by Logan Finney, Idaho Reports
In a single-day special session, the Idaho Legislature approved a new law that will reduce income tax rates, send out another round of rebate checks, and provide additional funding for education.
The Senate voted 34-1 to pass the bill Thursday evening.
The new law will replace Idaho’s tax brackets with a flat 5.8% personal and corporate income tax. It will also issue individual rebate checks for $300, or 10 percent of the 2020 income tax burden, whichever is higher.
“The intent is to provide some immediate tax relief for our citizens,” said Sen. Jim Rice, R-Caldwell, who sponsored the bill in the Senate.
The law also assigns $330 million for public schools and $80 million for a new in-demand careers fund. The funding is earmarked for those categories, but actually spending it is left to a future legislature.
Echoes from the afternoon House debate were present in the Senate, as lawmakers criticized the multiple policy components wrapped into a single bill before voting in favor of the overall proposal.
“I don’t like being forced to vote in support of something that I don’t support,” said Sen. Regina Bayer, R-Meridian. “It’s forcing us to vote in support of one, and vote for another one even though we would rather not – because who doesn’t need tax relief at this point?”
Senate Assistant Minority Leader Grant Burgoyne, D-Boise, said he believed the rebates do not go far enough to help lower income Idahoans, but “I’m not willing to deny them the small chance this rebate will give them.”
Other lawmakers questioned the need to pass the policy in a special legislative session, when the rebate checks are expected to arrive in September but the increased education funding will not be appropriated until next school year.
The legislation also includes an advisory vote for constituents to express their approval or disapproval of the plan. The question will appear on the November ballot alongside a constitutional amendment allowing lawmakers to call themselves into a special session, and voter initiative Proposition 1 which would raise education funding by raising income taxes on corporations and high earners.
“If tax refunds are already disbursed to Idahoans before November, voters may be misled to believe that by voting yes, they will receive more money,” said Senate Minority Leader Michelle Stennett, D-Ketchum. “Or, voters may loudly express their opinion on education, but the advisory question gives them no power.”
Democrats also pointed to the fact that the tax bracket changes will take effect just days after Proposition 1, effectively replacing the initiative whether or not voters approve it this November.
“When they find out they were tricked,” Burgoyne said, “we are going to do some real harm to how people view our elections process.”