Idaho lawmakers reject proposed tax break for military retirees

By WILLIAM L. SPENCE | The Lewiston (Idaho) Tribune | Published: February 25, 2014

BOISE, Idaho — The first major tax relief measure of the 2014 session went down to defeat on a 35-31 vote Monday.

The proposal, sponsored by Rep. Kathleen Sims, R-Coeur d'Alene, would have created a new income tax deduction for military retirees, allowing them to deduct 100 percent of their military retirement income, regardless of their age.

Of nearly a dozen tax relief bills introduced so far this year, this was the first to make it to the House floor for a vote.

Several speakers said they supported the concept, but couldn't accept the potential $7.8 million cost of the legislation in light of future spending commitments.

"I feel like I'm throwing cold water, but I want to remind you about the Task Force for Education Reform," said joint budget committee Co-Chairwoman Rep. Maxine Bell, R-Jerome.

The task force recommended a number of education reforms, including substantially improving teacher pay. Bell said those recommendations have a $300 million to $400 million price tag. A proposed redesign of the public defender system is also in the works, together with efforts to reduce recidivism in the criminal justice system.

"Maybe there will come a time when we can give all citizens a tax break, but at this point we've come to the end of the (revenue) stream," Bell said. "Given the things we've already committed, possibly we should take care of them first."

Sims presented her bill as an economic development effort, saying this tax break would encourage more military retirees to move here and take part in Idaho's economy.

"We have to have a reason to bring them to Idaho," she said. "It's a workforce development issue."

The failure of this bill may indicate a tough road for the session's other tax relief proposals, most of which have yet to go through their initial public hearing.

During a lunch meeting with reporters, House Speaker Scott Bedke, R-Oakley, said he'd heard some of these measures may not get a hearing in the Senate, even if they make it through the House.


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