LEGISLATIVE UPDATE | WEEK THREE
January 20 - 24, 2025
The Legislature is beginning to hit its serious stride. A week three ramp-up of intensity is not unusual, so it is no surprise that some of the big-ticket agenda items have emerged – at least in early form. After the Revenue and Taxation Committee introduced it along party lines, the House is poised to begin debating a $50 million bill creating a tax credit for private school and home-school expenses. Currently, the bill would provide a $5,000 tax credit for students not enrolled in public schools to pay for tuition, tutors, or other education costs. This is one of the marquee proposals we expected to see this session, with more on the way.
The House Revenue and Taxation Committee has also teed up a new income tax cut bill for debate. Led by Speaker Mike Moyle and introduced Thursday, HB 40 reduces the flat income tax rate on individuals and corporations from 5.69 percent to 5.3 percent, setting up $240 million in estimated savings to taxpayers. Yet to be seen but also promised by the Speaker are additional tax bills for property tax and sales tax relief. The total tax relief package will grow as the Legislature grapples with costs, budgets and policies. This first tax relief bill is separate and aside from the Governor’s recommendation. If you recall, Gov. Little, in his State of the State address, urged lawmakers to find $100 million in tax relief.
There is an interesting dynamic playing out in the Joint Finances Appropriations Committee. So far, the budget-writing committee has funded the “maintenance budgets” but is stymied by differences with critical budget forecasts and spending targets. This week's talks have not yet produced consensus on projections from the executive and legislative budget analysts for final, total budget numbers. At the same time, the committee has failed to strike a deal on salary increases for state employees (CEC), though that didn’t stop them from passing a range of agency maintenance budgets and proceeding with agency reviews for “enhanced budgets” throughout this week. The inability at this point to set revenue targets is a curious step, and barring some kind of quick resolution, can be seen as an early indicator the session may last longer than expected.
Meanwhile, factions within the majority party continue to quarrel over legislative pay raises. In Idaho, a citizens committee on legislative compensation sets the pay scale, which lawmakers can reject or accept. Early in the session, Senators drafted and approved SCR 1, which flat-out rejected the pay raise. The Senate version was put through some procedurally curious – though not improper - processes in the House, specifically a move by the Ways and Means Committee to pen HCR4 approving the pay raise but giving lawmakers the option to donate all or part of their salaries to the tax relief fund. What’s interesting is that Ways and Means typically doesn’t meet until the waning days of the session. It’s also worth noting that this may have been the first time in decades Ways and Means hosted a public hearing on the policy after it was introduced, with no public testimony taken. Ah, political intrigue at its best – and another sign this session could have a long shelf life.
House and Senate committees continue to make headway on approving rules. We also see early signals that a barrage of bills is coming. This week, nearly 40 bills were introduced on the House side and another 17 in the Senate. Over the next two weeks, the Statehouse will be chockablock with bills, budgets, and resolutions to sort through – at least until the deadline arrives for introducing new legislation. As always, we are available to answer any questions you may have, and you can keep track of the legislation we are monitoring through our advocacy page.
