(Boise, ID) The Idaho House overwhelmingly passed a $253 million tax cut Monday — after some debate about how the cut might affect education budgets.
House Bill 40 is the largest of a series of proposed tax cuts totaling more than $400 million. It includes a buffet of cuts — including a $12 million income tax reduction for veterans and $1 million break on bullion. But the main course is a $240 million income tax cut, reducing the personal and corporate rates from 5.695% to 5.3%.
Republicans argued that another round of tax cuts would slow the growth of government, while continuing to fuel the economy.
“Tax cuts result in economic growth,” said House Majority Leader Jason Monks, R-Meridian, one of the bill’s co-sponsors. “There’s a reason people are flocking to Idaho.”
Several Democrats debated against the bill, saying it promises lavish tax relief to wealthy Idahoans and meager tax relief to working-class Idahoans.
And amidst political uncertainty — a possible trade war and a potential reduction in the $5 billion in federal funding coming to Idaho — House Minority Leader Ilana Rubel urged caution.
“Even the wealthiest are going to need police and schools to send their students to,” said Rubel, D-Boise, noting that GOP Gov. Brad Little had earmarked $100 million for tax cuts.
Republicans argued that the state has budgeted cautiously in past years — reducing taxes by $4.6 billion over six years, while also putting aside $1.4 billion in reserves. This buffer, they said, is enough to protect schools and other state services from economic turbulence.
“This is true budget control,” said Rep. Josh Tanner, R-Eagle, another bill co-sponsor. “This is true tax relief.”
In the end, HB 40 passed easily with bipartisan support. The 63-7 vote sends the bill to the Senate.
This story first appeared on Idaho Education News.