A cheaper trip to the supermarket?

COEUR d'ALENE - A complex tax bill that would raise gas taxes, lower income taxes for some and eliminate the grocery tax was sent Friday to the Idaho House floor.

The bill, HB 311, is co-sponsored by five Kootenai County legislators - Sens. Bob Nonini, Steve Vick and Mary Souza, and Reps. Luke Malek and Eric Redman.

House leadership introduced the bill this week and plans to fast-track the legislation so it can adjourn this legislative session by the end of next week.

The proposal would permanently raise Idaho's 25-cent fuel tax on gasoline and diesel by 7 cents per gallon, eliminate the sales tax on groceries and repeal the grocery tax credit on tax returns. It would also lower the personal income tax for the state's top taxpayers from 7.4 percent to the 6.7 percent level that all Idahoans pay on taxable incomes greater than $5,861.

"I feel like it meets a number of our goals and puts Idaho in a competitive place for attracting and retaining business in Idaho," Malek said.

Since the proposal was released, there have been fiscal analyses done by the state Tax Commission and the Idaho Center for Fiscal Policy.

The proposal states it will result in a positive impact to the state's general fund of $14 million in fiscal year 2016, which starts July 1.

The Idaho Center for Fiscal Policy says while that may be true, its analysis shows the proposal will raise $65 million a year for transportation infrastructure projects, but it will also result in a $50 million annual loss to the general fund.

"I have heard there are some misconceptions out there," Malek said. "But that being said, every conversation has to begin somewhere."

He hopes the House moves the bill quickly to the Senate next week, so legislators can wrap things up and come home for the year.

Souza said she put her name on the bill because she likes the way it balances the impacts on a necessary tax increase for transportation.

"I am not a big fan of tax increases, but this bill seems to balance things out," she said.

The combination of tax increases for the roads, tax relief on personal income tax and the elimination of sales taxes on food should make Idaho a more competitive state for economic development, she said.

"There will be a rise in income tax for some people in the first year, but then it will level off and start to taper off over time," she said.

Souza said she is not concerned about the early analyses of the bill's fiscal impact, because at this time they are largely based on projections and assumptions.

"The bill's sponsor worked very closely with the State Tax Commission on the fiscal impacts," Souza said. "The Tax Commission verified these numbers, so I am comfortable with those projections."

Part of the reason for differing analyses, Souza said, is that the Tax Commission does not know how much sales tax is generated by grocery sales alone. It estimates that it is somewhere between 12 and 15 percent of total sales tax revenue, but it cannot be sure.

Also, she said, it doesn't take projected business growth into account, which is expected as a result of the tax restructuring.

"There are a lot of differing opinions on this and these are people who know what they are talking about," she said, adding however, that she tends to put more weight on the Tax Commission analysis.

Souza is also eager to get home next week.

"The majority leader gave us instructions for the day after Easter, but we said no, no, no, we aren't going to be here," Souza said, adding leadership was doing that just in case, but she thinks adjournment will be toward the end of next week.

Vick said he signed on because he thinks it is a good tax policy.

"I worked quite a bit last year to repeal the sales tax on food," he said, adding he doesn't believe basic necessities should be taxed. "We don't tax medicines in Idaho, and I don't think we should be taxing food either."

Vick, who sits on the Senate Transportation Committee, said HB 311 will work well with HB 310 and HB 312, which would increase certain vehicle registration fees, and shift the Idaho State Police budget from the gas tax fund and into the state's general fund.

"We see the three of those bills as companion bills," he said, adding all the other transportation funding proposals have been pulled off the table.

"We are just about done with everything else down here," he said. "And these are the only three transportation bills left."