Governor takes aim at regulations with two executive orders
State Director Suzanne Budge reports from Boise on legislative activity as of February 10
With a new governor (and his new administration, personal staff, and numerous new appointees), a large class of freshman legislators, and an unprecedented number of new committee chairman in both House and Senate, the early days of the 2019 legislative session have been busy, but remarkably slow in terms of new bills and rules’ approvals.
New legislation is down by more than 20 percent in 2019. This is probably a good thing, all in all. We don’t necessarily need a whole bunch of new laws just to show we can make them. Action does not always equal progress in the halls of the Idaho Statehouse.
That said, we are now entering the sixth legislative week, and many of the major issues anticipated for 2019 have yet to emerge as formal proposals in bill form. The two elephants in the room – Medicaid expansion and a rewrite of the Idaho education funding formula – have not yet appeared. We don’t know what these laws will look like, but we do know this: The vast majority of Idaho’s revenues every year will go to fund Idaho’s K-12 schools (about 50 percent of all general fund money) and health and welfare programs (85 percent of which goes to run the Medicaid program – and that is about to get much bigger).
Medicaid Expansion
Idaho voters approved Proposition 2, expanding Medicaid to 138 percent of the poverty level. Now, the Legislature must figure out what to do:
- Fund it in whole without sideboards?
- Fund it with sideboards such as work requirements?
- Or, the unlikely scenario – ignore the will of 61 percent of Idaho voters who supported the ballot initiative and don’t fund it all?
Paying the bill for the first year seems doable – borrow from the Millennium Fund and existing budgets. The real question is how to pay down the road. The Medicaid budget is ever increasing, and although the federal government pays the bulk of the costs (approximately a 70/30 split for current Medicaid population and 90/10 split for the new group), the expansion population is a big unknown.
Idahoans voted to expand Medicaid but not how to pay for it. This is the dilemma faced by the Legislature – how to pay for health care for 60,000 to 100,000 new individuals (no one really knows for sure, and we won’t until the bills come in).
Funding K-12 Education
Overhauling the formula for how the state funds public schools is the other big-ticket item for 2019. At nearly half of the state budget, and a priority for every school district, parent, and teacher in the state, this is a tough nut to crack.
Everyone hates the current system, which is overly complicated and built for a 19th Century world. The noteworthy goal for a new formula is for money to follow the student. But any significant reform will disrupt the current system, creating winners and losers across the state.
Unlike Medicaid expansion, which arrived on the legislative doorstep just a few weeks before the session started, the discussion of school funding has been a four-year project. But in the end, that won’t make this any easier. On the contrary, education funding has such a widespread impact on Idahoans that rewriting this formula and finding the money to pay for it might just make Medicaid expansion look easy.
In the coming weeks, we are about to see what legislators can agree on. Don’t expect it to be easy, or pretty. As Mark Twain put it, “Those that respect the law and love sausage should watch neither being made.”
Other Issues NFIB is Watching in 2019
February 11 is the last day to introduce bills without going through a privileged committee, so while we are always on the lookout for proposals that impact small business, the window or opportunity is closing for new bills to come forward. Here are a few issues we expect to emerge in the 2019 session.
- Minimum Wage – there are several proposals related to minimum wage: allowing local jurisdictions to set their own minimum wage, raising the minimum wage above the federal level, and indexing the minimum wage to increase automatically. NFIB opposes all of these.
- Local Option Tax Authority – NFIB has consistently opposed giving local government the ability to impose their own sales tax. This is always a simmering issue and we expected to see legislation in 2019. It hasn’t appeared, yet, but we know the proponents are anxious to move this idea forward.
- Sales Tax on Services – Broadening sales tax to include the service sector is a huge non-starter for small and independent businesses. NFIB has adamantly opposed the idea for years, and we will remain vigilant to resist the siren song of tapping into the “modern economy” as proponents espouse. Sales tax is the biggest portion of state revenues and growing that pot will not only take money away from your business investment, but it will grow government disproportionately.
- Idaho Tax Code Vs. The Feds – Last year, legislators adopted a significant new tax structure when we conformed with the federal tax changes made in 2018. The idea was for Idahoans to reduce their tax burden, and we saw significant tax cuts put in place at the state levels. We are not quite sure how that is all going to work out though, and in the past few months, uncertainty has risen about projections, and revenues are lower than expected. Budget writers are assuming the funds will come in after April 15 Tax Day, but meantime, our conservative legislators are minding their pennies.
Governor Lifts the Regulatory Red Tape
NFIB members were thrilled to hear that one of Gov. Brad Little’s priorities is cutting rules and regulations and lifting some of the regulatory burden government all too often imposes on businesses and individuals. And he’s wasting no time getting to it. At the end of his first month in office, the new governor issued two executive orders: the Red Tape Reduction Act and the Licensing Freedom Act of 2019.
The Red Tape Reduction Act (Executive Order 2019-02) requires state agencies that have authority to issue administrative rules to identify at least two existing rules to be repealed or significantly simplified for every one rule they propose.
“Excessive regulation at all levels of government can impose high costs on businesses, inhibit job growth, and impede private sector investment,” Governor Little said in the executive order.
Idaho’s administrative code includes 736 chapters and 8,278 pages of regulations and at least 72,000 total restrictions.
Licensing Freedom Act of 2019. Governor Little also signed Executive Order 2019-01. The executive order puts in place sunrise and sunset processes for future occupational licensing laws. The recommendations came from a report then-Lt. Governor Little finalized in 2018 outlining the scope of occupational licensing in Idaho. The report found at least 442 different occupational license types administered by 13 executive branch agencies and 47 boards and commissions and at least 204,000 licensees in Idaho. The report identified 241 recommendations for improvement, modification, or elimination of licensing requirements or other regulatory burdens.
“Onerous and outdated regulations in state government present barriers to independence and prosperity for Idahoans,” Governor Little said. “The two executive orders I signed today help simplify Idaho state government and make it more accountable to citizens.”
2019 Idaho Small Business Day Legislative Reception
As it does every year, NFIB is co-sponsoring an Idaho Small Business Day Legislative Reception. This year’s is February 27 at Beside Bardenay, 612 W Grove St, Boise, from 5 p.m. to 7 p.m.
At these receptions, NFIB members have a rare opportunity to hear directly from and talk directly to the elected official who make the laws their enterprises must operate under. This setting also provides your business with a great opportunity to discuss individual issues your business is currently facing.
This event is free but a reservation is required, which can be made by clicking here.
Previous Reports and News from the State Capitol
January 7—Poll: Idaho Legislature Would do Best not to Interfere
January 6—NFIB Idaho Addresses Legislative Committee
