That Idaho is sitting on an estimated $130 million surplus tells us that.
On Jan. 5, Gov. Butch Otter said Idaho’s economy wasn’t as “robust” as he’d hoped, because “Less income has been realized in the sales tax area, which is the day-to-day monitor, if you will, of what the economy is doing.”
Then how do you explain Otter’s proposal to cut $45 million in taxes when the economy, in his words, is far from “robust?”
But House Republicans have, in recent years, tipped their hand by proposing cuts to the corporate and individual income tax. And Otter’s allies in the business lobby have long sought a reduction in their personal property tax.
These folks cite the spurious argument that tax cuts spur growth. The truth, as Idaho learned when it unwisely cut income taxes on the eve of a recession 11 years ago, is this money gets removed from the economy and not reinvested.
In a recent interview, Idaho’s former chief economist said his vast experience led him to these conclusions. “... I think it’s really hard to overstate the importance of education in terms of its role in economic development.” As to those tax cuts, Ferguson said: “... it might not necessarily be of value to the state from the standpoint of promoting economic development.”
Otter didn’t listen to Ferguson on revenue projections. That cost the governor $100 in a bet with Cecil Andrus. It cost his constituents much more.
Lawmakers should restore money they unnecessarily cut from the Medicaid and education budgets.
Because with our economy still far from “robust,” a giveaway to businesses and highearners is something none of us can afford.