It was a big year for tax relief, reports State Director Suzi Budge reports on the small-business agenda
Nearly a thousand bills were considered in the 2018 session. NFIB monitored 50 bills and paid close attention to a dozen. The following are some of the victories NFIB helped obtain for small business.
By the Numbers
Significant tax relief has been a priority for Idaho legislators in recent sessions, but this year, they finally got it done:
- $142 million in tax relief to individuals and businesses in the state
- Conformity to the new federal tax cuts, with Idaho income tax rates reduced by nearly half a percentage point
- A new child tax credit of $205 for eligible children.
The net impact of the Legislature’s tax package – $129.5 million less revenue to the state’s General Fund (a.k.a. $129.5 million in tax reduction to Idaho taxpayers).
Oh yes, and the Legislature still added $100 million more to education for the fourth year in a row.
Won Significant Tax Relief
- House Bill 463 conforms Idaho law to federal law for 2018 and future years; revises the calculation of net operating loss, of net taxable income for corporations; reduces the individual and corporate income tax rates and provides for a child tax credit. NFIB lobbied for this conformity and for simplicity of tax compliance worth $142 million in tax relief to individuals and businesses in the state and a $205 new child tax credit for eligible children.
- H355 conforms Idaho tax code for the tax year 2017 to federal law, with limited provisions specific to Idaho tax law. NFIB encouraged the Idaho legislature to conform to federal tax law to align state and federal provisions, for simplicity and tax compliance.
- H335 cuts unemployment insurance rates cut by reducing the taxable wage rate fund size multiplier from 1.5 to 1.3 and authorizes the Labor Department Director to adjust the taxable wage rates under certain circumstances. Estimated to save employers $120 million over three years, H335 was the first bill of the 2018 session. Fast-tracked for early passage, it was sent to Gov. Butch Otter following unanimous approval by both the House and the Senate. The bill, retroactive to Jan. 1, 2018, is projected to save businesses $41 million in this year alone. NFIB State Director Suzanne Budge testified in support of the bill, which is expected to reduce unemployment taxes by 30 percent. The rate change maintains adequate reserves in the UI fund, which has more than $700 million and is on track to be above and beyond what the federal government recommends, starting this year.
- Small businesses will also benefit from a workers’ compensation rate drop due to the federal Tax Cuts and Jobs Act. Idaho’s workers’ compensation rates will decrease by 3.4 percent effective May 31, and this follows a 5.8 percent decrease on January 1, 2018. The National Council on Compensation Insurance (NCCI) made filings in five states, including Idaho, for rate reductions due to the new federal tax law. The law reduced the corporate tax rate from 35 percent to 21 percent, prompting NCCI to make the “law only” filing. The federal tax cut affects the profit and contingency provision of the workers’ compensation rate, as well as the tax treatment of underwriting income, the post-tax return on investment, and the post-tax cost of debt capital. NFIB State Director Suzanne Budge serves on an NCCI committee on behalf of small business.
Protected Private Property Rights
- H447 revises which property is subject to civil forfeiture and protects property that does not have a meaningful connection to trafficking crimes. NFIB supported protections of private property in 2017 when the bill was vetoed and again in 2018.
- H658 amends civil, criminal, and hunting laws regarding trespassing on private property to make them more uniform in three key areas: posting requirements, penalties and damage awards, and exceptions to the trespass laws. NFIB has always supported private property as a fundamental constitutional right.
Secured Transparency and Good Government
- H606 amends the Open Meetings Law to including public agencies established by executive order of the governor.
- H611 requires meeting agendas for government entities be posted online if that entity has an online presence and requires that “action items” be labeled on the agenda. NFIB supports more transparency in government including proper public notice of actions that impact citizens and taxpayers.
Increased Health Insurance Access
Senate Bill 1288 provides that foreign insurers licensed to sell individual or group accident and sickness insurance in another state may offer and sell individual or group accident and sickness insurance in Idaho as long as the coverage meets Idaho’s insurance laws. NFIB supports selling across state lines to provide wider access to more affordable insurance plans.
Health Care
Idaho made national headlines in 2018 with Governor Otter’s bold move on health insurance. Click here for a special story with more details.
NFIB Member Events
Putting its members in direct contact with top policymakers is one of the benefits in belonging to NFIB. Two events, in particular, this year allowed NFIB members to hear directly from and talk directly to the people who affect their right to own, operate, and grow their enterprises.
- February 13 Telephone Town Hall with Gov. Butch Otter and Lt. Brad Little – NFIB hosted a telephone town hall for its Idaho members. For nearly an hour, several hundred members jumped at the chance to chat with the governor and lieutenant governor about state-based Health Plans and about their plans for reducing premium costs and providing access to more flexible insurance products. Our conversation with Idaho’s top elected officials covered the waterfront from tax relief to health insurance to regulatory reform and everything in between. Members called in from across Idaho to join in the conversation. Telephone town halls are a great way to keep our members in touch with what’s going on at the Statehouse without the having to leave their businesses. Click here for an audio recording of the town hall.
- February 27 Legislative Briefing and Reception — Lawmakers joined NFIB members for our annual legislative reception hosted jointly by NFIB and the Idaho Retailers Association. We were pleased that our members used this opportunity to once again meet with lawmakers and Lt. Gov. Brad Little to share their stories and priorities for the Legislature. Members met earlier in the day for a legislative briefing from State Director Suzanne Budge.
State Economy
Idaho’s economy continued to strengthen, with the state ranked as one of the fastest growing in the nation with a record low unemployment rate. Revenue projections are exceeding expectations by more than $110 million. Including fiscal year 2019, Idaho is experiencing the eighth consecutive year of economic growth. The original revenue forecast was increased mid-session from $3.78 billion to $3.82 billion. Click here for a start-of-session video of State Director Suzanne Budge’s testimony on the Idaho economy.
Follow the Money
- FY2019 State of Idaho General Fund Total Appropriations equals $3.653 billion, a 5.9 percent increase over FY2018.
- Public education funding increased by $100 million, 5.9 percent over FY2018.
- Public schools (K-12) account for 48.4 percent of the state general fund at $1.7 billion.
- All education accounts for 62.3% of General Fund Total Appropriations at $2.171 billion.
The 2018 Legislative Session
- Wednesday, March 28 marked the close of the Second Regular Session of the 64th Idaho Legislature, when lawmakers adjourned sine die on the 80th legislative day.
- 995 bills were prepared, compared to 1024 in 2017.
- 355 bills passed both houses and 340 were signed by the governor. Thirteen bills became law without his signature. Two bills were vetoed.
- For the previous session, the bill count was 345 passed, 330 signed, seven became law without signature, eight were vetoed.
- 51 Resolutions/Memorials were adopted in 2018, compared to 49 in 2017.
- Both 2017 and 2018 legislative sessions lasted 80 days
- 1,103 pages of legislation passed in 2018, compared to 1217 in 2017.
Interim Committees
The Legislative Council met March 15 and approved the eight interim committees that will meet between the 2018 and 2019 legislative sessions. They are
- Public School Funding Formula Interim Committee
- Campaign Finance Reform Interim Committee
- State Employee Group Insurance Plan Interim Committee
- Commercial Vehicle/Farm Vehicle Registration and Operating Fees
- Criminal Justice Reinvestment Oversight Committee
- Idaho Council on Indian Affairs
- Natural Resources Interim Committee
- Study of Occupational Licensing and Certification Laws/Regulatory Reform Committee
