Idaho’s 2014 Legislative Session by Senator Brent Hill

Economic development and public education dominated this year’s legislative session. Strengthening our education system and enhancing our business-friendly environment help create jobs, raise standards of living, and provide opportunities. Idaho is truly becoming the state of choice for doing business and raising families. Thank you for the privilege to represent Madison County and the Republican Party. It has been a great honor.With the 2014 legislative session recently concluded, I wanted to share with you some thoughts and highlights of this year’s activity:

Restoring Public Education

The public education budget enjoyed a $66 million boost, making it the best budget since 2008. The Legislature approved the 5.1% increase—well above the 2.9% recommended by the governor. The new budget includes:

$35 million to help restore operations, a 12% increase
Increasing operations money for each classroom unit from $20,000 to $22,401
$27.3 million more for teacher pay, a 3.8% increase
$8 million for classroom technology
$4 million for books and other curriculum materials

Future years also look good for education funding as we continue to implement the recommendations of the governor’s Task Force for Improving Education.

Easing Tax Burdens

Even during the economic turndown over the past six years, Idaho has been reducing tax burdens while many other states have been raising taxes—making Idaho an even more attractive place to live and do business.

Each year since 2008, the Grocery Tax Credit has been increasing and will soon top out at $100 per household member. That represents an ongoing tax cut of over $122 million/year.
In 2012, the Legislature reduced the corporate and individual income tax rates, resulting in almost $38 million in tax saving. Idaho’s 7.4% marginal rate is now the lowest it has been since 1934.
Last year, we freed over 90% of Idaho’s businesses from paying personal property tax by exempting $100,000 of a business’s tangible personal property from property taxes. That left another $20 million/year in small businesses to help them grow and create jobs.

As a result of these tax relief measures, Idaho residents now enjoy the second lowest overall tax burden per capita in the nation—31% below the national average.

Business Development Incentives

I hate to see bidding wars with other states to attract new businesses using direct payments or special tax incentives, but Idaho has been at a competitive disadvantage without the ability to offer targeted financial incentives to encourage existing Idaho businesses to expand and new business to locate here.

That changed this year with the passage of the Idaho Tax Reimbursement Incentive Act. Both existing and new companies considering expansion in the state can now negotiate for the incentive based on the quality of the jobs created, regional economic impact, local matches, and return on investment. The program would allow the business to recoup up to 30% of new income, sales and payroll taxes paid as a result of the expansion, but only after it has proven to have met expansion commitments. The duration of the deal, up to 15 years, would also be negotiated. Companies in rural areas would have to create at least 20 new jobs, while companies in urban areas would have to create 50 jobs, all of which pay more than the average in the county where those jobs are located.

Although Idaho lacks many of the financial inducements offered by some states, this incentive allows us to compete for business expansion without risking taxpayer dollars.

Justice Reinvestment Program

Idaho has undergone a complete analysis of its justice system from the courts to the prisons, from the treatment of mental illness to parole practices. This year we began a series of legislative policy changes designed to improve public safety, reduce costs, and reinvest savings in strategies that can decrease crime and strengthen neighborhoods. Depending on the degree of implementation, this program could avert between $221 and $288 million in corrections costs by 2019. It is an exciting project, promising not only to save money, but to better prepare offenders for success as they re-enter society and reduce recidivism.

Legislative Oversight Authority

Idaho is one of the few states in which the legislature has the power to review the rules and regulations promulgated by government agencies and reject any that are unnecessary or contrary to legislative intent. This legislative authority prevents non-elected bureaucrats from expanding government and over-regulating our citizens. To codify this oversight authority, the Legislature has proposed an amendment to the Idaho Constitution that will be before the people on the November ballot.

Hundreds of bills are considered during the legislative session. Only a fraction of them ever become law. Our responsibility as Republicans is not only to enact good legislation, but also to protect us against legislation that might endanger our freedoms. Your input is always helpful and welcomed. Please keep your ideas coming.

My email address is bhill@senate.idaho.gov.