In her first update from the 2014 half of the legislative session in Boise, NFIB/Idaho State Director Suzanne Budge writes about the big issues facing small business, including another divisive battle brewing over yet another element of the Affordable Care Act.
Lawmakers came back to the Statehouse in Boise with a common view: Wrap up the state’s business quickly and get home to run their re-election campaigns.
Gov. Butch Otter kicked off the session January 6 with his annual State of the State address, which contained a modestly optimistic budget. The speech was met with general approval. Afterwards, activity at the Statehouse picked up earlier than usual as lawmakers got right to work. The hallways were buzzing with lawmakers and lobbyists.
Committees started reviewing administrative rules from state agencies, as legislation trickled in. As we move from start-up mode to fully-engaged at the Statehouse, we can expect longer agendas in committees and on the floor of both houses. The action this month will ramp up as deadlines for bill introductions loom large, and everyone scrambles to get their proposals into the hopper.
Issues for the 2014 session.
The governor proposes spending $54.7 million to implement some of the 20 recommendations from his task force. Superintendent Tom Luna wants $66.9 million, which is more than the 2.9 percent, or the $37 million recommended by the governor. The legislative budget committee, JFAC, will be sorting out the final number as one of the legislature’s biggest priorities for 2014.
Tax Cuts Possible, After Education Reform
Governor Otter has set aside $30 million in his budget proposal for tax relief, but tax relief trails education funding on his priority list. Two possible options include increasing the personal property tax exemption for business equipment from $100,000 to $250,000 and further reducing Idaho’s top individual and corporate tax rates. NFIB has long advocated reducing these taxes. Continuing to chip away at both of these taxes would be welcome relief to Idaho’s small and independent businesses.
Affordable Care Act In Idaho
The Idaho Health Exchange was passed by the 2013 Legislature and a board was appointed by Governor Otter to establish and run “Your Health Idaho,” Idaho’s state-based health insurance exchange. It gave its first annual report to the Legislature in last month. You can find out more here.
Some of the accomplishments from the annual report:
- Established a website to act, for this first year, as a portal to the federal exchange
- Created Idaho-based resources for consumers including tools to estimate tax credits, find consumer assistance and compare plans
- Built a network of more than 500 agents and brokers who have the primary role to help Idahoans shop for and select a plan on the marketplace
- Established more than 300 In-Person Assisters across the state requiring background checks and formal training
- Report that nearly 20,000 Idahoans had secured insurance coverage through the exchange as of December 31, 2013.
Next Step: Medicaid Expansion?
Last year’s Legislature created the state-based health exchange, and caused some serious heartburn within the Republican Party. Republican lawmakers were badly split on whether the state should create their own exchange, or let the feds do it. The next big policy step of the Affordable Care Act for Idaho is whether or not to expand Medicaid to cover with federal dollars low-income Idahoans who meet certain criteria under federal law.
Health-care providers (hospitals, doctors and insurance carriers) are strongly supportive of expanding Medicare and argue that federal dollars will relieve the counties (and their property tax payers) of the burden of indigent care. These costs to counties and the state are growing every year. But many legislators, and many Idahoans, are wary not only that federal dollars might not last, but that expanding government entitlements, yet again, is not good for the state’s bottom line in the long run. NFIB members largely fall into the second camp.
The Affordable Care Act is ever divisive, and like the health exchange debate in 2013, battle lines are already drawn on Medicaid expansion. Governor Otter doesn’t want the program until it can be reformed. In fact, he formally took it off his agenda for this session. But that doesn’t mean proponents won’t push forward. Stand by for another legislative battle over the Affordable Care Act at the Statehouse if that happens.
Minimum Wage Increase
Proponents of increasing the minimum wage are likely to bring legislation. They have already started gathering signatures to put the issue before voters in November. Idaho matches the federal minimum wage, but the push to provide a so-called “living wage” is showing up in a number of states as part of a national campaign. Rumor has it that advocates for increasing the minimum wage to a “living wage” will introduce a bill to do just that. NFIB members strongly oppose government mandates that interfere with fundamental issues of running their business.
Local Option Tax
A bill to allow a “local option” sales tax for cities and counties is likely to be proposed as a way of allowing local government another tool to raise revenue to fund projects. NFIB members have long opposed local-option sales tax, and we await the details of the latest proposal. Cities and counties have long endorsed the concept, but despite several attempts, adding more taxing authority at the local level has not succeeded in the Legislature.
By the Numbers
How much money do we have and where should we spend it?
Gov. Otter’s State of the State address outlined his plans for the 2015 budget year and kicked off discussions for the 2014 legislative session. Here are a few of the governor’s proposals and announcements:
- Proposes a $2.885 billion budget in state general funds, a 3.7 percent increase from the current year’s $2,781. The entire budget in total reflects a 2.5 percent increase when one-time expenditures are counted
- Set aside $71 million in the state’s rainy-day funds
- Spend about $54.7 million to implement some of the 20 recommendations from his Task Force for Education. Public schools would see a 2.9 percent increase in general funds
- Reject Medicaid expansion in the state for at least one year
- Announced that Idaho’s standard unemployement insurance rate for 2014 is down almost 31 percent, saving Idaho employers almost $75 million
- Supports a third consecutive year of tax relief, but only after education reform is funded
- Met Project 60 goal of growing Idaho’s total economic activity to $60 billion a year
- Proposed a one-time $15 million investment in water supply improvement projects statewide
- Proposed one-time spending of $2 million to create a Wolf Control Fund.
NFIB At Work In The Statehouse
We are busy talking to members and our folks in the field, and also members of the media, who love to hear the perspective of small and independent businesses. The hot topics of late have included minimum wage, unemployment insurance and local option taxation. NFIB is cited regularly in the Idaho Business Review as the session gets rolling. We use conference calls and surveys to better understand what our members are thinking. NFIB/Idaho will host members and legislators for our annual Day on the Hill on March 6.
We appreciate our members’ input and encourage anyone interested in becoming more active to get in touch with the State Director Suzanne Budge (Suzanne.Budge@NFIB.org) or our membership services manager, Anthony Smith. (Anthony.Smith@NFIB.org). We welcome NFIB activists to reinforce the voice of small business at the Idaho Statehouse.