Little’s plan mixed marks.

The tax rebates and income tax cuts will help working families, and help Idaho compete with other states, President and CEO Chris Cargill said. But Cargill noted the $410 million education funding boost exceeds Reclaim Idaho’s request by nearly $100 million.

“Unfortunately, increased education spending does not necessarily lead to better outcomes. It will be important for the legislature to confirm the money is being spent wisely.”

Idaho Education Association: In a statement Tuesday, IEA President Layne McInelly said the teachers’ union enthusiastically endorses Little’s efforts.

“If approved, this proposal puts Idaho on the right path to correct long-standing structural funding inadequacies crippling public education,” McInelly said. “IEA members have long called on Idaho lawmakers to lean into their constitutional mandate to create a robust, equitable public school system. Governor Little and legislative leaders have put that opportunity in front of them.”

Idaho School Boards Association: The ISBA, which represents school trustees from across Idaho, said Little’s plan could meet the unique needs of every school, district and community in the state.

“Investing in our public schools is investing in our kids and communities alike,” ISBA President Jason Knopp said. “This proposal shows that we can provide relief to families while still ensuring that we’re meeting the operational needs of our schools so that students in Idaho can thrive.”

Idaho Association of School Administrators: Executive Director Andy Grover said the IASA supports Little’s proposal and views it as evidence of the governor’s dedication to supporting Idaho students. IASA represents superintendents, principals and special education directors across the state.

“The education funding support in Governor Brad Little’s proposal is an important step in addressing the increasing costs of operating and maintaining facilities across our state and staffing them with caring professionals to serve Idaho students,” Grover said.

State Board of Education: Board members will discuss the proposal during their regularly scheduled meeting Wednesday morning. The board will not take a formal position, since Idaho open meetings law requires at least 24 hours before an agency takes an official action. But on Tuesday, board Executive Director Matt Freeman said the bill would be a “long-term game changer for public education at all levels, and the board is eager to have a conversation about it.”

Superintendent of Public Instruction: In a brief press release, Sherri Ybarra said she is grateful to the governor and Legislature for their continued commitment to K-12 education.

“Education has consistently been a top funding priority for the governor and for legislators, and they have been great partners in our efforts to make sure all Idaho students grow and succeed,” she said.

Ybarra is finishing up her 8-year run as Idaho superintendent, after losing her May primary race. Republican nominee Debbie Critchfield won the primary, and will face democratic nominee Terry Gilbert in November.

Debbie Critchfield: The Republican state superintendent’s nominee voiced her support for the proposal on Twitter.

“With a record surplus and growing concerns in our local communities about how we fund education, I support Governor Little’s call for a special session to increase funding for education without increasing taxes,” Critchfield said.

Idaho Education News reporter Kevin Richert contributed to this report.

This is a developing story. Check back for updates.