[Vision2020] Week 2 Legislative Update from Rep. Trail

[ttrail at moscow.com]

Constituents:
 
Concerns about the future of the Idaho Economy dominated much of the
discussion of the first week of the 2008 Legislative Session.   The
Governor's adjusted forecast for FY2008 is for a 3.5% increase over last
year's general fund revenues.  The Governor's FY2009 revenue growth was
forecast at 3.4%.  Although the revenue growth currently is strong, some
uncertain economic conditions from slowing construction and real estate
could be reasons for the Governor's more cautious growth estimates.  JFAC
is now in the process of making its own forecasts.
 
Idaho's jobless rate is now running about 3% which is below the 5% national
average. However, Idaho tends to run about 6-12 months behind the national
economy.  The State has a surplus in excess of $200 million.   Governor
Otter wants to expend some of the funds on one-time projects, but is very
cautious about committing money to ongoing projects.   One of the on-going
projects was Superintendent of Instruction Luna's Teacher Merit Pay
Proposal which would have had a cost of $60 million or up to $110 million
if fully implemented.  Luna's plan was not mentioned in the Governor's
State of the State address.  The talk around the capitol annex is simply
that the plan is too expensive under the current economic outlook.    

Some other items of note:
 
 1.  Grocery Tax Credits  --  Last year everyone submitted a plan at
eliminating the tax on groceries but nothing passed.   The Governor is
coming back with his plan that would provide up to a $90 tax credit to low
income individuals.   One of the problems is that in order to get the
credit you must file an Idaho income tax and many individuals are simply
too poor to file - hence they do not get the credit.   Some accommodation
will need to be made to take care of these low income citizens.
 
 2.  Elimination of the Business Personal Property Tax  --  Businesses
currently pay tax on business items such as equipment.   The current
thought is that elimination of this tax would serve as a stimulus to Idaho
small businesses.   We have about 2,300 small businesses in Latah County. 
 However, the elimination of the tax would mean that the county would have
to come up with $4 - $5 million over a number of years to replace lost
revenues.   This means that property taxes would increase; however, the
sponsors of the bill indicate that counties would be held harmless and not
suffer any loss of revenue.   The revenue replacement source has yet to be
defined.  Under this condition I can support the legislation because it
would help our small businesses and not increase property taxes.
 
 3.  Dog Fighting/Felony Penalty  --  Sen. Brad Little introduced the bill
for print today in the Senate.   We have over 30 co-sponsors for the
legislation.  I met with the Farm Bureau today and they support the bill. 
 They have opposed the measure during the past three years.   The Michael
Vick case and the fact that two people in Oneida County pleaded guilty to
running a dog fighting ring will hopefully help passage of the bill.
 
 4. State Employees Pay  --  Governor Otter is recommending a $78 million
to increase teacher and state employee pay.   This is a 5% increase.  He is
also recommending cuts in medical insurance for employees because of the
increase state liability.  Many legislators feel that we need to closely
study this aspect of employee benefits.
 
 5. Scholarships  --  The Governor recommended an additional $50 million
for the Idaho Opportunity Scholarship Program.   Last year we approved $10
million to start the program in establishing a trust fund under control of
the Secretary of State.  To date, the U. of Idaho has awarded $585,000 in
scholarships to 196 students from low income families.   Legislators
generally support the program but feel that the Governor will not get all
of the $50 million for the fund.
 
 6. Water Issues  --  The Governor recommended $20 million in one time
monies to help look for long term solutions to Idaho's water problems.   $2
million has been designated for water adjudication in Northern Idaho.
 
 7. Transportation  --  The Governor is looking for creative ways to help
finance Idaho's highway and bridge infrastructure.  He is asking for the
authority to issue $170 million in GARVEE bonds.   He wants to move $17
million from the Idaho State Police Fund to transportation.  The ISP would
make up the difference from the General Fund. The Governor will support a
local option tax proposal to fund local highways and repair government
buildings, but it would still take a 2/3rds majority vote.  We may also see
some other proposals such as increased registration fees.
 
We are just getting use to our "tight" quarters in the Capitol Annex, but
we are all getting adjusted to the limited space.   Please send me your
comments, recommendations, etc. via e mail to ttrail at house.idaho.gov.  My
office # is (208) 332-1184.
 
Representative Tom Trail



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