- Associated Press - Monday, February 16, 2015

BOISE, Idaho (AP) - Idaho lawmakers are considering bumping the state sales tax to 7 percent with a 1-penny increase and also looking at replacing the state’s graduated income tax rate with a flat rate of about 6.6 percent for individuals and corporations.

The Idaho Statesman reports (https://bit.ly/1Di4vvc ) in a story on Sunday that lawmakers say the plan, which would eliminate sales taxes on groceries, will create economic stimulus while boosting money for roads and bridges.

“Individually you can kick down every piece of it,” said Majority Caucus Leader John Vander Woude, R-Nampa. “But putting it all together, I think it’s a way forward.”

Lawmakers are waiting on final projections from the Tax Commission before moving forward.

The comprehensive plan emerging in the House would meet goals outlined by Gov. C.L. “Butch” Otter in his State of the State address. Legislative leaders say Otter is aware of the plan.

Backers say the plan would raise $150 million for transportation in the coming fiscal year.

Idaho for fiscal year 2016, which starts July 1, has budgeted $514.4 million, with half of that coming from federal money and most of the rest through state fuel taxes. A governor’s task force estimates that Idaho needs to spend $262 million more each year just to maintain its roads and bridges.

“There is a recognition in the Idaho Legislature that we’ve got to set aside those monies that will be sufficient to maintain the billions of dollars of road assets that we already have,” said House Speaker Scott Bedke, R-Oakley. “We understand that if you let it deteriorate to the point where you have to replace rather than repair, that it’s substantially more, and we’re working on ways to address that.”

Lawmakers said that a flat-rate income tax could be the most difficult part of the plan as it raises rates for less-wealthy tax payers. But backers said that will be offset by eliminating the sales tax on groceries. Lawmakers also tell the newspaper that a flat-rate income tax makes Idaho more attractive for investment and more competitive with nearby states when in vying for businesses.

A benefit for the sales tax increase, lawmakers said, is that it will mean more money for roads as economic conditions improve.


Information from: Idaho Statesman, https://www.idahostatesman.com

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