ABC ISSUES

The ABC draft bill 97 dealing with Project Labor Agreements and draft bill 96, dealing with Job Targeting came back from the Legislative Services Office earlier this week after additional suggested changes were incorporated. The Lobby effort has been three-fold with emphasis on gaining Senate and House Leadership Co-Sponsorship, briefing members of both the House Business Committee and the Senate State Affairs Committee and determining whether the bills will be introduced in the House or the Senate.  Both Sponsors, Senator John Goedde and Representative Frank Henderson are on task on the bills and the main work of the week was working both the House Business Committee and the Senate State Affairs Committee members and asking their individual support.  On the issue of where the bills will start, there is a dilemma. Due to Leadership level political concerns, there is a disagreement between House and Senate Leadership as to which body (House or Senate) should start the bills.  House Leadership and Senate Leadership have deemed the 2 bills of high political concern (election year) but both Leaderships believe the bills to be passable in good order with votes being along party lines.  In seeking a resolution, ABC Lobbyist, Jane Wittmeyer, pushed for a decision at the Joint House and Senate Leadership meeting on Thursday night. Unfortunately the meeting agenda was sidetracked by another issue and the ABC bills were not reached.  The Joint group is not expected to meet again until Wednesday. Since Thursday evening, the House position has hardened to, “the bill must start in the Senate.”  In addition,  a House Leadership spokesperson indicated that these two bills are not “going home bills” a term of art in the Idaho Legislature meaning these bills are not critical to reaching sine die adjournment.   Your SBC lobbyist is continuing to work with the Sponsors and Co-Sponsors in an effort to build support for introducing the bills.

The Idaho Association of Counties (IACo) indicated this week that they will be introducing a bill to create a county to allow electrical and plumbing inspections at the county level. At the regular weekly ABC Conference call, after discussion of the issue, the members present voted to oppose the legislation.  ABC lobbyist will develop a letter indicating opposition and will testify against passage when the bill is heard in Committee. No date has yet been set for RS to Print hearing.

Other Items of Interest

THE ECONOMY, STATE REVENUES AND TAX LEGISLATION

There are a variety of legislative tax/fiscal proposals brewing. A few have been introduced. A big concern remains with the weak and uncertain state general fund revenues. The current economy, lack of jobs/unemployment and future economic forecasts offer a challenge. The struggle for stability and some economic reliability continue being on public policy minds. Legislative leaders will be closely watching actual to projected revenues when they are reported for the month ending January 2010. Those collections and comparisons should be known within or near the first week of February. The Legislative Joint Finance and Appropriations Committee (FJAC) will begin setting budgets later in February and the current FY2010 (ending June 30, 2010) and next year’s FY2011 revenue projections will have a significant impact on how the budget process proceeds. Even when the economy does stabilize, most economic reports suggest a slow recovery. Watch for tax legislation intended to stimulate Idaho’s economy and incent private sector job growth.

TAX COMMISSIONER LANGHORST CONFIRMATION HEARING/IDAHO TAX GAP

Tuesday, January 26, former state senator and now Idaho State Tax Commissioner, David Langhorst had his gubernatorial confirmation hearing before the Senate Local Government and Taxation Committee. The committee was very supportive of Commissioner Langhorst’s appointment. During the confirmation the committee inquired of Idaho’s Tax Gap. A November 2009 report prepared by the State Tax Commission (STC) was cited. The report describes the term “tax gap” as the amount of tax liability imposed by existing law that is not paid voluntarily and in a timely manner. The tax gap is important because it imposes an unfair burden on those who pay on time and accurately, it erodes public confidence in the voluntary tax system, and it reduces revenue needed for the state to provide services. The tax gap will especially be subject to increased scrutiny in fiscal times like now when budgets are experiencing declining revenues and when the tax gap represents an opportunity to increase revenues without raising taxes.

The State Tax Commission (STC) estimates Idaho’s tax gap to be the result of (1) Under-reporting of tax liability (49%); (2) Underpayment or not reporting the full amount of tax;(21%); and (3) Non-filing returns or not paying on time (30%). Having used three methods to estimate the tax gap, the report concluded that Idaho’s Net Tax Gap is $255 million. Applying IRS collectability estimates the report further concluded that Idaho’s 2009 collectable tax gap was $76.5 million. A more specific STC business plan reports Idaho’s collectable tax gap at $65.5 million requiring an investment of $9.9 million to fully implement. This information has attracted the attention of some legislators. We anticipate legislation will surface this year to invest in additional STC auditors for collecting more revenue.

THE ECONOMY, STATE REVENUES AND TAX LEGISLATION

There are a variety of legislative tax/fiscal proposals brewing. A few have been introduced. A big concern remains with the weak and uncertain state general fund revenues. The current economy, lack of jobs/unemployment and future economic forecasts offer a challenge. The struggle for stability and some economic reliability continue being on public policy minds. Legislative leaders will be closely