Next year my son will start kindergarten. If a proposed ballot measure becomes law, his school district will have about $600 more annually to spend on him by the time he enters first grade. In a state that ranks at the bottom nationally in per pupil spending, I’m hopeful that extra money will make a difference in providing him with a quality education.
Reclaim Idaho, the grassroots organization behind the successful Medicaid expansion ballot measure, has proposed the “Invest in Idaho” initiative which could raise up to $200 million for K-12 education in Idaho through a modest tax increase on corporations and high-income earners.
The Idaho Statesman Editorial Board recently expressed concern over the proposal, suggesting that issues of tax policy and education funding are best left to the legislature. While I appreciate the Statesman exhorting our legislature to take action on this issue, its concerns over the specifics of the ballot initiative are unfounded or easily dismissed by simply reading the text of the initiative or with some basic education on how our schools are funded. I address their specific concerns below.
“We are leery of voters dictating the tax code…Getting the general public involved in setting tax policy is troublesome.”
I find this not only misguided, but condescending. If anything, the general public needs more involvement in deciding how much we are taxed and how much we spend on our children. Today, major tax policy rarely originates outside of a select few in the legislature’s Majority leadership. Under no circumstances should we accept the notion that the legislature possesses a monopoly of expertise on the fiscal or economic impact of our tax laws.
“Setting tax code is more involved than simply picking an arbitrary number on a scale and saying, ‘That sounds about right.’ It requires much more analysis on the impacts and consequences, good or bad. We are not seeing that with this initiative.”
Often the legislature’s formal analysis is limited to a budget analyst reviewing legislation for its impact on state revenue. Any consideration of larger economic impact is uncommon, and is only sometimes volunteered by private organizations in the midst of a rushed political process. Having worked at the legislature for two sessions and witnessing it unfold, I came away with the impression that tax rates were set based on how much revenue loss was politically feasible to fund the largest tax cut possible.
The Statesman is wrong to dismiss the considerable effort of Reclaim Idaho has put forth in developing this initiative without so much as contacting them to understand its careful process. Reclaim Idaho has crafted a politically viable proposal that is easy for voters to understand, consistent with historical tax rates, and sufficient to produce revenue to make a meaningful difference. What should reassure voters about “Invest in Idaho” is that it would affect very few taxpayers overall. Joint-filers earning less than $500,000 and individuals earning less than $250,000 would see no tax increase. The proposed 3% tax increase for high incomes would result in an increased tax burden of just $300 for a household earning $510,000. The corporate tax rate would increase by about one percent to its historical level from 1987–2000.
These changes are modest, and the fiscal impact would be comparable to a reversal of the legislature’s 2018 tax cut, which Majority leadership has recently warned may warrant even further budget cuts than they anticipated. As far as any economic impact of this proposal goes, consider that the $170 million it seeks to raise is the equivalent of about 0.29% of Idaho’s GDP. Small potatoes (pun intended).
“We are also concerned about the ambiguity of the budgeting process that would have to be involved.”
Each year the legislature sets a budget. This budget divvies up the state’s general fund for various agencies and programs. Most education spending comes from the general fund and must be appropriated by the legislature. However, not all government spending originates in the general fund or requires annual action from the legislature. For example, a portion of our sales tax revenue is automatically disbursed to cities and counties. This is called a continuous appropriation. Per the initiative’s text, “Invest in Idaho” uses a continuous appropriation that would be dedicated to education, requiring no annual action from the legislature.
How would the state calculate exactly how much is coming in from the initiative and then earmark that money for education?
The same way they calculate how much tax you owe — math. But seriously, per the initiative’s text, the revenue collected from the proposed tax rate increase will accumulate in a “Quality Education Fund.” This is separate and distinct from the state’s general fund. This is the accounting mechanism that “earmarks” the money for education.
“Would it just go into the overall pot?”
Per the initiative’s text, the revenue collected in the “Quality Education Fund” will be dispersed to school districts based on the existing student attendance formula, to be spent locally.
“Once the money is turned over to K-12 education, how would that money be spent?”
Per the initiative’s text, “Invest in Idaho” prohibits money from being spent on administrative salaries and relies on the State Board of Education to set parameters for how school districts may spend the money for “the betterment of public schools in Idaho to achieve the following goals:
- Reducing class sizes and preventing class size increases;
- Attracting and retaining highly qualified teachers and support staff, including but not limited to, providing competitive salaries, offering continuing education opportunities, and providing support for new educators;
- Providing current and adequate classroom materials, such as textbooks and supplies for students;
- Providing career technical education;
- Providing full day kindergarten;
- Providing art, music and drama programs;
- And providing special education services.”
Along with the Statesman, I too would prefer to a legislature that shares the values of its electorate and relies on expert analysis to deliver on its constitutional obligations. But as a parent, that is a fantasy I can’t afford to live in. Instead, I’ll roll up my sleeves and follow the lead of Reclaim Idaho, because it’s clear they’ve done their homework.
Consider making a donation to Reclaim Idaho here.