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BOISE, Idaho (AP) — A sweeping three-part plan that would eliminate sales tax on groceries and lower income taxes on top earners has passed an Idaho House panel.
The bill by House Republican leadership would also include a seven-cent fuel tax increase, which would raise $65 million per year to address Idaho's transportation funding shortfall.
Under the tax plan, Idahoans in the top income tax bracket would see their rate drop from 7.4 percent to 6.7 percent. The plan would also remove the grocery sales tax credit.
The House Revenue and Taxation Committee endorsed the broad bill on a party-line vote Friday — the same day the legislature was originally expected to end its session.
House Speaker Scott Bedke tells the Associated Press that he wants both this tax bill as well as two roads-funding bills backed by a House panel to pass before the session ends.
"We're going to leave when we're finished, and we have some unfinished business," Bedke said, declining to give a new target end date. "All the cards had to fall exactly right, and they didn't do that."
The plan emerges as GOP lawmakers are split on whether to address the state's $262 million annual transportation-funding shortfall with tax hikes or existing general fund dollars, preventing any major proposals to reach the Senate side at all.
"The gas-tax increase does help fund roads, but we are also able to give tax relief to those who are paying the gasoline tax," said Republican Rep. Ronald Nate from Rexburg, who voted yes despite the fuel tax hike. "That's what made it palatable for me."
But the committee's Democrats opposed the plan, saying the proposal doesn't go far enough to fund the state's crumbling roads and bridges and will actually hurt people with lower incomes.
The entire bill is projected to raise $15 million in the general-fund dollars next year. But the nonprofit Idaho Center for Fiscal Policy says the plan would cost roughly $50 million in general fund money in subsequent years.
Bedke told lawmakers that he expects the Senate to make tweaks to the bill. "We will want these germane committees to sit down and want them to take time and make sure we understand what comes back," he said.
The full House will consider the plan early next week, Bedke said.
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