Attorney-pay rules for frivolous lawsuits a big victory for small business
NFIB/Idaho State Director Suzanne Budge reports from Boise on the small-business agenda at the end of the legislative session.
A highly contentious session between the House and Senate made passing legislation beneficial for small business highly difficult. NFIB did succeed in eking out three victories of importance to Main Street enterprises.
Won Loser Pays Rule for Frivolous Lawsuits
With strong backing from NFIB, House Bill 97 restores in state statute the rule of making the losing party who brought a frivolous lawsuit also pay the attorney fees of the defendant. This restoration overrides recently modified Idaho Supreme Court Rules. H97 passed the House 61-8, passed the Senate 34-1, and was signed by Gov. Butch Otter. NFIB is part of Idaho Liability Reform Coalition. A frivolous lawsuit is no small matter for small businesses which often have to consider settling an unfair claim on them in order to avoid paying further attorney costs.
Defeated Minimum-Wage Increase
NFIB reminded legislators of the minimum wage’s central role in serving as an entry-level wage for teens and young adults starting out on their working lives and the damage done to those opportunities when minimum-wage rates are increased. For the small minority of minimum-wage workers not still living at home, increasing the rate lifts no one out of poverty. House Bill 72 would have increased the minimum wage annually from its current $7.25 per hour to $8.75 (7-1-17), $10.50 (7-1-18), $12.00 (7-1-19), and, in 2020, indexes the wage increase thereafter to the Consumer Price Index. The bill did not get a hearing in the House.
Secured Balanced State Budget Without Raising Taxes
Balancing the state budget is every legislature’s No. 1 job in the nation. Doing so without further burdening every state’s top job-creators, small-business owners, is the trick, which, with a constant reminder from NFIB, Idaho’s lawmakers managed to pull off.
Secured Stable Local Government Spending
Cities, counties, and special taxing districts are limited by state law to no more than a 3 percent increase in their budgets every year. House Bill 207 now gives them the flexibility to set a budget less than 3 percent but also allows them the ability to release any forgone balances so they are not added to future budgets, which keeps a rein on government spending and higher property taxes. With the support of NFIB, H207 passed the House 65-4 and passed the Senate 27-8 and was signed by the governor.
More than a thousand bills were considered in the 2017 Idaho legislative session. NFIB/Idaho monitored 60 bills and paid close attention to a dozen. The following are ones that failed to pass that NFIB will consider lobbying again for the second half of the legislative session in 2018.
Federal Balanced Budget
NFIB members strongly support a balanced budget amendment (BBA) to the U.S. Constitution. NFIB worked closely the national BBA Task Force association and the American Legislative Exchange Council for passage of Senate Concurrent Resolution 108, which unfortunately failed in the Senate on an 11-24 vote. Senator voting ‘no’ had expressed their concern with a constitutional convention being the right approach.
Personal Property Tax
House Bills 68 and 117 would have amended existing law to increase the maximum exemption from personal property tax from $100,000 to $250,000. NFIB supports raising the exemption to $250,000 and prefers complete elimination of this outdated tax. The bills did not get a hearing in the House Revenue and Taxation committee.
Income Tax Reduction/Grocery Sales Tax Elimination
House Bill 67 started out as an income tax reduction and ended up as a proposal to remove sales tax from food. H67 originally eliminated the first $750 of individual income tax and reduced the individual and corporate tax rate to 7.2 percent. The Senate amended H67 to remove the income tax provision and insert elimination of the sales tax on food. The bill passed both House and Senate by large margins but was vetoed by the governor. NFIB supports reducing income taxes.
Property Taxes
House Bill 83 would have removed certain exempt property from the tax rolls, thereby reducing the dollar amount of property taxes available for the annual budget. H83 passed the House 59-11 but didn’t get a Senate hearing. NFIB supports reducing property taxes.
Eminent Domain
Senate Bill 1054 would have changed the procedures for determining property value and requires highest and best use as part of valuation in condemnation. The bill did not progress past a Senate committee. NFIB supports protecting private property values.
Health Savings Accounts
Senate Bill 1046 would have required the state to offer state employees a health savings account and to fund the account for each employee with an HSA at $500 annually. S1046 passed the Senate 34-0 and passed the House 45-25 but was vetoed by the governor. NFIB supports flexibility and choice in health insurance products.
Unemployment Insurance
Senate Bill 1195 would have reduced the taxable wage rate used to determine employers’ unemployment insurance taxes by adjusting the unemployment fund size multiplier downward. This bill would have resulted in substantial net tax savings to Idaho employers. S1195 passed the Senate, was amended in the House to include language to reduce income tax rates and was then killed in the Senate. NFIB supports lower unemployment and income taxes.
By the Numbers
- 5.4 percent increase in Idaho state budget for a total $3.5 billion
- Public education funding increased by $100.6 million, primarily for teacher salaries, a 6.3 percent over FY2017.
- Public schools (K-12) account for 48.3 percent of the state general fund at $1.7 billion.
- Transportation: $300 million to maintain roads and ease congestion
- Emergency Road and Bridge Repair: $52 million for emergency flood damage repairs
- Length of session: 80 days (75 days in 2016)
- New Legislation prepared: 785 (831 in 2016)
- Bills passed: 345 (379 in 2016)
- Bills vetoed: 8 (2 in 2016)
- Pages of passed legislation: 1,217 (1,512 in 2016)
What’s in the Piggy Bank?
Idaho weathered the great recession by drawing from several “rainy day” funds. These reserves helped keep the state budget in balance without shifting the burden to taxpayers, as was the case with many other states. Idaho lawmakers can be commended for maintaining structural balance in the state budget and doing it without raising taxes. Idaho’s current reserve funds held $310 million at the end of FY2016, enough to fund the state for 37 days using reserves alone. The state piggy banks reached a high-water mark of $400 million in 2006, just prior to the economic downturn.
