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Tax cuts on aisle four
March 10, 2017
By Idaho Representative Ron Nate

When you hit the neighborhood grocery store for your weekly shopping trip for eggs, milk, bread, fruits, and other staples, you pay the cost of the groceries plus an additional six percent for the state sales tax going to the state general fund.

The grocery tax brings in about $187 million for the state budget.

Last week, Senator Cliff Bayer presented his plan to exempt all groceries from the sales tax while eliminating the grocery income tax credit. The proposal would provide immediate tax relief to every Idahoan.

It would reduce revenue coming into the state budget, but would also reduce the "payouts" from the budget toward the grocery tax credit.

On net, the bill would diminish revenues by $18.6 million in 2018 (half a fiscal year), and $26.1 in 2019. This means Idahoans would have that many millions more to spend on other things. Also, there would be more economic activity from increased grocery sales in Idaho and other increases from Idahoans who have more money left to spend in other parts of the economy.

Senator Bayer's proposal has broad support. It's not very often a piece of legislation in the Capitol has more than 10 co-sponsors. So, when this tax cut plan comes out with 48 co-sponsors, it raises eyebrows.

I am proud to be a co-sponsor.

In a legislature with 105 legislators, 48 co-sponsors is a strong signal. To be a co-sponsor is more than just a commitment to vote for the bill; most legislators see co-sponsorship as tantamount to carrying the bill themselves. There are no doubt many others who would vote for the bill even though they are not co-sponsors.

The bill is a slam dunk, right?

Well, not quite. One of the hallmarks of the 2017 legislative session is the debate over committee chairs holding onto bills and not scheduling hearings. The grocery tax bill is one of those bills.

Despite its amazing support, the chair of the House Revenue and Taxation Committee has so far declined to set a hearing for the bill.

With the huge budget surplus this year, estimated at nearly $140 million, tax cuts should be the legislature's first instinct. However, money to spend on more or bigger government programs also looks good to some moderate and liberal legislators.

Unfortunately, it appears some of our legislative leaders are among the legislators who are more interested in spending than cutting taxes this session.

Personally, I have no doubt the bill would sail through committees and through both chambers if it were allowed hearings and floor votes. Hopefully the bill will be scheduled soon.

Idahoans deserve tax cuts after so much overspending the past few years.
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