Idaho Pundits: Budget and Elections Will Dominate Legislature

By Sharon Fisher, 1-13-10

It says something about the state of Idaho’s economy that Steve Ahrens, former director of the Idaho Association for Commerce and Industry business lobbying group, is advocating for new taxes.

Legislators and Governor C.L. “Butch” Otter should look into imposing an Internet sales tax—not surprising, as the lack of such sales taxes hurts local businesses as well as depriving the state of tax revenue—as well as removing exemptions to the sales tax, including taxing services, said Ahrens. He was appearing for the first time as a member of the annual City Club Legislative Pundits forum (which, again, inexplicably excluded New West) by virtue of his column in the Idaho Business Review. “We need a tax that fairly applies to the service sector that will take such a prominent place in the new economy,” he said.

There are currently more than 120 tax exemptions, which, according to the 2009 Fiscal Facts book, could raise more than $250 million. An interim committee in 2007 made a number of recommendations to the Legislature about which ones could be dropped—which have largely been ignored. Similarly, by applying sales taxes to selected services, Idaho could raise up to more than $1 billion. However, several members of Republican legislative leadership, as well as the Governor, have declared that no new taxes will be imposed during this legislative session.

“Any Republican who votes for a tax increase runs the risk of not being back here next year,” said panelist Dan Popkey, of the Idaho Statesman.

The fact that this is an election year will be the backdrop for much of the legislative session, noted the panelists. For example, there is a proposal to cut taxes by one-third over the next several years, said panelist Betsy Russell, a reporter for the Spokesman-Review—which, though proponent Representative Mike Moyle (R-Star) has said is perhaps not doable this year, Speaker of the House Lawerence Denney (R-Midvale) has said is likely to generate a “lively discussion,” she said. “Why would we have a ‘lively discussion’ about something that’s ‘not doable?’” she asked.

The upcoming election is also a factor for Otter, who will be facing Independent Jana Kemp and the winner of the Democratic primary—currently expected to be the Common Interest’s Keith Allred—in the fall, as well as his own Republican primary challengers such as Rex Rammell and Ada County Commissioner Sharon Ullman. “Otter is moving to the middle because of this election,” Popkey said, who recently wrote a controversial column saying Otter-the-Libertarian had mellowed since taking the job.

However, Russell thought Otter, as an incumbent, would have a big advantage “even if everything is going to hell in a handbasket,” she said. “He’s an appealing politician, and voters have shown they will forgive him for just about anything,” a line that garnered a big laugh from the standing-room only crowd.

Ahrens, for his part, noted that there seemed to be little interest thus far in other statewide races.

As part of “political litmus tests” that can be used to differentiate candidates in the primary and in the fall, Idaho may see social issues such as immigration reform and abortion during the legislative session, the panelists noted, as well as a proposal to close the Republican primary, Ahrens said. However, such issues, which can help galvanize the voting base, run the risk of lengthening the legislative session, which the Governor and legislative leadership have declared they don’t want to do, Popkey said. “The question is whether [leadership] can deliver the votes to make a short session, and have the discipline to avoid ‘dog-whistle’ issues,” he said.

Panelists also admired the renovation of the Statehouse, a big change from the cramped quarters that once allowed Popkey to write an article based on a note he could read passed between two legislators. However, they expressed concern that legislators could use the new halls, doors, offices, and stairways to escape from constituents. Even if that’s the case, reporters will typically find a way to get what they need, while lobbyists may do their job through email and phone calls and less personal contact, but the public is another issue, Ahrens said—though he noted that meeting rooms are now larger, allowing for more of a public audience, and more of the session will be broadcast.

But while the design of the building does give legislators the opportunity to hide from the public, Russell said, “they’d be doing a real disservice to the citizens and the state.”