Lopsided Income Tax Bill Heads to Governor’s Desk

Senate Republicans forwarded House Bill 436 to the governor’s office in a party-line vote.

All Democrats voted against the legislation, advocating instead for more critical tax solutions, such as reducing property taxes or repealing the sales tax on groceries, and using state funds to plug the holes in school budgets that must be filled by supplemental levies.

Under the bill, someone with $1 million in annual taxable income will receive an ongoing yearly tax cut of over $5,000 on top of a nearly $8,000 one-time rebate. Idahoans with the most modest incomes will receive a rebate of about $75. It also lowers the corporate income tax rate from 6.5% to 6%, matching the sales tax rate people pay for food, diapers, medicines, and other needs. 

Sen. David Nelson, D-Moscow, was one of several Democrats who said they hadn’t been contacted by a single constituent asking for an income tax cut. In his debate against the bill, Nelson said he’d received a number of calls asking for a repeal of the grocery tax, meaningful property tax relief, and well-funded schools. But if signed into law, HB436 will gobble up much of the dollars needed to address any of those critical needs, he added. The bill has a one-time cost of $350 million in addition to an ongoing cost of $250 million, for a total of $600 million.

“Our legislative priorities are completely lopsided when the first bill we pass blatantly ignores the needs of Idaho’s working families,” Nelson said. “Why not help our local schools and provide the necessary funding needed to make essential facility repairs rather than force districts to rely on supplemental levies for general maintenance. Or increase our property tax assistance program to help keep fixed-income seniors in their homes. That’s what we should be doing.”

Senate Democratic Leader Michelle Stennett, D-Ketchum, echoed Nelson, and said Idahoans deserve long-term benefits from their tax investments.

“Right now, there are over 2,000 bridges in need of repair in our state — some of the most dangerous are in my district. This is a major public safety issue. We have to be looking at the real problems, like Idaho’s crumbling infrastructure, before anything else,” Stennett said. “Do people want a one-time $75 check, or to have services that boost the safety, wellbeing and quality of life for themselves and their children?”