Idaho Education, Taxes, Healthcare Highlight Gov. Otter's Final Address

Jan 8, 2018

In his final State of the State address, Gov. Butch Otter (R) unveiled a significant tax cut and an ambitious healthcare plan to cover high-risk individuals under Medicaid.

Otter’s tax proposal would slash rates across the board for individuals by nearly half a percent, with corporate income tax rates dropping as well.

Those in the top tax bracket making more than about $11,000 would be taxed at 6.95 percent, while corporations would pay 5.45 percent.

The proposal also includes an $85 nonrefundable tax credit for dependents.

“I will gladly join you in reducing individual and corporate income tax rates with an eye toward stimulating more economic growth,” Otter says.

“But that must be accomplished while keeping our fiscal house in order and our investments for the future on track.”

The move would cost nearly $200 million, but it would be partially offset by an expected boost in tax revenue if the state molds its tax system around recent changes made at the federal level.

Otter is also reviving his plan to shift severely ill people to Medicaid – which would pay for 70 percent of their care. Between 3,500 and 4,500 Idahoans would be eligible.

“It will enable those with the most costly, medically-complex conditions to move their coverage to Medicaid during the course of their illness,” he says.

That, he says, would allow insurance companies to cut premium costs for its healthier customers by an estimated 20 percent.

Roughly 35,000 Idahoans at the poverty level who didn’t previously have health insurance could also get covered under the governor’s proposal using federal tax credits through the online exchange, Your Health Idaho.

In total, the plan would cost more than $17 million from the general fund. Another $11.4 million would come from Idaho’s Millennium Fund, which is bankrolled by a settlement from tobacco companies.

Otter also wants to pump more than $120 million into K-12 education, which would include raises for teachers, updating classroom technology and boosting literacy rates.

That’s in addition to requesting a “higher education CEO” to streamline back office work, which he claims will save tens of millions of dollars long-term.

Overall, his final budget proposal for fiscal year 2019 totals nearly $3.7 billion – a 6.6 percent increase over last year.

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