BOISE, Idaho — Gov. Brad Little is calling a special legislative session to address inflation, he announced during a press conference Tuesday.
"We are now approaching a new record budget surplus," Little said. "We have a duty and an obligation to put more of Idahoans hard-earned cash back in their bank accounts."
Little announced the session will begin 8 a.m. September 1 and will use the state's $2 billion projected surplus. Little said the session will focus on a single bill to be considered by Idaho lawmakers and will include "immediate" tax cuts, on-going tax cuts for everyone including lower, flat income tax and "historic" on-going education investments. The new tax rate will be 5.8% flat tax rate for everyone, with the first $2,500 for single filers and $5,000 for joint filers being exempt.
"We’re calling an extraordinary session to address the crushing impacts of historic inflation on Idaho families and schools," Little said. "The cost of basic fundamentals to live everyday life has skyrocketed, and schools are faced with the burden of rising operating costs. Idaho’s powerful economic engine, combined with years of fiscal conservatism in state government, mean tax revenues have outpaced government spending, month after month, year after year. As a result, we are now projecting a new record budget surplus — $2 billion — which is hundreds of millions more than we expected. With the emergency before us, we’re going to give it back to the people and help our schools."
Little said he is "confident" the legislation will pass due to bi-partisan support and co-sponsors from both sides of the aisle.
"It’s very clear that as families work to make ends meet under the pressure of rising costs of basic necessities created by an inept Biden administration, that emergency relief is absolutely necessary," House Speaker Scott Bedke said in a statement. "Idaho House Republicans are eager to help in this time of extraordinary need and look forward to convening on September 1, 2022. We cannot afford to sit back and watch as continued mismanagement from the federal government threatens the prosperity of our friends and families.”
The bill includes tax rebates for Idahoans who filed income tax in 2020. The rebate amounts to 10% of the tax paid in 2020, or a minimum of $300 for single filers and $600 for joint filers.
Miguel Legarreta, president of the Associated Taxpayers of Idaho thinks this rebate, along with the new tax changes, is a good thing for Idahoans during trying economic times.
“While tax reform is complicated and there is so many things to look at, with our record surplus this is a simple way to say ‘here is some money in your hands today, some cuts going forward, and we continue to work on things as we go.” Lagarreta said.
Conflict with Quality Education Act
If passed the bill would repeal the Quality Education Act Initiative by Reclaim Idaho if the voters give it the green light in November. But Little said that’s not his intention.
“The intent is to get money back into the pockets of Idahoans because of inflation right now," Little said. "Obviously, the easiest and simplest way to get it done is to give money back into the pockets of people who are suffering the ravages of inflation and ensure education funding increases going forward.”
Both looking to fund education in Idaho, but in slightly different ways.
The Quality Education Act would be paid for by restoring the corporate income tax rate to 8% and adding an income tax on the amount an individual earns above $250,000 a year or the amount a married couple earns above $500,000 a year.
Luke Mayville, co-founder of Reclaim Idaho, said while this proposal by Little is a victory for education, there are some flaws.
“The proposal contains some bad elements. For one, it is clearly designed to supplant the Quality Education Act— an initiative that earned a place on the ballot after gaining the signatures of over 100,000 Idahoans," Mayville said. And when it comes to tax policy, the Governor’s proposal overburdens the middle class and gives unneeded tax breaks to large corporations and the wealthy. But on balance, the bad elements of the Governor’s proposal are outweighed by the good.”
More information on the upcoming Special Session is available here.
Watch the full announcement here: