Anti-Taxpayer Proposal of the Week

Like most states, Idaho is facing a budget shortfall for FY 2011. Governor C.L. “Butch” Otter is proposing a balanced budget for the year that does not include a tax increase, but he is proposing to use roughly $175 million from the State’s three reserve funds to close the budget gap.

While Idaho taxpayers may be cheered to learn they are not facing a tax hike, they may not be too pleased to learn that the Governor wants to spend $1.5 million of the State’s “Budget Stabilization Fund” on the Idaho Tax Commission in order to chase down non-payers and close the “tax gap.”

According to the Governor’s Budget Highlights (section A-7) (PDF):

• The Governor recommends a transfer in the amount of $1,500,000 from the Budget Stabilization Fund (BSF) to the Tax Commission. Per S 1227 of the 2009 Legislative Session, the Governor has the authority to transfer funds from the BSF to any Executive Branch agency receiving General Fund for the purpose of Personnel Costs during FY 2010.
• The Governor recommends ongoing General Fund monies totaling $1.5 million to the Tax Commission to support auditors hired to help close the tax gap between what is collected in tax revenue and what could be collected from non-payers.

It’s ironic, to say the least, that Governor Otter would propose spending some of the state’s rainy day fund—which is like a savings account for past surplus tax dollars—to squeeze even more money out of Idaho citizens all in the name of avoiding a tax hike.