Ensuring that Idaho has the resources to pay for the building blocks of thriving communities -such as good schools, roads and health care – is a vital part of governing. Responsible investments in public services that undergird our economy have been a key ingredient in Idaho’s prosperity. However, over the last 20 years, the state has steadily cut revenue, culminating in an annual loss of approximately $800 million. These cuts have left us with fewer resources to invest in education, public safety, and the health and well-being of Idahoans than we would otherwise have.
In addition to tax cuts, Idaho lawmakers have created specific tax breaks – also known as “tax expenditures” because they represent money taken out of the state budget – that are supposed to encourage economic development, reward behaviors such as saving or home-buying, or instill fairness in the tax code. But very few of these tax choices, each of which drains revenues that could be used for critical goals, are ever evaluated or ended.
Currently, Idaho has 133 tax expenditures on the books for sales tax and income tax (both individual and corporate). These 133 expenditures represent almost $3.2 billion that is not collected compared with a total General Fund budget of $3.6 billion.1 For example, it is estimated that $69 million is foregone on the Idaho child tax credit while $600,000 is foregone by exempting ski lifts and snowgrooming equipment from the sales tax.
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