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Sponsors concede their $35.7 million tax-cut deal is modest, but it fit the moment

Dan Popkey
March 30, 2012
Idaho Statesman

With a little more than six weeks before they face the first-ever closed Republican primary, it was time to call it good and head home Thursday.

The GOP leaders who backed the tax-cut bill acknowledged they couldn't prove that income tax cuts for corporations and about 17 percent of tax filers in the highest bracket would create any jobs.

"I can only give you my opinion on faith that it would be zero if you do nothing," said Senate Assistant Majority Leader Chuck Winder, R-Boise.

Winder said a three-part deal - which included $34.7 million to restore teacher salaries and $33.7 for state savings accounts - was a compromise backed by Gov. Butch Otter, who began the session urging lawmakers to make Idaho one of few states to cut taxes. "This is the final roadblock to adjournment and going home to work and to use the next six weeks to actually campaign," Winder said.

John Watts, the lobbyist for the alliance of chambers of commerce who spent the session pressing the issue, conceded the modest result.

"For those who say this is piddly, this is nothing, we agree," Watts said, noting his clients sought a rate cut to 5.5 percent. Instead, Otter will sign a bill reducing the top personal rate from 7.8 percent to 7.4 percent and the corporate rate from 7.6 percent to 7.4 percent.

Democratic Sen. Elliot Werk said the small change doesn't justify shifting resources from struggling taxpayers in his Boise Bench district. "It's asking me to take their dollars and give them to people of higher income in the forlorn and certainly unsubstantiated hope that perhaps they'll spend a little more and it will trickle down to them."

But Winder said more money in corporate and individual pockets would help those at the bottom. "That will have a significant impact on the kid working at McDonald's or your neighbor down the street that works for Walmart."

Senate President Pro Tem Brent Hill, R-Rexburg, a retired CPA, acknowledged $36 million in a state economy approaching $55 billion may not be much. But he said Idaho is fortunate to have a chance to do something, anything.

"You may not notice it in your paycheck, but if it creates a job and you have a paycheck, those people are going to notice," Hill said. "This is a package deal. It's not perfect. But you know great opportunities will pass us by if we sit around and wait for perfection."

Pressure to pass the tax cut became intense by Thursday. Sen. Jim Hammond, R-Coeur d'Alene, noted the front row of the tax committee hearing room included Watts from the Idaho Chamber Alliance, GOP leaders from both House and Senate, and Otter Chief of Staff David Hensley.

He tabbed the lineup "Intimidation Row."

New GOP Sen. Dan Johnson cast the key vote in committee. Johnson spoke with a remarkable frankness about his place in the "shrinking and struggling middle class" and made an admission one rarely hears from politicians: "I've been without a home. I have accepted public assistance."

The Lewiston senator said lowering rates is good policy and ought to be followed by reforms, including review of exemptions and tax credits. Otter agrees, said Hensley, who daily hammered home the message that Otter wouldn't let lawmakers go home until they agreed to cut taxes. Hensley said the rate cuts are "an important first step."

Exhausted by the fight over pre-abortion ultrasounds and worried about running in redrawn districts, few had the energy for a drawn-out dance with Otter. Even Sen. Tim Corder, R-Mountain Home, who chairs the tax committee and opposed the tax cut there, voted for the bill on the Senate floor.

The final day of an emotionally wrenching session included an aptly absurd footnote when a protester from Occupy Boise was dragged from the Senate by state troopers for violating a rule that bans hats. Many GOP lawmakers never seemed to understand what Occupy was about, treating the group like aliens. Redistributing wealth in the manner advocated by Democrat Werk is a foreign concept.

"Individuals know how to best spend their money," said Sen. Melinda Smyser, R-Parma. "They know better than the government."

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