A tax increase for wealthier Idahoans?

Summary

Shirley Ringo, senior Democrat on the house appropriations committee, says beleaguered state agencies already struggling to provide key services need a break and the legislature must look elsewhere to balance the budget.

Story Created: Nov 16, 2009 at 3:32 PM MST

Story Updated: Nov 17, 2009 at 10:42 AM MST

A tax increase for wealthier Idahoans?
BOISE -- Since receiving Gov. Butch Otter's memo last week urging state agencies to look more closely for ways to cut budgets, Tom Shanahan with the Idaho Department of Health and Welfare, says the agency will look again at professional membership dues which have already been cut from last year's $45,000.

"We've reduced it by half to some $24,000," he said. "But we'll look at it again because of governor's letter."

But one state lawmaker from Moscow says beleaguered agencies are already struggling to provide key services as they face shortfalls.

Shirley Ringo, senior Democrat on the House Appropriations Committee, says the legislature must look elsewhere to balance the budget.

She's proposing a temporary 5 percent tax surcharge in the state personal income tax on Idahoans with taxable income of more than $50,000.

"I think we definitely don't want to go to a sales tax increase - that would hit people who are unemployed or low income," Ringo said in a telephone interview.

She says a family of four earning $76,000 taking the standard deduction would pay an annual surcharge of $162.

In a memo obtained by 2 News, Otter Thursday asked agency administrators to help address the estimated $52 million deficit that "must be resolved" by the end of the fiscal year.

"With an eye toward caution, I strongly encourage each of you to take whatever steps are necessary to ensure that your area of responsibility does all it can do to minimize expenses of all types," Otter said in the memo.

In the memo, the governor stopped short of announcing specific additional holdback requirements at this time.

But Gov. Otter did direct each state agency administrator to limit purchasing, travel, conferences, training and other non-essential activities whenever possible.

And he also asked state agencies to look at any membership costs associated with professional, intergovernmental or other organizations to which they belong.

Ringo said she raising the sales tax would only hurt low income and unemployed Idahoans. So she's looking at a temporary surcharge on some residents' personal income tax.

But people we talked to were hesitant of any temporary tax.

"Temporary taxes seem to stay permanent after a while," said Susan Pedde of Boise.

Ringo admits it will be a hard sell to a legislature already facing hard choices.

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