Senate Passes Tax-Cut Bill, Sends it to Governor

Date: March 04, 2018

Chief executive's health-care plan dead for the year

State Director Suzanne Budge reports from Boise on the small-business agenda for the legislative week ending March 2

The Idaho Senate approved H463, the big tax conformity/tax cut bill March 1 on a 26-9 vote. Twenty-six Republicans supported the measure, while all six Democrats opposed it. Republican Sens. Dan Johnson, Jeff Siddoway, and Shawn Keough joined Democrats in opposition to the bill.

The $200 million income tax cut had already passed the House of Representatives and will now go to the Gov. Butch Otter for his signature. The measure conforms Idaho’s tax code to the new federal law by doubling the standard deduction removing dependent exemptions.

It also provides additional tax cuts by lowering all personal and corporate income tax rates by 0.475 percent (cutting $159.6 million) and creating a new, nonrefundable Idaho child tax credit of $130 per child (cutting $42 million).

In total, the bill gives $201.9 million in tax cuts, but increases Idaho tax collections by $97.4 million due to the federal law. The net impact to the state is a reduction in revenue of $104.5 million.

The bill’s Senate sponsor, President Pro Tem Brent Hill (R – Rexburg), said, “It’s been five years since we’ve had significant tax relief in the state of Idaho.” Sen. Steve Vick (R – Dalton Gardens) said, “… this is probably not exactly the tax bill I would have crafted. It was a very difficult decision for me to make, but it’s a pretty good bill.”

Health-care Plan Dead for the Year

Governor Otter’s health-care plan failed to garner enough support from House members and was pulled back to the Health & Welfare Committee by its chairman, Rep. Fred Wood. H464, dubbed the Idaho Health Care Plan, intended to address the “Gap Population” for subsidized insurance through the state insurance exchange, while also moving into Medicaid 3,500 of the sickest individuals.

The measure survived a committee hearing but did not have the votes to move from the House to the Senate, effectively killing the proposal for 2018.

State Budget

The joint legislative budget committee, JFAC, continued setting big budgets this week, including for health and welfare, the next big-ticket item after the education budget.

With the budget-setting now well underway, the Legislature is on the downhill side of the 2018 session. JFAC started with the largest agency budgets, such as public education, which accounts for half of the state budget. Once the budgets are set, NFIB expects about two weeks before session adjournment.

Medicaid Budget

JFAC also set the Medicaid budget for next year below the governor’s recommendation, even though it includes two provide rate increases that weren’t included in his budget. The governor’s proposed Idaho Health Care Plan was deleted from the budget as the bill supporting the plan, H464, was unsuccessful in the House.

Overall, the committee set a 9.8 percent increase in state general funds for Medicaid next year. The Medicaid budget totals $584 million in state general funds and $2.4 billion in total funds. JFAC also approved health and welfare budgets for the Division of Public Health Services and the Division of Welfare.

Prior Reports, News Releases, Editorials, Testimony

March 4 Story—NFIB’s Annual Day at the Capitol Achieves its Goal

February 16 Report—Dueling Tax Bills: Governor Otter vs. Senate

February 13 Telephone Town Hall—Audio of Gov. Butch Otter, Lt. Gov. Brad Little in Exclusive Talk With NFIB Members

February 9 Report—Tax-Cut Bill Passes Idaho House

February 2 Report—NFIB Victory: Bill Cutting UI Tax Rates Becomes Law

January 26 Report—Bill Cutting UI Tax Rates Sent to Governor

January 19 Report—Unemployment Insurance Rate Cut on Fast Track for Passage

January 12 Report—Idaho Legislature Returns to Business

January 5 Testimony—NFIB Idaho Testifies on the Small-Business Economy

December 20, 2017 News Release—Poll of Small-Business Owners a Guide for 2018 Legislature

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