[Vision2020] pre-legislative newsletter from Rep. Tom Trail

[Art Deco]

Tom,

Thank you for the outline.

I especially laud your analysis of tax exemptions.  I think we need to impose assessing/reporting requirements on county tax assessors so that we can know exactly how much each exemption is reducing the money otherwise available with respect to property and other taxes assessed by the county.  

I especially endorse the idea that the cost to taxpayers of the exemptions to non-profits, many of which are not charities (and some of the charities are more employment opportunities for fund raisers than charities) be calculated and reported along with a calculation showing each taxpayer how much their tax bills would be reduced if non-profits were taxed.

Wayne A. Fox
1009 Karen Lane
PO Box 9421
Moscow, ID  83843

waf at moscow.com
208 882-7975

  ----- Original Message ----- 
  From: Rep. Tom Trail 
  To: vision2020 at moscow.com 
  Sent: Wednesday, January 06, 2010 11:57 AM
  Subject: [Vision2020] pre-legislative newsletter from Rep. Tom Trail


  PRE-LEGISLATIVE NEWSLETTER--IDAHO LEGISLATURE 2010

  Constituents:

  The Idaho Legislature will open on January 11th.  The Economy will
  dominate what takes place this session.  Idaho faces a $151 million
  deficit as of July 1st.  Agencies cut 4% from their budgets, but still
  have a $50 hole.  The Governor will outline his plans on January 11th.
  Further reductions in state agency spending and consolidating some agency
  programs may be some of the options that he will talk about.

    1.  Budget and Taxes -- There are basically four ways to balance the
  budget or a combination of some of these options.

        a.  Cut agency budgets and programs -- this appears to be the option
  that the Governor will select.  Public education and Higher
  Education will no doubt see further reductions.  This would be one
  of the few times that public education would suffer a cut. Many
  quality programs from our universities and colleges will have to be
  eliminated.  Outstanding faculty have already left the University of
  Idaho seeking more stable conditions.  Further cuts in Medicaid may
  occur.  One has to ask the question at what point do we allow the
  quality of our educational programs not to further go downhill.

        b.  Examine Our Tax Exemption System -- To date we have 75 tax tax
  exemptions which total up to be about $1.8 billion/year. Each
  exemption benefits in general a small group of citizens or an
  organization.  The money from the exemption does not flow into the
  state general fund but, in fact, can be viewed as a cost to those
  taxpayers not benefiting from the exemption.

            A tax exemption is granted by the State on the basis that it
  will be a benefit to the State.  However, to date no system has
  been set up to require the beneficiaries of an exemption to come
  before the Legislature to present in a transparent and accountable way to
  prove the exemption's value to the State.  If an exemption was found not
  to be beneficial to the State then the funds could flow to the State
  general fund and be used for priority programs.  I am working with several
  legislators who will be proposing that we Sunset all 75 exemptions and set
  up a system to evaluate all 75 exemptions on a timely basis.

        c.  Go After Those Who Have Not Paid Their Taxes -- The Office of
  Performance Evaluation estimates that about $300 million in taxes  go
  unpaid each year.  The IRS reports the figure to be about $350 million.
  Governor Phil Batt approved hiring additional auditors back in 1996
  and the returns were about one to ten.  Six years the state spent
  $900,000 on auditors and got back $12 million. The Tax Commission in
  November outlined a strategy--with $10 million to hire 164 auditors
  the return would be about $65 million--more than enough to close
  budget gap.  This is an initiative that I can strongly support.

        d.  Raise Taxes  --  This will not be a popular idea among many
  legislators; however, the evidence appears that the blood-letting
  with a series of budget cuts already experienced by public
  education, higher education, and other programs has caused
  irreversible damage-- then all options should be on the table.

            Tax cuts for corporations are being advocated by some Republican
  legislators.  I'm opposed to this legislative initiative.  Idaho
  has a very poor track record in granting tax breaks to lure big
  corporations into the state or not to move out of the state. The case of
  Micron and Albertson stand out as key examples.   Cash strapped
  communities across the country have a message for corporations that
  promised jobs in return for big tax breaks.  Many corporations and
  businesses that were granted tax abatements and other incentives simply
  did not deliver the promised number of jobs and other economic
  enhancements.  The newfound strength comes as states that have long bent
  over backward to lure companies and jobs to the tune of $60 billion/year. 
  Agreements are now being written that will take
  away the property tax break or a portion of it if the company
  does not keep its promise or commitment.

    2.   Other--There will be many other specific legislative endeavors and
  issues that will emerge during the session, but the economy is the
  dominating theme at this time.   Idaho's unemployment rate is about 10%
  and this doesn't include those whose benefits have already run out.
  Idaho has paid out as much as $16 million/week in terms of unemployment
  benefits.

  Please send me your comments and suggestions to Rep. Tom Trail

  e-mail:      ttrail at house.idaho.gov

  Rep. Tom Trail


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