BOISE — A sweeping $200 million tax cut plan faces just one more hurdle before it can land on Gov. C.L. "Butch" Otter's desk after key Idaho Republican lawmakers narrowly decided to advance the proposal Wednesday rather than risk going another session without providing Idahoans tax relief.
The Senate Local Government and Taxation Committee voted 5-4 on Wednesday to send the tax relief package to the Idaho Senate for debate.
"I believe this is good for families, otherwise I would have a hard time going back to my own family and justifying it to them," said Senate President Pro Tem Brent Hill, a Republican from Rexburg. "I know it's not a perfect bill. This is not how I would do it myself. But this is a sure thing."
The plan would align Idaho's income tax code to recent federal changes in the tax overhaul signed by President Donald Trump, which means taxpayers would pay roughly $100 million more next year.
Idaho lawmakers typically conform to the federal tax code to prevent citizens from extra bookkeeping, but this year, doing so means increasing the tax burden for many Idaho taxpayers.
In order to offset that increase, the measure also seeks to reduce all seven of Idaho's brackets for personal income tax rates and corporate tax rates by 0.475 percent.
Critics of the proposal counter the bill fails to provide enough relief to families, who are expected to be hit with a higher tax bill because of the federal tax overhaul. The federal government removed the personal exemption for dependents by doubling the federal child tax credit from $1,000 to $2,000. However, Idaho's code doesn't have an Idaho child tax credit.
The measure passed Wednesday adds a $130 child tax credit, but some lawmakers say it's not enough.
"What is HB 463? It raises taxes on families with three or more children in a state known for its large families," said Sen. Grant Burgoyne, a Democrat from Boise. "Why in the world would we do that? I have no idea."
Sen. Jeff Siddoway, a Republican from Terreton, also voted against the bill.
After the vote, he told The Associated Press that he could not support legislation that hurt Idaho's large families and was unhappy that the governor's office pushed the legislation without getting input from more stakeholders.
Siddoway added that he expected the bill to pass if it got to the Senate floor and would vote in favor of it if it did.
The Republican-controlled Legislature is facing increased pressure to pass tax relief this year after the federal tax overhaul and before a May election.
A substantive tax cut plan hasn't been enacted in Idaho since 2013.
Changing the state's tax brackets would lower Idaho's $3.5 billion general fund by $159.6 million. Implementing the child tax credit would slash the fund by an additional $42.3 million.
Despite passing the governor's bill, many Republican lawmakers have expressed disappointment in the bill.
Last year, the Idaho Legislature spent the final days of the 2017 session fighting to repeal the sales tax on groceries. A bill was finally sent to the governor, but it was vetoed because Otter said the move would cause more harm and instability to the state's general fund rather than benefit families.
This year, Otter has maintained that his position has not changed if they send him another grocery tax repeal proposal.
Legislative leaders, including Hill, have also warned lawmakers that if the Otter-backed bill fails to garner enough support then the chances of passing any other alternative is highly unlikely. The state's top business leaders have also signed off on the proposal.