The governor and House and Senate leaders from both parties agreed on two main legislative priorities for the coming session: education and property tax relief.
At a legislative preview held Jan. 5 by the Idaho Press Club, Republican leaders also said they want to take a hard look at Medicaid expansion, the Judicial Council process for naming judges, and public safety.
Democratic leaders additionally named protecting natural resources, supporting workforce housing and banning discrimination based on sexual orientation or gender identity, the last of which has been an ongoing effort for more than 15 years.
Gov. Brad Little said that literacy continues to be a focus of his. This past session, the Legislature raised the state’s literacy budget by more than $46 million, among other education-related funding boosts.
“We’re making great progress in that area, that doesn’t mean we should take our foot off the gas,” Little said at Thursday’s Press Club event.
He named teacher and other school staff compensation as another priority for education spending, noting that Idaho has “work to do from a competitive standpoint” compared with neighboring states.
A 2021 Idaho Center for Fiscal Policy report called the state’s teacher pay “inadequate” and said that growing demands of the job were driving teachers away, IdahoEdNews reported. According to a 2022 report from the Economic Policy Institute, an independent, nonprofit think tank, Idaho teachers made 25.2% less than other comparable college-educated workers, EdNews reported.
Senate Pro Tem Chuck Winder, R-Boise, said residents can expect to see money “follow their students in different ways.”
“There’s some Supreme Court rulings around the country that allow tax money to be used in private schools, I think you’ll see some pressure to do some of that,” Winder said.
In 2020, the U.S. Supreme Court ruled that states cannot prohibit religious schools from a taxpayer-paid scholarship program. In 2022, the court made a similar ruling regarding a voucher program and religious schools.
Winder said the Legislature’s main obligation continues to be fully funding public education, as it’s constitutionally required to do, but “we have the luxury right now to do a little of both.” The state currently has a budget surplus of approximately $1.4 billion.
Senate Minority Leader Melissa Wintrow, D-Boise, said keeping public funds in public education is among the Democrats’ top priorities.
“We’ve heard about the competition for resources and the tension that creates for education,” Wintrow said, “so let’s not increase that tension anymore and be sure that we’re investing in our public schools and not siphoning public funds off to private (schools).”
Assistant House Minority Leader Lauren Necochea, D-Boise, agreed with the governor that teacher and staff pay must be prioritized; she said special education teachers are in particular demand.
House Speaker Mike Moyle, R-Star, said he wants better education but “more money does not always equate into better results.”
“Some of our better schools are ones that don’t have supplementals or don’t have bonds and are doing a great job,” Moyle said. “Some of our school districts are sitting on cash reserves.”
He said the Legislature will need to look for areas where it can “get a bang for the buck.”
All five leaders at Thursday’s preview named property tax relief as one of the biggest issues to be addressed in 2023. Although local governments collect property taxes, each official said the state needs to look into how it can ease the burden.
Little said work the Legislature does on clean water, sewage maintenance, roads and schools all indirectly help local governments by lessening their share of the bill, which means they don’t have to go out for bonds and levies.
Moyle said while he agreed the issue needs to be addressed, he said the state may need to take a close look at how the local entities collecting those taxes are setting their budgets.
“I caution our friends in local government though, some of the solutions may not be exactly what they want,” Moyle said, “because the only way to lower property taxes is to constrain those budgets.”
In 2021, Moyle sponsored HB 389, which included an 8% cap on city budget growth each year. The law passed despite opposition from local government leaders, many of whom have continued to bemoan the effects of the bill.
Necochea said lawmakers will have “important questions to deal with always about how we collect revenue” and “how we do this fairly and equitably in a way that lifts up working families.”
She highlighted the growing shift of the tax burden from commercial properties to residential, which she said has been happening since 2016 when the Legislature capped the homeowner’s exemption.
She said impact fees should be able to go toward schools, something current state law does not allow. Local school districts and city leaders in the area have supported the idea, especially in districts that struggle to pass bonds.
“We need growth to pay for itself rather than asking every taxpayer in the school district to subsidize that growth,” Necochea said.
Winder and Moyle said increasing the homeowner’s exemption and impact fees may sound appealing but might have unintended consequences. Winder said the homeowner’s exemption could shift the tax burden from single-family to multi-family properties.
He also said impact fees would be paid by the home buyers rather than the developers.
“They all sound great,” he said of impact fees. “Don’t think of them as a panacea that they’re going to solve all our problems.”
Wintrow said she wanted to prioritize keeping aging residents in their homes.
“We have to figure out how to keep people in their homes,” she said. “ … I would pick the lowest-hanging fruit and really try and help our aging residents.”
In 2018, Idaho voters approved expanding Medicaid to cover those who make too much to qualify for traditional Medicaid coverage but not enough to qualify for subsidies on the state’s health care exchange.
This is partially paid for by the federal government, but Moyle and Winder expressed concern that should the federal government reduce the reimbursement rate it covers, it would have a significant impact on the state budget.
“If we do not get this Medicaid animal in control, it’s going to have an impact on education and other places,” Moyle said.
Little said the state is always trying to work with providers to try and keep Medicaid costs down, and also said its budget could impact how much funding can be put toward education.
“For me, my top priority has and always will be education,” he said, “... the biggest threat to education is the increasing in the Medicaid budget and the corrections budget.”
Winder said the Legislature will look at the costs and how to keep them contained, but it won’t be “easily repealed.”
“We also have to realize that a lot of people using it don’t have other options for healthcare,” he said.
Wintrow and Necochea supported protecting the expansion and ensuring those utilizing it can keep their health care.