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House clears delay of expansion in grocery tax credit

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The Idaho House passed a measure Friday that would delay the expansion of a grocery tax rebate program.  The legislation is designed to help lawmakers balance the state budget and the move is expected to save $15 million in fiscal year 2012.

When Idahoans file their yearly taxes, they typically receive $50 per filer, though low-income folks receive $70 and those over 65 receive an extra $20 on top of those numbers.  The expansion would have increased each amount by $10. All amounts will stay flat when Idahoans file their 2011 income taxes next year.

The bill’s sponsor, Rep. Cliff Bayer, R-Boise, said he is not necessarily excited about the plan, but that he sees the necessity of it.  But, he cautioned, the state is not going to make further cuts to the rebate program.  “The grocery tax credit will not go backwards,” said Bayer.  “It is a delay of the increase.”

Rep. Grant Burgoyne, D-Boise, slammed the bill with a blunt address to colleagues.  “It’s a tax increase,” said Burgoyne. “We’re asking them to pay more tax than they otherwise would for groceries.”

Burgyone further argued that the bill would balance the state budget on the backs of the poor and most vulnerable citizens.  “This a particularly cruel tax,” said Burgoyne.  “This is the wrong thing to do.”

Pocatello Democrat Roy Lacey said that he planned to support the measure, but that legislators should examine options to generate more money for the state budget.  “We are not willing to look at tax exemptions,” Lacey pointed out.

House Minority Leader John Rusche, D-Lewiston, told representatives that he supports the measure only because it aids in funding the proper role of government in Idaho.

In closing remarks, Bayer explained that the bill is one example of a tough decision that must be made during hard budget times.  “As difficult as this is, it’s the prudent thing to do,” said Bayer.

The measure passed on a 55-10 count and now heads to the Idaho Senate, where it will likely face additional opposition.  One senator, Nicole LeFavour, D-Boise, wants the Legislature to make further cuts to the rebate program to stabilize funding for public schools. LeFavour authored a blog post last week in which she called on members of the House Revenue and Taxation Committee to cut the rebate program to 2007 levels, which would free up $27 million in tax revenue for the state.

LeFavour said that money could be used to stave off looming cuts to public schools and that the move would be temporary.  ”We would encourage a return to full funding and full structure of the credit following this fiscal year,” wrote LeFavour.



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The measure is expected to cost taxpayers $15 million in lost rebate money, The measure is expected to cost taxpayers $15 million in lost rebate money
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