Understanding school district budgets could become easier thanks to a bill introduced in the Idaho House Education Committee. H 718 - brought forward by Representative Wendy Horman and Senator Lori Den Hartog - moves Idaho to a education funding model that distributes funds on a per-student basis that is calculated based on the number of students attending the school. The legislation also introduces new transparency requirements for public school districts. The transparency language, based on MSPC's recommendation of a Public School Transparency Act, requires districts on the first page of their budgets as well as on their website, clearly report the following items: The total dollar amount expended in the previous fiscal year; The average dollar amount expended per student in the previous fiscal year; The average yearly expenditures for the salary and benefits of administrative staff; The average yearly expenditures for the salary and benefits of full-time teachers; The ratio of administrative staff to teachers to students; The percentage of the previous fiscal year's budget that was deposited into any reserve or savings account of such education provider Idaho’s largest school district, the West Ada School District, has a budget that is 336 pages long and includes six different funds and 36 different programs. The budget is readily available for citizen review, but transparency doesn't mean much if it is not understandable. This new legislation will make it easier for parents and the community to understand the budget, and compare and contrast districts across the state. Our recent Idaho Poll showed more than 80% of citizens support the concept. In the Twin Falls area, support reaches nearly 90%. A public hearing for H 718 is scheduled for Monday morning.

Moody’s Investor Service issued an updated credit report for Idaho on March 4 and the news is good. Based on the latest credit check, Idaho is leading the way in economic growth, maintaining strong reserves, while also having low long-term liabilities. According to Moody’s: “The State of Idaho (Aaa stable) maintains a very strong credit position supported by a growing economy, healthy and stable finances, and low leverage and fixed costs. Idaho continues to be one of the strongest economic performers in the US. It ranks at or near the top of all states in terms of growth in population (including of prime working age residents), employment, GDP and income. The state's economic expansion has driven significant growth in revenue over the past few years, which has supported growth in reserves and fund balance. Strong reserves, which the state is on pace to further increase in the current fiscal 2024, will help the state weather a slowdown in economic momentum or revenue growth, should they occur.” The one warning sign for the state according to Moody’s is related to the controversial plan by the University of Idaho to purchase the University of Phoenix: “The potential acquisition of the University of Phoenix, the for-profit university, by an entity related to the University of Idaho (A1 rating under review for possible downgrade) presents some operating risk to the state. The university is in the process of establishing a nonprofit organization that could issue close to $700 million in new bonds to finance the acquisition and then take on the task of managing the online university. The University of Idaho may guaranty a narrow portion of the annual debt service on the bonds. At the same time, as the sole member of the nonprofit organization, the University of Idaho could be exposed to significant operating risk even if its responsibility for debt service is strictly limited to the narrow guaranty. Because the university is a wholly-owned business-type enterprise of the State of Idaho, the risks it assumes could become operating risks of the state.” Idaho Treasurer Julie Ellsworth said this about that concern in a March 7 press release: “Idaho taxpayers will pay increased costs if there is a downgrade to Idaho’s credit rating.” There are several different options under consideration in the legislature right now concerning the University of Idaho controversy. As reported by Idaho Education News: “Legislative leaders received two opinions Monday. One came from Givens Pursley, a prominent Boise law firm hired to provide outside review of the Phoenix purchase. The second came from Attorney General Raúl Labrador, who already has a Phoenix-related appeal pending before the Idaho Supreme Court. At their heart, the two opinions reach the same conclusion: The State Board of Education had no authority to approve the U of I’s plan to acquire Phoenix, and operate a private university under the mantle of a U of I-aligned nonprofit, Four Three Education . . . In a statement provided Wednesday morning, the U of I indicated it might be open to a new approach. ‘We understand that there are conflicting legal opinions, all from respected law firms and we believe there is a legal path forward and are working toward a solution.’” Strong fiscal discipline and good governance will help provide ongoing dividends for taxpayers. State policymakers are acting wisely to ensure Idaho’s credit rating remains strong.

Farm numbers across the United States are dwindling and the mountain states are no exception. Our country lost 7% of farms from 2017 to 2022, and all of the mountain states were above the national average. As a farmer in the region, I understand the stress of this profession, and if our country continues on its current trajectory our region’s agricultural future looks bleak – more consolidation and less food security. From 2017 to 2022, Idaho, Montana, Washington, and Wyoming all experienced a decrease in the total number of farms. Wyoming saw the largest decrease at 12% of farms, totaling 1,394 farms in the state that chose to end operations. Montana and Washington had the second largest decreases of 10 percent, a raw total of 2,782 and 3,717 farms, respectively. Idaho trailed behind at 8 percent with 2,119 farms ending operations. The decrease in farms over the last five years is the largest seen between two National Agricultural Censuses. This decrease in farming operations is seen despite the highest net farm income recorded during this time frame. Why, during a period of historical profits were farms ending operations? Look at the breakdown of farm number changes by income. According to the census data in 2022 and 2017, farm losses were highest in the low-income categories. The smaller farms are the ones disappearing at upwards of 40% and close to 50% in the case of Idaho farms with incomes between $200,000 to $499,999. Farm number losses are huge for operations under half a million dollars in total sales. But the trend reverses for farms with revenue above $500,000. Almost all income brackets above $500,000 saw an increase in farming operations (except one income bracket in Montana). With the largest increases in the top income category of $10,000,000 or more. The loss of farms isn’t driven by only one issue. Regulations, input costs, pandemic changes, trade disruptions, aging operators, and agricultural land development are all pushing out farms. The smallest farms are experiencing the greatest challenges. Some farms have risen to the occasion and grown to survive the market variance. However, there are still many farms ending operations. Everyone should be concerned about the loss of farms in the United States. The majority of our food production is grown by the largest operations, so volume isn’t the concern but security is. Just look at the result of the COVID shutdowns. Many of the large operations experienced plant and processing shutdowns for weeks at a time from outbreaks among employees, and grocery store shelves went empty. Having many producers involved in food production insulates end consumers from supply disruptions. One producer will likely experience operational challenges throughout the growing season be it weather, trade, policy, or labor challenges. If only a few producers are present in the market supply disruptions are inevitable. However, if many producers, both small and large, are actively engaged in the industry, it insulates the end consumer from supply disruptions, because it is unlikely many producers face the same production challenges. Challenges are increasing for farm operations as this last year was expected to be one of the largest declines in net cash farm income in history, the largest in nominal terms and third largest adjusted to inflation. Farms need to become resilient to market fluctuations like the one experienced in 2023. Policies in the mountain states need to encourage agriculture. Efforts should be made to ease the burdens of remaining in the agricultural industry for small producers like decreasing regulatory burdens, encouraging agricultural land to remain in production at reasonable rental rates, improving labor supply restrictions, and encouraging trade agreements benefiting agricultural products. Before policies are adopted it is worth questioning what the result will be for small producers, because those are the operations least likely to survive.

Unanimous support. That was the response from the Idaho legislature to Mountain States Policy Center’s recommendation to close the state’s home equity theft loophole. The Senate adopted HB 444 (Home Equity Theft reform) by a vote of 34-0 on March 5. The House passed the bill 66-0 on February 9. MSPC worked with the Pacific Legal Foundation to highlight the need for Idaho to adopt this reform to protect taxpayers. Rep. Jeff Ehlers, sponsor of HB 444, told me this today about the bill’s adoption: “Not only is this legislation important for complying with the Constitution, it also leads to greater fairness for Idaho taxpayers. I appreciate the unanimous support of my colleagues in both the House and Senate in closing the home equity theft loophole in our state.” Madi Clark, a Senior Policy Analyst for MSPC, wrote a study on the need for this reform and testified in the House and the Senate by legislative invitation on HB 444. Madi told lawmakers: “Imagine a homeowner who is struggling to make ends meet and then comes into debt of a few thousand dollars to the local government in a home they own with tens of thousands of dollars in equity. The local government decides to foreclose the property and so sells the home and pays the debt. But instead of returning the remainder of the equity after the debt is paid, the government keeps this for themselves. This is home equity theft . . . The [U.S.] Supreme Court decision has only ruled this action unconstitutional but the laws remain on the books for many states. Idaho is one of those states. In Idaho, the current wording of the law permits local governments from foreclosing a property and instead of selling the property, they can gift it to another government entity and take the equity in the property for themselves. HB 444 will remove the loophole from local governments. This is a good policy protecting property owners from unwanted government greed. It also protects local governments from future lawsuits.” MSPC is grateful to Rep. Ehlers for taking the lead on this reform and to the Idaho Legislature for fully closing the state’s home equity theft loophole. Governor Little is expected to act soon on HB 444. Here is a KTVB 7 interview featuring MSPC's Madi Clark and Rep. Ehlers on the adoption of HB 444:

Mountain States Policy Center is proud to announce the recipients of our 2024 Elevation Award: the legislators in Montana and Idaho who have championed education reform. The Elevation Award is the highest honor of Mountain States Policy Center, given to individuals committed to advancing and elevating free market principles and ideas throughout our region. Our recipients will be honored at our 2024 Spring Dinner in Coeur d'Alene on Friday, April 12th. This year, MSPC recognizes Montana Representative Sue Vinton, who led the charge to bring charter schools to the Treasure state. Representative Vinton also spearheaded the effort to introduce Education Savings Accounts for special needs children in Montana. In Idaho, MSPC honors state House Majority Leader Jason Monks, Representative Wendy Horman, Senator Doug Ricks, Senator Lori Den Hartog and Senator C. Scott Grow. All of these leaders have been instrumental in the introduction of the Parental Choice Tax Credit proposal for families that would have offset the cost of school tuition and other education-related expenses. Representative Horman has also been a strong advocate of transparency, including the Public School Transparency Act. This MSPC reform idea would require all public school districts, both on the first page of their budget and also on the front page of the district’s main website, to clearly report items including total spending, teacher to student ratios, and other data that would make it easier for parents and the community to understand the resources that a school district may or may not have. "Increasing education opportunity is one of the greatest civil rights issues of our time," said MSPC President Chris Cargill. "These elected leaders represent the future of education, not the past." MSPC's Spring and Fall Dinners are some of the region’s largest policy galas. More than 600 will be in attendance at the Coeur d'Alene Resort in April, including small business owners, elected officials, and citizens. Former White House Press Secretary Kayleigh McEnany will be the keynote speaker. Mountain States Policy Center is a non-profit, non-partisan research center that provides free market solutions to successfully grow the region. MSPC concentrates its work in Idaho, Eastern Washington, Montana and Wyoming – one of the first organizations of its kind to cover multiple states. MSPC’s mission is to empower those in the Mountain States to succeed through non-partisan, quality research that promotes free enterprise, individual liberty and limited government.

In an era defined by rapid technological advancement, the Idaho House of Representatives sets a shining example of how legislative bodies should approach the oversight of Artificial Intelligence (AI) and its evolution. Idaho House Bill 568 aims to establish an Artificial Intelligence Advisory Council that creates a balanced approach that fosters innovation while ensuring accountability and limited oversight are upheld. This bill showcases the benefits of allowing the free market to progress without excessive restrictions or red tape, paving the way for a future where AI contributes positively to society. The core of the proposed legislation lies in the establishment of the Idaho Artificial Intelligence Advisory Council, a body composed of both legislative members and governor appointees from diverse backgrounds, including representatives from both major and minority parties from the Idaho House and Senate, appointed by legislative leaders, and expert appointees chosen by the governor. By including stakeholders with varied perspectives, the council will hopefully create a holistic approach to AI oversight, taking into account every industry's perspective and future consideration. Crucially, the legislation mandates the monitoring and assessment of AI systems employed by state agencies, emphasizing transparency and accountability. Through annual reports, agencies are required to provide detailed information on the capabilities, data inputs, testing procedures, and fiscal impacts of these systems. This level of transparency not only promotes accountability but also facilitates informed decision-making by policymakers. Bill Sponsor Rep. Britt Raybould, R-Rexburg, speaks from the House floor at the State Capitol building on Jan. 23, 2024. HB 568 creates insight for the council to advise the governor, legislature, and state agencies on the nature, magnitude, and priorities of AI-related issues. This advisory role ensures that policymakers are well-informed about the implications of AI advancements and can make evidence-based decisions to harness its benefits while mitigating potential risks. What sets this approach apart is its recognition of the importance of allowing the free market to drive AI innovation. Rather than imposing overly burdensome regulations that stifle creativity and progress, the legislation encourages collaboration between government and industry stakeholders. By appointing experts from the private sector and leveraging the expertise of the Office of Information Technology Services, the council can stay well-informed of the latest technological developments and best practices. The Idaho legislature is demonstrating a forward-thinking approach to AI governance. This approach not only fosters innovation and economic growth but also ensures that AI technologies are developed and deployed responsibly, with due regard for societal impacts and future expansion. By striking a balance between facilitating innovation and ensuring accountability, the proposed legislation helps pave the way for a more open and thoughtful process of regulation, whilst not stifling the opportunity of full benefit. It exemplifies the benefits of allowing the free market to flourish while providing necessary oversight to safeguard against potential risks. As other states and nations grapple with the challenges of AI governance, Idaho stands out as a beacon of pragmatic and forward-looking leadership in the digital age, so long as the council members remember their role in promoting free market practices.

The evidence of success was there. The testimonies were heartbreaking. The parents traveled from across the state. But in the end, it didn’t seem to matter. A majority of Idaho legislators serving in the House Revenue and Taxation committee today refused to continue the conversation on even the smallest advancement of education choice options for families. House Bill 447 would have allowed parents to take a tax credit to help offset the cost of educational expenses outside the public school system. It wasn’t a voucher. It wasn’t a new government program. It didn’t touch a penny of K-12 funding. It was something already familiar to many Idahoans (grocery tax credit, anyone?). Essentially, it would have helped level the playing field for those students who don’t fit into the public school box. Parents showed up in person, from across the state, to plead with legislators for more options. One father told legislators he drives 40 minutes each way to a school in another area to make sure his children have the best education possible. But parents and families were rebuffed. Instead, legislators sided with school district officials and union leaders who painted a bleak picture of the proposal. One said that the $50 million spend would create havoc in the state budget. Representative Sage Dixon then asked “so would spending the $50 million on K-12 create same kind of problem?” The answer, of course, was no. After all, $50 million is less than 1% of the state's total spending. Noting that it was a controversial topic, Representative Jeff Ehlers motioned to move the legislation to the floor so that all House members could be involved in the discussion. But the majority even said no to that. Other conservative states are advancing education freedom. Last session, Montana and Utah successfully passed legislation. This year, Wyoming and Alabama joined. Idaho remains with the group of more liberal states that have more limited options. The Heritage Foundation found Idaho's choice ranking at 29th - below states including Vermont and Maine. There was no consistent theme from legislators who opposed today. Some said the state couldn’t afford it. Others said K-12 needs more money. Another claimed there was no accountability. Few arguments were about improving outcomes for kids, as Majority Leader Jason Monks pointed out. Ironically, many of the same arguments made today were used against the opening of public charter schools. And yet, legislators pointed to charter schools as evidence that Idaho already had enough choice. Whatever the reason, parents and kids who attended the hearing left disappointed - again. It’ll be a long journey back home. Families who struggle to make ends meet will have to continue footing two bills. And if they can’t afford that? Well, legislators have sent a clear message. Meanwhile, those who oppose choice and competition celebrate again, defeating the greatest civil rights issue of our time for atleast one more session.

Special needs families in Montana had reason to be excited in 2023, as lawmakers advanced choice opportunities for the children who need it most. The arrival of 2024, however, put a mean-spirited damper on the celebration. Montana House Bill 393 would allow parents of a student with a disability the chance to have access to an Education Savings Account or “ESA.” ESA’s are extremely popular with parents and are common in many states around the nation. Polling has shown overwhelming support across party lines and demographics. The ESA in HB 393 allows parents who choose to sign up to access roughly $6,800 that can be used on education therapies, private school tuition and fees, textbooks, curriculum, tutoring, transportation, and other education-related expenses. It can be a tremendously helpful tool for parents who might not have the resources to help their child. Speech and occupational therapies alone can cost a family thousands of dollars each year – an expense many families cannot afford. Put simply, if a student isn’t succeeding in the traditional classroom setting, this new program is a lifeline. And it can help alleviate pressure on a public school that may be struggling to meet a student’s needs. It is a win-win. But the old-guard education establishment doesn’t see it that way. These defenders of the status quo include the Montana Quality Education Coalition, made up of public school superintendents and union leaders from across the state. They’ve filed a cruel lawsuit to stop special needs kids from receiving any ESA benefit, incorrectly labeling the program a “voucher” and accusing parents who want further options of “privatizing education.” This same organization also sued to prevent implementation of Montana’s new public charter schools. Their harsh assessment is that the only schooling option should be their system, regardless of whether it works for the student. They’ve attempted to sully the reputation of Representative Sue Vinton, a special needs mother herself who led the charge to provide more options. “The arrogance and the lack of respect by some of the opponents – I would never presume to tell someone else how they should educate their child, and that’s what this bill does, it gives each family that choice, that opportunity to choose the best path forward,” Senator Vinton rightfully said. In their lawsuit to stop public charter schools, opponents tried to claim the schools were unconstitutional. A Montana district court judge disagreed. Opponents tried to say money was being incorrectly diverted from traditional public schools. The court disagreed. Now, in their latest lawsuit against special needs kids, opponents admit that the state Constitution does “provide such… educational programs as it deems desirable,” but say their needs as a “system” come first. The bottom line for any court to consider is whether the state has a responsibility to fund the education of children, or the continuation of a system. Education choice is popular among parents because it works to improve outcomes. In fact, a review of more than 180 empirical studies on various education choice programs shows 82% had a positive impact. The Peabody Journal of Education wrote “a review of the empirical research on private school choice finds evidence that private school choice delivers some benefits to participating students—particularly in the area of educational attainment—and tends to help, albeit to a limited degree, the achievement of students who remain in public schools."​ When activists in West Virginia sued to stop the state’s new education choice plan, West Virginia’s Supreme Court upheld the program saying that "The [state] Constitution allows the Legislature to do both of these things" – provide a thorough, quality public school system and a plan to help expand choice options for parents. Education opportunity is one of the greatest civil rights issues of our time. The future of the country is eager for change, whether the old-guard education establishment likes it or not. Those who ignore their plea for innovation and options risk the judgment of history.

Many Idaho legislators come from rural communities that are home to many farms. As the debate over education choice has unfolded over the past several years, their opinions have yielded extra weight. Those opposing any additional education choice options have been using the name of the Farm Bureau in an attempt to sway lawmakers who may be undecided. "Learning from the mistakes of other states" blared one headline, referring to the Indiana Farm Bureau and contending that rural communities are opposed. In another recent interview, it was suggested that farmers and rural communities stand in opposition. The problem is the Idaho Farm Bureau and its members don't have a position on education choice, as they made clear today. The good news is that education choice can be very popular in rural areas. In fact, the National Center for Education Statistics shows there are 814 rural charter schools across the country, as well as 7,045 rural private schools. This demonstrates that options in rural communities can be created, supported and sustained.

Happy National Sunshine Week! No, I’m not talking about the weather getting better and days getting longer but the time of year that Americans across the country celebrate the importance of open government laws to protect our right to know what public officials are doing on our behalf. One reform that we’d like to see across the mountain states in honor of Sunshine Week is the creation of an Open Government Ombudsman. This type of citizen-focused open government expert would help reduce the possibility of litigation when a public records dispute occurs. A similar concept is currently used in Connecticut. That state uses a Freedom of Information Commission to help mediate access to public records. An Open Government Ombudsman would be helpful for all states. Consider the following cloudy example standing in the way of the full sunlight of transparency in Idaho. The Idaho Education News has been in an ongoing public records dispute with the University of Idaho. A January 17 blog post notes: "We adamantly believe public records belong to the people of Idaho, who shouldn't have to pay for what belongs to them," said Jennifer Swindell, managing editor with Idaho Education News.  "We ask for documents that are in the public interest, because taxpayers deserve to know how their money is spent.” The media outlet originally received a $2,400 public records invoice from the University of Idaho. Swindell recently told me: “I've been a reporter and editor for more than 40 years and I've never paid for a public record — until now — $88.65 to the University of Idaho. And it's especially egregious for us to be invoiced by the University of Idaho, which has a staff of lawyers and is supported on hundreds of millions of taxpayer dollars. Idaho needs an independent review because too often we dispute the actions of state agencies either denying our request, over-redacting or delaying the release of public records and we have no recourse other than to go to court, which isn't realistic.” Strong open government laws are critical to a well-functioning republic and ensuring public accountability. Along with creating an Open Government Ombudsman, there are a couple of other easy reforms lawmakers could enact to help make the legislative process more transparent. To help maximize public involvement in their governance, lawmakers should amend their rules to require at least 3-day public notice of the bills to be heard at public hearings. Providing advance notice of bills scheduled for public hearings is a standard practice among neighboring states. This type of public notice is necessary to allow for meaningful involvement by citizens in the bill hearing process. All legislative committees should also provide the option for remote testimony. We discussed these legislative transparency ideas before the session started with Idaho Reports (click on the image for video of the interview). Idaho's Public Records Law Manual clearly explains: “Open government is the cornerstone of a free society. Idaho’s constitution proclaims: “All political power is inherent in the people.” The foundations for an accountable government can be found in strong citizen oversight, and one of the most critical tools to achieve this is open government laws. For National Sunshine Week we encourage lawmakers to adopt legislative transparency reforms and consider creating an Open Government Ombudsman to help reduce the likelihood of litigation and to improve the administration of state open government laws. Additional Information MSPC joins Idaho Reports to discuss transparency reforms Importance of open government laws on display with shocking stories Idaho lawmakers should provide at least 3-day notice of bills scheduled for public hearing

There's a very familiar debate going on at the Idaho state capitol, but consistency doesn't appear to be one of the topics. Idaho legislators seem on the verge of expanding the state’s successful Idaho Launch program. The idea, passed by lawmakers last year, is to help students cover about 80% of the cost of tuition at in-state colleges, universities and workforce training, specifically for in-demand careers at an educational institution that works best for their needs. The program, itself, is in-demand. Applications have blown past the 7,500 originally expected. At the end of 2023, there were nearly 13,000 applicants. Helping students cover some of the cost of a tailored education plan is no doubt a popular policy and might sound familiar. In fact, lawmakers are having a similar debate right now regarding a plan to allow parents to take a $5,000 tax credit to help them cover the cost of a K-12 education program that best fits their child’s needs. Opponents of a K-12 tax credit, or any other education choice program, have insisted that state taxpayers should only cover the education expenses of those who stay in the public school system. No private help. No religious institutions. No assistance, even for those who need it most. But these arguments have not been made against the Launch program. We asked the Idaho Workforce Development Council for a list of the institutions where the grants for Idaho Launch can be used and where students have applied. It is no surprise that Boise State, Idaho State University and the University of Idaho top the list. Also near the top is Brigham Young University-Idaho, a private, religious school run by the Church of Jesus Christ of Latter Day Saints. Northwest Nazarene University is another private, religious institution on the list. Dozens of other education businesses not run by the state, including Vogue Beauty School and the Nathan Layne Institute of Cosmetology, are also covered. When Launch was up for discussion last year, legislators were split. Some called it a way to ensure the state’s future workforce needs were met. Others called it socialism and no different than federal action on student loans. But ask the sides about their opinion on the K-12 tax credit and you often get a completely different response. Though the concept and aim are very similar, it is rare to find a lawmaker either in favor or opposed to both. Yes, there are some differences between Launch and the K-12 tax credit. For example, the tax credit is capped at no more than $50 million. The original price tag for Launch was $75 million. And, indeed, the state constitution has specific language regarding the responsibility to fund K-12 education. But the biggest difference between the two ideas is that few lobbyists or special interest groups opposed Launch. The same can't be said for the K-12 tax credit. Whether helping young adults achieve a head start in their careers or providing young students with the opportunities to meet their individual learning needs, the focus should be on what's best for the student.

The cost of doing business is going down in Idaho under a bill signed today by Governor Little. Relating to the taxes charged for Unemployment Insurance, HB 428 was adopted by a vote of 69-1 in the House and 35-0 in the Senate. According to the fiscal note for HB 428: “The legislation reduces the multiplier from 1.3 to 1.2, resulting in $44 million in net savings to employers in the first year. By the end of five years the reduced multiplier would provide an estimated $117 million in tax savings. The new multiplier of 1.2 will establish a target reserve balance equivalent to 14.4 months of benefit payments at levels similar to the Great Recession. Lowering the multiplier will have no impact on the Idaho State General Fund, any dedicated fund or federal funds.” Governor Little said in a press release: "Idaho has the strongest economy in the nation, putting us in the enviable position of being able to change the unemployment insurance tax formula to save employers money while maintaining a solvent trust fund. We are on pace to deploy $3.7 billion in tax relief since I took office in 2019, with even more on the way. Idaho is proud that we have delivered more tax relief per capita than any other state while making meaningful investments in schools, roads, and infrastructure." Additional tax relief is likely to be enacted this year. Lawmakers are also currently considering HB 521 (Tax relief and school facilities funding). Along with providing additional funding and accountability mechanisms for the school facilities funding, HB 521 would continue the state’s ongoing income tax rate reduction efforts to help improve regional economic competitiveness. The combined corporate and personal income tax relief proposed under HB 521 is estimated to be around $59.1 million for Fiscal Year 2025. According to the Tax Foundation, moving from a 5.8% to a 5.695% individual income tax rate would help improve Idaho’s ranking from 33 to 29 for all states and from 24 to 20 for those states where wage income is taxable. From Unemployment Insurance tax reductions to additional income tax relief, Idaho continues to put out the “Open for Business” sign.

As a child, I moved across the country a handful of times. One of my memories when moving was watching my dad find all of the paperwork and pay the fees to transfer his occupational licensing for veterinary medicine. Each move meant time and money needed to be set aside to meet the slightly different veterinary licenses in each state. To my younger self, it didn’t make any sense why he needed to repeat a license for a job he had proven competency in for years. Now as an adult, it still doesn’t make any sense and I’ve realized that state-specific, non-universal occupational licensing exists in 22% of professions and has grown over the last few decades, from 5% in the 1950s. Why? It has nothing to do with the quality of service or requests from consumers. In many situations these are industry-created artificial barriers to entry, limiting competition in the market. Occupational licensing does the reverse of its promises: decreasing the quality of service, increasing prices, decreasing employment, and frequently having a disproportionate effect on low to middle-income earners. A frequent example of occupational licensing harm can be found among hair braiders. Many states have required hair braiders to attend cosmetology school. Except, with the glaring oversight that cosmetology school doesn’t teach the braiding profession. Thankfully, many of the braiding licensing requirements have been overturned in recent years but while they existed they caused unnecessary economic harm to many families. Idaho has joined the occupational licensing reform movement by adopting the wide-sweeping Senate Bill 1351, signed into law in 2020. The act established a sunrise review process, established a procedure for universal licensure, and eased licensing barriers for people with criminal records. However, two bills in this year’s legislative session indicate that occupational licensing reform is still needed in the state of Idaho. House Bill 647 would streamline the cumbersome process of continuing education requirements for licensees. The bill also directs the licensing authorities to eliminate or change the continuing education requirements that are not in compliance with the bill’s intent of easing barriers to entry. It is currently waiting on hearing in the House Business Committee. The second reform, HB 393, gained traction in the House Health and Welfare Committee and was able to pass the House. House Bill 393 would facilitate Idaho’s participation in the interstate practice of licensed professional counselors. Currently, counselors are unable to work with any client outside of state lines, even if their clients are traveling and experiencing a crisis. Many states have already adopted legislation that would allow interstate licensing. These interstate licensing procedures allow needed guidelines to remain in place with higher-risk professions. Health professions are some of the few occupational licensing requirements where the benefit of licensure justifies the associated cost. HB 393 would allow licensing to remain in place, strengthening the intention of SB 1351’s universal licensing attempt. HB 393 is awaiting a vote in the Senate. Idaho’s reform efforts are gaining traction in increasing jobs and upward professional mobility, decreasing prices, and creating economic gains. There is still room for improvement as Idaho ranked #28 nationally (#1 was the highest burden) in the number of occupations requiring licensure. Occupational licensing reform doesn’t argue for poor service from any profession but recognizes that consumers encourage better quality through reviews and choice than the quality licensure creates. Many professions are better served by utilizing voluntary programs, removing unneeded licenses, and relying on service review websites like Yelp and Angie. Even the American Veterinary Medical Association is recognizing the hassles and costs of state-specific licensure and is looking for better practices. A life-changing event, like moving or employment changes, doesn’t change abilities. It’s time states recognize this conclusion and support occupational licensing reforms. Idaho is no exception and must keep moving on reforms that make sense for adults and children.

The Gem State's robust charter school law got even stronger this year when Governor Little signed HB 422 (Accelerated Public Charter School Act) into law on February 27. HB 422 was adopted by a vote of 66-3 in the House and 32-1 in the Senate. According to the statement of purpose for the new law: “The Accelerating Public Charter Schools Act updates Idaho’s Charter School laws. In 1998, the Idaho Legislature passed the Idaho Charter School law to allow charter schools to operate in Idaho. Idaho now has 74 charter schools serving 10% or approximately 30,000 children. While there have been several amendments to the charter school laws over the years, nothing substantial has been introduced to incorporate the majority of what we have learned in the past 26 years. This legislation does that.” A press release by Governor Little noted: “In his State of the State speech in January, Governor Little laid out his plan for the improvements championed in House Bill 422. This bill cuts red tape around supporting charter schools in Idaho through best practices, development, and educational and operational assistance. It gives more flexibility for the high performing charters of Idaho and more support to charters that are struggling and need more guidance.” The National Alliance for Public Charter Schools said this about the new law: “HB 422 streamlines Idaho’s charter school law with the goal of balancing charter school autonomy and accountability. Now, public charter schools in Idaho will have more flexibility to innovate while still being held accountable for results. In addition, HB 422 includes the following provisions: A charter school’s initial contract must be for six years, giving a new school sufficient time to prove its worth before it faces renewal. A high-performing charter school may have its contract renewed for up to 12 years, allowing the school to spend more time focused on educating students instead of completing bureaucratic paperwork requirements. While HB 422 represents forward progress for the charter school sector in Idaho, more work remains to be done to provide charter schools even more flexibility to innovate, especially as it relates to teacher policies, and more equitable funding and facilities support – all while holding the line on ensuring that charter schools deliver results for Idaho’s families and taxpayers. We look forward to continuing our partnership with Bluum, the Idaho Charter School Network, and Idaho policymakers to ensure families have access to high-quality public school options.” Idaho Education News highlighted this quote from one of Idaho’s charter school leaders: “It reduces the administrative burden on our principals, because the renewal process takes time away from supporting teachers and students. Time is a leader’s most precious commodity. The lengthened renewal timeframe also reduces the risk to facility lenders during refinancing, driving down interest rates and keeping more dollars in our classrooms,” said Jason Bransford, chief executive officer of Gem Prep Schools. Mountain States Policy Center believes that education choice means an all of the above approach – traditional public schools, charter schools, magnet schools, micro-schools, homeschooling, and more. It is very exciting to see Idaho continue to embrace charter schools and act to enhance their ability to meet the needs of students and families who are looking for alternative education opportunities.

In today’s housing market, ‘to each, their own’ is rarely used to describe current homebuyers. The more typical homebuying experience is ‘you get what you get and you don’t throw a fit.’ For many in the mountain states, a tantrum is happening because there are few attainable homes ‘to get’. Mountain States Policy Center recently looked into the cost of building and buying homes in the region and how to improve housing supply (here is our new study). Housing affordability and availability are major concerns in the Mountain West. Housing choices across the region have restricted and the area is one of the most unattainable in the nation. From 2018 to 2023, Idaho and Montana saw the largest home price increases in the nation at 74% and 72%, respectively. These higher costs leave many homebuyers in a lurch between high rental costs and growing down payment requirements. What do the local and state governments do in this housing crisis? The answer is not a government solution but a market solution. Government track records in the area of housing affordability are very poor. Many of the so-called government fixes, like rent control, make housing more unaffordable. Just look at nearby Washington. It is one of the most unattainable places to build or buy a home in the region and has held that position for many years, especially around the Seattle-metro area. All levels of Washington government have created ‘fixes’ to the development problems facing the state. Limiting unwanted urban sprawl by severe growth management laws, protecting single-family residential zones from higher density housing, and pushing rent control and subsidized housing policies, to name a few. The result. Home costs just climbed higher. Why? Because not one of these solutions fixed the basic economic tenets of supply. If home supply goes up, prices go down. A variety of policies tailored to local needs must aim for more housing, not government band-aids on a supply issue. Idaho, Montana, and Utah have always been more affordable than neighboring Washington, but in the last four years, this has shifted as new residents flock to these states. These states are unaffordable because demand has increased, but supply has not grown by the same magnitude. The Mountain West region is one of few areas where it is cheaper to build a home rather than to buy a home, primarily in the more rural areas. Lower land costs and fewer regulations, make it cheaper for homebuyers to build rather than buy a typical single-family home. But this trend disappears in more urban neighborhoods because there are typically more regulations, development costs, and a tighter supply of construction labor. These are self-inflicted consequences of local government choices. How will the mountain states solve the housing crisis? The solution is allowing the market to supply houses. There is a ‘swarm’ of small construction entrepreneurs available to create a better supply of homes in this region, but our policies need to be encouraging to these businesses. A few policy positions that improve housing supply include limiting building permit delays and complexity, encouraging light touch density development in highly demanded zones, not endangering property rights with growth management policies, avoiding excessive building mandates, and prohibiting artificial market manipulations like rent control and subsidies. The housing attainability crisis our region faces is not going to be fixed through government solutions and funding. The attainability crisis is an availability crisis and our local policies need to improve housing supply with the market, not the government. Improved housing supply will grant homebuyers more attainable choices. Our region will be better off when it is easier to say of the choices we make as homebuyers, “to each, their own,” rather than ‘you get what you get.’ Note: This topic will be the focus of our Peak Policy update on March 1 at 12 p.m. MST. You can watch it live here on YouTube.

It isn’t often you see an overwhelming bipartisan vote in Congress for tax relief but that’s exactly what occurred on January 31 in the U.S. House. By a vote of 357-70, the House approved the Tax Relief for American Families and Workers Act of 2024. The bill is still waiting for action by the U.S. Senate. According to congressional insiders, if the Senate doesn’t act on the bill in the next few weeks, it is unlikely to be adopted this year. Here are some of the major provisions of this tax relief bill for individuals and businesses: “modifies the calculation of the refundable portion of the child tax credit to require the multiplication of the credit amount in calendar years 2023-2025 by the number of qualifying children. The maximum refundable amount per child of such credit is increased to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025, with an inflation adjustment beginning after 2023.” “allows taxpayers to delay the date on which they must begin deducting their domestic research or experimental research costs over a five-year period until 2026. Taxpayers may therefore expense such costs incurred between 2022-2026.” “extends the allowance for depreciation, amortization, or depletion in determining the limitation of the business interest deduction. It also extends 100% bonus depreciation and increases the limitations on expensing of depreciable business assets.” “excludes from gross income, for income tax purposes, compensation for losses or damages due to certain wildfires. It applies only to payments received by a taxpayer after 2019 and before 2026.” “increases the low-income housing tax credit ceiling to 12.5% for calendar years 2023-2025. It also lowers the bond-financing threshold to 30% for projects financed by bonds issued before 2026.” The Tax Foundation provided this analysis of the bill: “While the package is far from ideal, it represents a step in the right direction by taking a fiscally responsible approach to improving cost recovery. Most importantly, it addresses a major competitive disadvantage in our current treatment of research and development (R&D), returning to the international norm of allowing companies to fully and immediately deduct R&D expenses, including salaries for scientists and researchers. Similarly, it allows companies to fully and immediately deduct investment in equipment and other short-lived assets. However, it only extends these provisions temporarily through 2025, creating uncertainty for taxpayers and dampening the policies’ otherwise strong pro-growth incentives.” A letter to Congress by the National Taxpayers Union said this about the proposal: “This legislation would deliver a much-needed boost to our economy while providing families with tax relief at a time when inflation remains persistently high. Importantly, it will accomplish these goals without significantly adding to our national debt. The Tax Cuts and Jobs Act of 2017 (TCJA) helped to create a strong economic climate that boosted wages, created jobs, and increased capital investment. Unfortunately, due to the lingering effects of the pandemic and a number of poor public policies, economic conditions have deteriorated and many Americans are struggling. As more and more portions of the TCJA have started to expire and phase out, it is imperative that Congress take action . . . This is a strong pro-growth tax package that sets the stage for making all provisions of the TCJA permanent in the future.” A coalition letter signed by numerous trade groups and state chambers had this to say about the bill: “Tax policy plays a critical role in the ability of American businesses to thrive, create jobs in the U.S., and effectively compete in today’s global economy. The Tax Relief for American Families and Workers Act will restore three tax policies vital to workers and America’s future: immediate expensing of domestic R&D expenses, enhanced interest deductibility, and 100% accelerated depreciation. All three of these tax policies have a long history of bipartisan support and are critical to strengthening America’s global competitiveness. They’ve enabled U.S. businesses to innovate, create good paying jobs, protect our national security, and remain at the cutting edge of the global economy. Restoring these provisions will have a profound impact on business investment, economic growth, and job creation.” The Senate Finance Committee Ranking Member Senator Mike Crapo (Idaho) issued this statement on February 28 about the current status of the bill and his concerns: “My key concerns, shared by many of my colleagues, remain the same – the prior year’s earnings provision must be dropped and replaced with actual tax relief. But with each week that has passed, members have strongly voiced additional calls for numerous modifications, and there are also increasing concerns about making 2023 changes this far into the IRS tax filing season. While I remain committed to seeking a bipartisan resolution that a majority of Senate Republicans can support, I hope the bill’s proponents commit to pursuing a more constructive strategy to achieve a mutually agreeable outcome.” The opportunity to enact a bipartisan congressional tax relief bill would be a terrible thing to waste. Hopefully the House and Senate will be able to come to an agreement soon on tax relief that can be enacted this year for individuals and businesses.

At the invitation of Senator Lynda Wilson, I had the opportunity to testify on February 27 on the proposal in Washington to ban a state and local income tax (I-2111). Here are my prepared remarks: "I-2111 would implement the clear and consistent intent of Washington voters to stop income taxes from being imposed. Although some believe the state constitution prohibits an income tax, government officials can currently impose up to a 1% tax if uniform. I-2111 would fully close this door and prohibit a state or local income tax of any kind, assuming of course the plain meaning of words is honored (unlike what occurred with the recent capital gains income tax). For years, the state Department of Commerce advertised the lack of an income tax as being a ‘competitive advantage’ for Washington. To further protect this advantage, along with acting on I-2111, lawmakers should also take the next step and adopt this policy as a constitutional amendment. This is something that Texas and Tennessee recently did to signal to residents and businesses that an income tax is fully off the table. With Washington voters rejecting 10 straight ballot measures to impose an income tax and now qualifying I-2111, it is time for state officials to finally prohibit income taxes." I-2111 is currently scheduled for executive action on March 1. To view my testimony as delivered click on the image for the video.

The slogan of the Federal Trade Commission is “protecting America’s consumers.” But the decision by the FTC to block the merger of Albertsons and Kroger has done the exact opposite. The matter now heads to federal court – the first time a supermarket merger has been litigated since 1988. It’s hard to really understand who the government is protecting with Monday’s announcement. One thing is for certain: grocery giants including Walmart, Costco and Amazon love this news. It means one less competitor. And that was the issue regulators and opponents seemed to miss. Instead of reducing competition, the merger of Albertsons and Kroger would have actually created more competition. Walmart/Sam’s Club makes up nearly a third – 30 percent – of the U.S. grocery market share. Costco tallies another 7 percent. Amazon is moving quickly and accounts for more than 5 percent. And consider this: Amazon Prime, Walmart+ and Costco have more than 250 million subscriptions. Even if the Albertsons-Kroger merger proceeds, it would account for just 9 percent of nationwide sales, according to the International Center for Law and Economics. But what it would do is get the attention of the big three – increasing competition with their 42% of the current market share. Furthermore, Walmart, Costco and Amazon do not have a unionized workforce – Albertsons and Kroger do and have earned the endorsement of the merger from union leaders. The government claims workers would be harmed, but union leaders likely know better. Unfortunately, government regulators seem to be relying on an outdated model to determine what is best for consumers and grocery stores. Does a grocery store have to be a traditional brick and mortar location? Are online supermarkets be counted? If not, why? It is clear that Amazon, Walmart and Costco directly compete with Kroger and Albertsons, so why wouldn’t they be included in any merger analysis? Nearly 30 years ago, supermarkets accounted for 81% of retail sales. That dropped to 61% a decade later, and today, it’s near 50%. Where have all of the customers gone? Online and warehouse stores. An economist with the Strategic Resource Group recently told Yahoo Finance "Kroger’s acquisition of Albertsons is the last, best, and final chance to level the playing field." A review of all of the Albertsons and Kroger locations throughout the country shows very few places where the two stores both have locations, and in the places where there was overlap, Albertsons and Kroger agreed to divest. The companies even announced a plan to invest $500 million to lower prices on day one of the merger, and invest an additional $1.3 billion to improve Albertsons stores. This would have been enormously beneficial to Idaho and the surrounding region. By taking the extraordinary step to block this merger, the government does more harm than good. They'll have to defend the action in federal court.

Once a month I brace myself for a local Costco run in Central Washington, where I either push/pull two carts simultaneously or recruit a kid to help me (if they can see over the shopping cart handlebar). I used to buy the five-dozen Kirkland egg pack, which would last my family of seven about two weeks. What can I say? We eat a lot of eggs. But last month the Costco egg aisle was strangely empty during my visit. I bought the boxed egg whites instead. I assumed there was some kind of temporary supply chain problem (not uncommon since Covid), or some other local store issue. This week, to my dismay, the eggs were back, but my staple five-dozen Kirkland pack was nowhere to be found. I had to settle on two, 24-egg packs at almost $11 a pop. This was major sticker shock, considering the five-dozen pack cost me less than $15. I noticed “cage-free” prominently stamped on the 24-pack and figured, “Well, Costco must have decided only weirdos like me want to buy five-dozen ‘caged’ eggs at a time. Consumer demand must be steering toward higher-quality, cage-free eggs. Guess I’ll have to pony up.” But this week I stumbled across an alarming article explaining that consumer preferences have nothing to do with it. A Washington law passed in 2019 took effect for the first time in January, requiring all retailers to sell cage-free eggs. The empty egg aisle in Costco was a reorganization in response to this law. Per usual, Washington piggybacked on yet another fatuous Californian idea, which adopted these standards in 2015. “Cage-free” in Washington means that egg producers must meet the 2017 edition of the United Egg Producers Animal Husbandry Guidelines, which require one square foot of space per hen. They may be packed in like sardines, but they are not in a cage. Some people mistakenly believe that “cage-free” means “healthier,” but there is no evidence that is the case. Instead, the husbandry guidelines focus on the humane treatment of birds. The cage-free requirement means that egg producers must invest significantly to expand their facilities. “Egg producers report that cage-free systems require at least twice the capital of conventional facilities and require two to three times more labor than conventional facilities,” according to the Iowa Farm Bureau. “Cage-free systems also require higher amounts of feed, diseases can be more widespread and it also increases some food safety concerns.” Free-range eggs have more production requirements than conventional or cage-free eggs, but the nutritional advantages are minor, compared to the cost increases. There is limited evidence that organic, “free-range” eggs have slightly more omega-3 levels compared to their conventional counterparts. However, the remaining nutritional profile for commercial organic, free-range eggs and conventional eggs (caged or otherwise) is nearly identical. The nutritional composition of the egg is based on the hen’s diet, which is similar for all housing types. The real difference between these eggs is the price, which is roughly $2 to $5 more per dozen for a cage-free product. The price point means trouble for price-sensitive consumers and businesses that rely upon eggs. Although there is a small segment of the population willing to pay a premium for cage-free eggs, more than half of U.S. consumers are primarily motivated by price, according to a 2023 joint study conducted by researchers at Michigan State, Kansas State and Purdue universities. The study also found, “If prices remain unchanged and conventional eggs are removed from the market, the share of consumers choosing not to buy eggs will increase by 20 percentage points.” This is now the Washington egg market, where the only option is the expensive, cage-free option. We should expect low-income families to reduce or eliminate their egg purchases. By prioritizing the humane treatment of animals above the nutritional needs of low-income Washingtonians, lawmakers are pushing citizens away from protein-rich eggs that promote brain and eye health toward cheaper, less nutritionally dense grain options (think sugary cereals and other breakfast junk). Washington businesses are also suffering. “In December we were paying like around $40 a case,” said Jose Salgado, owner of  Mariana’s Panaderia and Bakery. “And right after New Years it went up to $60.” Bakeries, restaurants, and other low-margin businesses that rely upon eggs have no choice but to endure the higher costs and try to pass it on to consumers if they can. Regrettably, mandatory cage-free eggs are here to stay. It’s one thing to give consumers options, it’s quite another to eliminate choice through legislation. While well-meaning, these kinds of policies price vulnerable consumers out of the market by replacing an efficient system with an inefficient one. As the great economist Thomas Sowell wrote, “There are no solutions, only trade-offs.” You may need to break a few eggs to make an omelet but the yolk from bad policies can spoil the meal for everyone.

School district budgets can be a maze of numbers and jargon that most citizens cannot easily understand. Even some lawmakers have difficulty concluding if a school district is spending money properly or has the resources it needs to be successful. For example, Idaho’s largest school district, the West Ada School District, has a budget that is 336 pages long and includes six different funds and 36 different programs. The budget is readily available for citizen review, but transparency doesn't mean much if it is not understandable. It is for these reasons that Mountain States Policy Center introduced the idea of a Public School Transparency Act. And the proposal has overwhelming support. Our recent Idaho Poll showed more than 80% of citizens support the concept. In the Twin Falls area, support reaches nearly 90%. Idaho's top education official has also endorsed the idea. “It’s a positive for our schools if the communities they serve understand how tax dollars are being spent," said Superintendent Debbie Critchfield said. "Let’s face it, school budgets tend to be complex and [the Public School Transparency Act] is a step that helps simplify the way they’re communicated publicly.” This MSPC idea would require all public school districts, both on the first page of their budget and also on the front page of the district’s main website, to clearly report six simple things: Amount of total dollars (all funds – local, state and federal) spent by the district that year Amount of total dollars spent per student, per year Amount & percentage of total dollars allocated to average classroom Average administrator salary & benefits Average teacher salary & benefits Ratio of administrators to teachers to students Very little extra work would be needed to provide this data and make it assessable on paper and online. Most districts already have it hidden somewhere in their budget documents. They know where to look, whereas parents and taxpayers can get lost. Parents and taxpayers may see this data and conclude their school districts need more resources. Others may see it and believe that not enough is being done to spend money in the classroom. Regardless, the community will have a broader sense of the results being achieved, and what – if any – changes need to be made.