Idaho: Tax increase bills sent to full House - Measures would raise sales tax for year, hike taxes on wine, beer and cigarettes

Betsy Z. Russell
The Spokesman-Review Staff writer


BOISE, IDAHO_ The legislative logjam finally broke Wednesday in the House tax committee, as the panel agreed to send several tax-increase bills to the full House -- but agreed so reluctantly that one member was literally holding her nose.

"I am so opposed to tax increases that I have to explain my vote," said Rep. Shirley McKague, R-Meridian, who pinched her nose shut with her fingers as she voted. "I want to show that I'm not as bull-headed as the gentleman on the second floor (the governor). I am willing to try. This gets us off the dime."

The measures would raise Idaho's 5 percent sales tax by half a cent for one year; hike the cigarette tax by 72 cents to $1 per pack; and move up some income tax payments to a quarterly schedule in a one-time maneuver that would raise $80 million next year.

The bills were sent to the full House without recommendation, which means that members of the House Revenue and Taxation Committee aren't bound to support them in the full House. Several said they wouldn't.

"Every member of the House ought to be accountable for the way they feel on these issues," said Rep. Dell Raybould, R-Rexburg. "I'm not saying I'm going to vote for any of these on the floor."

The committee also approved a bill to increase Idaho's beer and wine taxes for the first time in 30 years. The measure, which will come back to the Revenue and Taxation Committee for a hearing, would bump Idaho's tax rate up to the national average.

House Speaker Bruce Newcomb, R-Burley, told the committee, "The lobbyists for beer and wine have really been effective over the years. ... Beer has not been raised since 1961. Wine has not been raised since 1971."

Newcomb proposed all of the bills Wednesday except for the quarterly-payments bill, which the committee wrote on its own. It took the direct involvement of the House speaker to get the strongly anti-tax committee to act, in a legislative session that has stretched into its 87th day because of the House panel's unwillingness to raise taxes. Gov. Dirk Kempthorne started off the session in January with a call to raise taxes to make up a $200 million budget shortfall next year.

Brian Whitlock, Kempthorne's chief of staff, said after the committee meeting, "I think we made light-years of progress today."

The new bills raise only $137 million, still far short of the mark Kempthorne set, and he has already hinted he'd veto the quarterly-payments plan. Because it shifts money from one year's budget to another, it just pushes the shortfall back a year, he said.

But Whitlock said the committee's action was a start.

"We applaud the recognition by key members of this committee that yes, none of this is easy, none of us wants to be in this position. But in order to maintain the critical services that the state provides, including education, including public safety, some kind of revenue enhancement was necessary," Whitlock said. "It has taken time to come to that realization, as it took time for the governor to come to that realization."

The bills could end up being amended in the House or the Senate, and a conference committee between the two houses is a possibility to work out differences.

Newcomb said the House likely will debate all the tax bills together, either on Friday or Monday.

"I hate 'em all equally," Newcomb said. "These are not easy issues."

Newcomb said the heart of the problem isn't the governor, the Senate, or anyone else -- it's the economy, which took a nosedive and caused the huge shortfall in state tax revenues.

House Assistant Majority Leader Mike Moyle, R-Star, said, "I know we're all holding our noses ... but we've got to get things moving."


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