Turning a bad situation around
Corey Taule
October 22, 2009
Idaho Falls Post Register
The tax shift of 2006 was a bad deal for Idaho's poorest citizens. Legislators, at the behest of then-Gov. James Risch, cut property taxes $260 million and raised $200 million by increasing the sales tax a penny.
Who benefited? Businesses and folks with large and expensive homes.
Who suffered? Public schools, which lost their maintenance and operation levy and now must depend on the fluctuating sales tax. And renters, who received none of the benefit but ended up paying 20 percent more for necessities such as food, diapers and school supplies for their children.
Some Republican leaders acknowledged, without ever saying so, that Idaho's working poor got the worst end of the shift. Risch and Idaho Falls Republican Bart Davis talked about - and advocated for - removal of the sales tax on food.
Getting this regressive tax off the books would have made up for the Risch shift.
But as the 2007 legislative session arrived, the economy began to gurgle and the GOP lost its nerve. The sales tax on food is a $190 million item. A less expensive proposition, Republican leaders determined, was to increase Idaho's grocery tax credit.
Lawmakers passed a plan that would immediately boost the state's $20-per-person credit on state income tax returns and keep raising everyone's credit by $10 per year until it hits $100.
The law allows the hikes to be delayed if the economy slides. And obviously, Idaho's economy is long past sliding. It's in freefall.
Delaying the hike would save the state about $15 million. And as we've said repeatedly, in a year when public schools and colleges are facing budget cuts, everything has to be on the table.
That includes the grocery tax credit.
Legislators introduced the credit along with the sales tax in 1965. Had it been adjusted for inflation and a doubling of the sales tax, the credit would be worth nearly $150 today.
It hasn't kept up and it never will. It would be better to address the real problem, the fact that Idaho is one of seven states that still taxes sustenance.
Conservatives like use taxes because people can choose whether or not to buy something. And yet Idaho exempts the sales tax on items such as haircuts and massages. You can endure a bad back. Grandma can cut your hair. Most, however, can't butcher their own cow or grow and process their own wheat. Lawmakers have this backward.
So delay the grocery tax credit increase, and earmark that money for schools.
When our economy recovers -- and it will -- get the sales tax off food.
Finish what you started in 2006. Take a bad idea and see if you can't squeeze something positive out of it.
Originally posted at http://www.postregister.com/story.php?accnum=1025-10222009&today=2009-10-22
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