Friday, July 28, 2006

Tax plan is financial hari-kari

Think through Idaho Gov. Jim Risch's call for the Legislature to pass his property tax-cut bill, and several things become clearer.

First, by simplistically promoting "tax cut" and thus sparing voters and lawmakers any rigorous thinking beyond that, the governor is appealing to the understandable hunger for relief from soaring assessments and increased taxes.

Second, by confining the session to a single day, Aug. 25, the governor has connived to arrange de facto approval of his bill by lawmakers behind closed doors.

This session is window dressing for backroom wheeling and dealing.

And, denials aside, that panic action will be just in time for grateful corporate and business beneficiaries to support cooperative candidates in the November general election.

Good politics? You bet. Thoughtful and sound fiscal policy? Never.

Risch wants the Legislature to perform the same financial hari-kari of lawmakers a few years ago, when they recklessly ladled out a surplus, putting Idaho in a fix when the economy and state tax revenues went south.

(Need we mention what Idaho's kissin' cousin Republicans in Washington did to the inherited surplus they frittered away, then drove the nation even deeper into debt with tax relief for the wealthy while waging an expensive war?)

The mechanics of Gov. Risch's tax relief are disturbingly similar. It would wipe out $260 million in property taxes that go to public schools. It would raise the sales tax a penny to produce $210 million (assuming the economy remains healthy). It would use $50 million of the $200 million state surplus on top of new tax revenues to replace the lost property taxes and put $100 million into a rainy-day fund. The surplus would then be $100 million.

Democrats have proposed a prudent alternative: Use half the $200 million surplus to cover taxes that residential homeowners pay, not raise the sales tax and not apply tax cuts to commercial, agricultural or investment property owners.

Relief is desperately needed for residential taxpayers, not high-end investment properties and business. Risch's approach continues to punish homeowners who've felt the sting of soaring assessments.

Faced with the reality of a Republican steamroller, Democrats will likely concede defeat during the special session. But to their credit, they will introduce their plan in January at the regular session.

By then, with accelerating national debt and skyrocketing war costs, lawmakers may have second thoughts about Idaho's economic outlook and choose to opt for a sounder tax relief plan.

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