Move forward on the plan

A few weeks ago, I provided an overview of Governor Brad Little’s budget and policy proposals for the 2022 legislative session.

We are now in a month session and making great progress. Over the past two weeks, significant tax relief and a major investment in our public school system have been passed by both bodies of the Idaho Legislative Assembly.

Over the next few weeks, we will focus on improving infrastructure. The transportation proposal includes $200 million in new road maintenance funding split 60/40 between the Idaho Department of Transportation and local government entities. Additionally, we plan to fund an additional $200 million for local bridges across the state. Rural water and sewer districts will have a great opportunity to undertake otherwise unaffordable capital projects with $450 million in grants being authorized this year for use through 2026. These are just a few examples of the long-term investments we are making in Idaho. , all of which will have an effect in our rural communities.

The tax relief program now enacted has two components. First, a portion of the $1.9 billion in tax revenue that was above last year’s budget forecast is being returned to Idaho taxpayers as a one-time refund. Last year, people received checks for 9% of their 2019 tax payment.

This year, Idaho taxpayers will receive a 12% refund of their 2020 tax payment. If an Idahoan paid $1,000 in taxes in 2020, they will receive a refund check for $120. To determine your refund amount, see line 20 of your 2020 Idaho 40 form. You will receive 12% of this amount or a minimum of $75.

The eternal challenge in taxation is fairness. The program returns the money to those who provided it. The refund is less than a fifth of the $1.9 billion. The Idaho approach says we invest in our future, as described above, except for a rainy day, and in that case return some of the money to its source.

The second part of the tax relief is a continued reduction in the income tax rate. Idaho income tax is currently 6.5% for income over $5,000. For the 2022 tax year and subsequent years, the tax rate will be 6% for income over $5,000. Rates are lower for incomes under $5,000.

We all want to lower our taxes, but I am wary of any further reduction in the income tax rate. We went, in three stages, from a rate of 7.4% to 6% over the last five years. Strong population growth and prosperous economic times generate strong tax revenues, but we should not fall behind in adequately funding state government functions. No one likes to sit in traffic wasting their time, and no one wants to hear that their child is in an overcrowded classroom and not getting the education they need.

This week, we passed a public school employee health law. The legislation is the first step in adding $105 million a year to the school budget to bring health care funding for teachers on par with state employees. One of the benefits of fully funding teacher health care with public funds is the potential to reduce the use of additional property tax levies. I was proud to sponsor the bill in the Senate and look forward to finishing the job in a few weeks with the funding bills.

I normally stick to political discussions in these updates. If you’re a political observer, you may have noticed that I’ve been in the news a few times recently. I attribute this coverage to the positions I have taken to preserve the Idaho we all know and love. I’m not trying to change Idaho. I work daily to maintain the Idaho I grew up in and the Idaho I intend to stay in.

Senator Jim Woodward represents District 1, Bonner and Boundary Counties, in the Idaho Senate. He can be reached at [email protected]

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