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Inside Politics: Idaho's gift-giving season

It’s Christmastime again. Dozens of merry elves, decked out in bright red regalia, are preparing to load another sleigh full of brightly wrapped presents. They’re making their lists, checking them twice, confirming who’s been naughty and nice. Soon they’ll sled into Boise’s Capital building to deliver gifts starting Jan. 9.

Oh, sorry. I was talking about the Idaho Legislature, not Santa et al.

The red elves are pretty much in charge of gift giving. There are a few blue-suited elves too, but they don’t get to pick out many gifts.

One of the biggest sacks of presents contains sales tax exemptions. These goodies are especially wonderful; they’re gifts that keep on giving. One only needs to get on the list once to earn an exemption. Then, nobody ever checks again whether you still deserve one.

Sales taxes were designed to collect a tiny portion of the money flow in commerce to fund state government. Together with property and income taxes, Idaho’s revenue base is like a three-legged stool, providing stable support for local and state governments’ essential functions. At the state level the two main revenue sources are individual income taxes (48 percent) and sales taxes (41 percent).

Here’s an overview of Idaho’s financial landscape. Idaho’s annual economic output is over $60 billion. Total state-government tax collections are $3.9 billion. Of these, individual income tax collections are $1.6 billion. Sales tax collections are $1.5 billion. Fuel tax collections are $0.3 billion. Fees, etc,. collect $0.3 billion. And corporate income tax provide a mere $0.2 billion.

Idaho funds public sector activities with a few other revenue sources. At the local level, property tax collections are 1.6 billion. About $2.5 billion federal dollars also come into Idaho, supporting a broad spectrum of public activities. Another sizable but variable sum from various sources flows through the budget as so-called dedicated funds.

In 2015, Derek Santos, Idaho’s chief economist, reported that of Idaho’s 141 tax exemptions, only 46 were income-tax exemptions. The 95 sales-tax exemptions accounted for $2 billion of the $2.3 billion from all 141 exemption sources. Sales tax collections in 2016 were $1.5 billion. However, $2.1 billion (58 percent) of potential collections were exempted.

The red-clad elves running Idaho’s annual gift-giving pageant for decades seems to have a pattern of wrapping bigger and prettier gifts for a select group of recipients. Business enterprises, in particular, are especially favorably treated under all forms of taxation, given numerous deductions and exemptions not comparably available to individuals.

Sales-tax exemptions have been extensively studied. It’s a highly flexible form of revenue that can be adjusted by adding and subtracting exemption categories, or assigning different sales-tax rates for different categories. Lowering sales tax on consumer items could significantly stimulate Idaho’s overall economy. Many legacy sales-tax exemptions benefit economic sectors that would now prosper without the exemption or that are already substantially subsidized by other sources (e.g. agriculture and health care). Note: an exemption for one person is a de facto tax increase for people without the exemption.

In the case of Idaho’s education funding shortfall, Republican legislators have disingenuously understated the magnitude of Idaho’s crisis for nearly a decade. They don’t acknowledge the widespread necessity of school districts for supplemental levies to barely keep the lights on, pretending levies aren’t tax increases. They’ve turned a blind eye to school facilities maintenance delays, textbook and supply shortages, hemorrhaging of qualified teachers to better-paying states, and the need of dozens of districts to adopt four-day instruction weeks.

Idaho ranks 50th of the 50 states and District of Columbia in per capita income. Only Mississippi is poorer. Several societal needs beyond increased wages and education funding have also consistently received rankings at or near the bottom of the performance heap for decades. These include mental health, child and elder care, legal aid, and medical services, infrastructure maintenance and upgrades, to name only a few. Several of those deficiencies are the direct result of consistent inadequate funding while simultaneously gifting well-performing sectors of the economy with a variety of unnecessary tax incentives or other benefits.

Idaho’s dominant conservative priority has always been to keep taxes low while balancing the budget. That rationale is, of course, important. But it is, however, superseded by the need to get the job done. The job, as clearly stated in Idaho’s Constitution, is to educate our citizens and equip our society with the structures and tools that enable citizens to care for themselves and that results in opportunities to raise their own aspirations and those of their children.

It would take a $400 million to $500 million enhancement in Idaho’s annual tax collections to more responsibly fund Idaho’s critical needs. One way of looking at it is about $1 per day per Idahoan. However, a responsible redesign of Idaho’s tax structure could largely prevent the burden of revenue enhancement from falling on the working poor or middle class.

Re-evaluation of sales-tax exemptions is a logical starting point. A professional analysis of how to accomplish this was undertaken by Fair Share Idaho This is not an explicit endorsement of Fair Share Idaho or their specific recommendations. But they have shown one path to a $424 million net revenue enhancement while simultaneously lowering Idaho’ sales tax to 5 percent by eliminating select sales-tax exemptions.

But you’ll need to contact your legislators to demand fair taxation redesign. The blue elves can’t do it all alone.

Reader Comment
Reader Comment: Making an enrollment list and checking it twice

Applications usually require supporting information and documents. Job applications, school applications, car insurance applications, scholarship applications, loan applications, and of course health insurance applications, require you to have certain information available to complete the process. While no one likes completing applications, it tends to go much more smoothly if you’re prepared.

To apply for health insurance through Your Health Idaho, you’ll need the following information. Gathering this information together in a folder prior to applying can save you time, headaches, and multiple visits to your assister.

Information about your household size. Figure out who in your household should apply before you start your application.

Home and/or mailing addresses for everyone applying for coverage.

Information about everyone applying for coverage, like addresses, birth dates, and Social Security numbers.

Information about the professional helping you apply (if you’re getting help completing your application), such as name, job title and contact information.

Document information for legal immigrants.

Information on how you file your taxes. (For example, if you’re self-employed, you may pay estimated taxes each quarter.) You might want to bring your last tax filing.

Employer and income information for every member of your household (for example, from pay stubs or W-2 forms).

Your best estimate of what your household income will be in 2017.

Policy numbers for any current health insurance plans covering members of your household.

A completed Employer Coverage Tool for every job-based plan you or someone in your household is eligible for. (You’ll need to fill out this form even for coverage you’re eligible for but don’t enroll in.)

Notices from your current plan that include your plan ID number, if you have or had health coverage in 2016.

In order to choose a health plan, you’ll probably want to gather additional information, which will help you choose a plan which best fits your needs.

Names of medical facilities anyone in your family uses.

Names of all family physicians or other providers, including specialists.

Names of all medications anyone in your family is currently taking.

Frequency of provider visits for each family member.

Whether or not each family member smokes.

Premium and deductible amounts you are able to pay.

Plan websites allow you to see which doctors, facilities, and prescriptions are covered by each plan.

Here are a few other things to consider.

You can get assistance with your application by calling Your Health Idaho at 1-855-YH-Idaho (1-855-944-3246), or find a Certified Enrollment Counselor or a Certified Agent or Broker to assist you.

You must enroll by Thursday for coverage to be effective Jan. 1, 2017.

The Affordable Care Act is still the law of the land and Open Enrollment only lasts until Jan. 31, 2017.

You must pay your premium monthly in order to maintain coverage — 85 percent of people get help paying their premiums, which can often be less than $75 per month.

Enroll today and enjoy the peace of mind that comes with having health insurance for you and your family.