Idaho's tax cuts proposed by the Legislature are a risk to our children's future

Yahoo

14-03-2025

The rotunda at the Idaho Capitol as seen on Jan. 17, 2022, in Boise. (Otto Kitsinger for Idaho Capital Sun)
The Idaho Legislature is at a crossroads.
With over $450 million in proposed tax cuts on the table — more than four times what Gov. Brad Little set aside in his budget — lawmakers must decide whether these cuts serve the best interests of Idaho's children. At the heart of the debate is whether Idaho can afford these sweeping tax cuts without jeopardizing the programs and services that directly impact kids' education, health care and overall well-being.
Idaho Gov. Brad Little concerned about magnitude of tax cuts that reduce state revenue
Last week, on the 59th legislative day, the Joint Finance-Appropriations Committee (JFAC) finally set a revenue target for fiscal year 2026. The governor recommended a revenue target of $6.407 billion, closely aligned with the Economic Outlook and Revenue Assessment Committee's (EORAC) projection of $6.4 billion. However, when JFAC attempted to vote on the matter in January, it failed to pass the revenue target. The committee ultimately passed a revenue target on March 5, just two and a half weeks before its target adjournment date of March 21.
This uncertainty raises a critical question: How could legislators justify massive tax cuts when they hadn't even established the revenue framework until so late in the legislative session? Is this responsible legislating?
If these tax cuts pass without corresponding budget adjustments, Idaho's children will bear the consequences. Education funding could face significant reductions, forcing larger class sizes, fewer resources and reduced support for teachers. Health care programs for low-income children could see cutbacks, leaving many families struggling to afford essential care. Infrastructure projects, including safe school facilities and community services, could be left underfunded.
Let's break down the proposed tax cuts:
House Bill 40 reduces the income tax rate from 5.8% to 5.3%, exempts certain precious metals from capital gains tax and excludes certain military benefits from income taxation. Cost: $253 million.
House Bill 260 increases the grocery tax credit from $120 to $155 per person (up to $250 if itemizing). Cost: $50 million.
House Bill 304 allocates an additional $50 million to the Homeowner Tax Relief Fund and another $50 million to the School District Facilities Fund. Cost: $100 million.
House Bill 93 introduces a parental choice tax credit for private education expenses. Cost: $50 million.
While tax relief is a popular talking point, responsible governance requires balance. The state must fund critical services that support children and their futures. Slashing taxes without a plan to offset lost revenue puts these essential functions at risk.
Some lawmakers argue that lower taxes will spur economic growth and eventually offset the lost revenue. But that theory is speculative at best. Idaho already enjoys a competitive tax climate, and drastic cuts could deplete reserves needed to weather economic downturns, leaving children's services particularly vulnerable.
Instead of rushing into nearly half a billion dollars in tax cuts, the Legislature should focus on sustainable tax relief that aligns with realistic revenue projections. A more measured approach — one that considers both taxpayer relief and the state's long-term financial stability — would better serve Idaho's children and their future.
The question lawmakers must answer is this: Are they building a better future for Idaho's children, or are they gambling with their well-being?
Editor's note: Fred Wood, Cindy Wilson and Julie Yamamoto are writing on behalf of Idaho Children are Primary. ICAP is a nonprofit 501(c)4 organization led by a group of child care experts with the common goal of advocating for the well-being of children and families in the state of Idaho.
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