The Washington Legislature will hold a public hearing on February 27 on a ballot measure signed by 448,158 voters to ban a state or local income tax. This number of signatures far exceeded the 324,516 that were required. Initiative 2111 “would prohibit the state, counties, cities, and other local jurisdictions from imposing or collecting income taxes, defined as having the same meaning as ‘gross income’ in the Internal Revenue Code.” According to the Washington Policy Center (WPC), at least 28 local governments in Washington have already acted to adopt an income tax ban. WPC also reports that the state used to advertise no income tax as being a competitive advantage for Washington: “Washington’s Department of Commerce has also long advertised no income tax as being a competitive advantage for the state. In fact, before the legislature adopted the obviously unconstitutional capital gains income tax last year, Commerce included this slide in its marketing material.” Of course, Washington state now imposes a capital gains income tax after it was upheld in a surprising 7-2 state supreme court ruling last year. The fact that Washington now imposes an income tax on capital gains is reflected in the most recent state income tax map by the Tax Foundation. Repealing that new capital gains income tax is the subject of another ballot measure (I-2109) that voters will consider this November. Unlike the planned action on I-2111, members of the legislative majority are refusing to hold public hearings on the proposal to repeal the capital gains income tax despite the state constitution saying that ballot measures submitted to the legislature “shall take precedence over all other measures in the legislature except appropriation bills and shall be either enacted or rejected without change or amendment by the legislature before the end of such regular session.” According to Washington’s Secretary of State, voters have overwhelmingly rejected an income tax the last 10 straight times it was on the ballot. Those wishing to provide comments concerning I-2111 for the February 27 public hearing can submit written comments here or register for in-person/remote testimony here.

Is the cost of college still worth the price? According to the Education Data Initiative, the average student loan debt in the United States currently totals $37,338. The average student borrows more than $30,000 to pursue a bachelor’s degree. And more than 45 million Americans have student loan debt. High school students considering whether it is worth it to pursue a college degree usually consider two major questions: how much debt will I incur, and how much will I make when I finally achieve graduation and a career? Unfortunately, it can be very difficult to easily find the answers, which can result in students taking out large college loans for careers that might not provide the adequate salary to pay down the loans. Many colleges and universities have been criticized for offering classes and degrees that put students little in the way of career benefit. At the University of Houston, you can obtain a degree in foresight – or the ability to predict the future. A Georgetown, you can take classes called “Philosophy and Star Trek.” A recent survey by the Wall Street Journal found that 56% of Americans believe a four-year college degree isn’t worth the cost. Depending on the career choice, they may be right. Attendance at universities throughout the region and nation show precipitous declines. Between 1963 and 2021, cost of attendance at a four-year college rose 165%. Increases can be found in both public institutions, where the average cost is now $19,374, and private, where students can now pay $45,920. Interestingly, private, for profit colleges have been successful in lowering their costs, from a peak of $31,709 in 2004, to $27,470 today. It is not a given that the cost of college must increase, however. Consider the example being set by Purdue University. Purdue University has kept its tuition frozen for 13 years – at less than $10,000 per year. Former Indiana Governor Mitch Daniels – who became President of Purdue – says it has been a top priority to keep the number affordable for families. As a result, student loan borrowing at Purdue has decreased by 40% since 2012. Now, 11 graduating classes at Purdue have never experienced a tuition increase. Daniels says the key has been an effort to manage expenses, and asking alumni for more contributions. But as Purdue has kept tuition frozen, student enrollment has increased, allowing the university to more easily balance its books. While we are hopeful that other higher education officials can learn from the Purdue example by adopting policies that make tuition more affordable, policymakers can also help provide data that informs a student’s decision on which colleges to attend and degrees to pursue. One option to make the decision easier is a concept Mountain States Policy Center is calling a Career Transparency Act or CTA. The CTA would require the state to make a variety of statistics and information publicly available to high school students considering a college path. The information would include: A listing of the state’s future workforce needs; Starting wage information and education requirements for the top 25 high demand jobs in the state; A listing of the 40 baccalaureate degree programs with the highest average annual wages following graduation; A listing of the 20 associate degree programs with the highest average annual wages following graduation; The cost of obtaining the degree or certificate at state institutions of higher education, including; Tuition and fees Room and board Books and supplies Transportation Other costs The median wage earned by students who graduated with the certificate or degree; The median student debt of those who graduated with the certificate or degree; Progress on repaying student loans by those who graduated with the certificate or degree; and The percentage of students who withdraw from the institution and do not enroll in the program at another higher education institution. With this information readily available, students could better understand whether the long-term career benefit would be worth such a large financial burden. Policymakers may not be able to control all college costs, but they can help inform better career and financial decisions by students considering higher ed. Identifying workforce needs, a listing of wages, clear information about the cost of obtaining a degree, and more should all be made readily available via a Career Transparency Act.

Receiving a refund for overpaid taxes is good. Having those government checks include political messaging, however, is not. For example, here is language that was previously included on some Idaho taxpayer refund checks: While this is a worthwhile project, including this type of unrelated language on a taxpayer refund check is an example of the government unduly tipping the scales and should be avoided. Including political messaging on taxpayer refund/settlement checks is also an issue in Washington state. As reported by Center Square back in January: “Last month, the AGO sent out $40 million worth of checks in the amounts of $50 and $120 to state residents considered ‘low-income’ derived from a lawsuit settlement against chicken and tune companies that had engaged in price-fixing. However, many of the checks ended up mailed to residents who are not low-income, wrongly addressed, or to people who are deceased. Yet, the biggest complaint among critics of the checks, which were signed by Ferguson and included a personal message touting his office’s successes, is that it was an inappropriate use of public money at a time when he is actively campaigning to be Washington's next governor.” The 2024 supplemental budgets introduced this week in Washington state include another example of this practice. According to the Washington Policy Center: “If House and Senate budget writers get their way, some Washington residents will receive $200 checks this year using revenue from the tax on CO2 emissions – but there are some interesting conditions. The Senate proposal requires checks be sent in 2024. The House version cancels some payments if voters support Initiative 2117 and repeal the tax on CO2 this fall. Both budgets require utilities and organizations that send the payments to use government-approved language when they are delivered. These restrictions clearly have an eye on this November as voters decide whether to pass Initiative 2117 which would repeal the state’s climate policy known as the Climate Commitment Act . . . Both budgets stipulate that when sending checks to customers, utilities must 'adhere to program communications guidelines provided by the department’ of Commerce. Those guidelines have not yet been developed but are reminiscent of last year’s decision by the members of the Utilities Commission (and suggested by the Office of the Attorney General) to prohibit utilities from listing the cost of the of the CO2 tax on customer bills. When checks go out, some legislators want to make sure the message accompanying those checks is approved by the Inslee Administration.” Government officials should be commended for prioritizing tax refund checks when taxpayers overpay. The practice of including political messaging on refund checks, however, should be discontinued. Let the checks speak for themselves without turning them into a government-funded political advertisement.

State agencies exercise immense power. They can discipline, fine, and even recommend criminal penalties for alleged rule violations. Agencies frequently use experts to interpret and implement statutes, effectively extending themselves the same power and authority in the rule-making process as judges and legislators. They not only make the rules, but also investigate and adjudicate violations with an administrative law judge employed by the agency. In other words, unelected administrators are empowered to be “lawmaker, sheriff, judge, and jury,” as Goldwater Institute Vice President Jon Riches wrote. It's the old, “We have investigated ourselves and found no wrongdoing,” gambit. As of April 2020, in all but 14 states, if an alleged rule violation makes it past the administrative judge to an actual court, that court is required to defer to the agency interpretation unless it is plainly erroneous. This is an unusual position for courts to be required to take. Courts adjudicate disputes all the time without putting their thumb on the scales of justice. Agency disputes appear to be the only time courts throw up their hands and defer to one party’s interpretation of a statute. Idaho proposes “de novo” review of agency rule disputes In Idaho, HB 562 would prohibit judicial deference by amending the state’s Administrative Procedures Act (APA). Idaho’s APA already has language directing that an Idaho court “shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact,” but the proposed amendment goes much further. From HB 562: “When interpreting the provisions of this chapter or any rule, as defined in [the APA], Idaho Code, the court shall not defer to an agency's interpretation of the provisions of this chapter or the rule and shall interpret the meaning and effect de novo. In an action brought by or against an agency, after applying all customary tools of interpretation, the court shall exercise any remaining doubt in favor of a reasonable interpretation that limits agency power and maximizes individual liberty.” If passed, the new standard would require courts to interpret agency rules de novo, meaning without consideration for the agency’s position, judgment, or interpretation of the statute from which the rule was derived. Without such direction, courts will defer to an agency’s interpretation of ambiguous statutes. The U.S. Supreme Court, for example, has deferred to agency interpretation for nearly four decades in the wake of Chevron v. Natural Resources Defense Council. However, the Court heard oral argument last month challenging that deference doctrine and a majority appears poised to abandon it. Since 2020, several states have curtailed or ended judicial deference to agency interpretations of ambiguous statutes, including Ohio, Tennessee, Colorado, Mississippi, Georgia, and Arkansas, either through state supreme court decisions or legislative action. Under de novo review, a court may still land on an agency’s interpretation of a statute, it simply means they are not required to preload the justice scales in favor of that outcome. Agency deference undermines the court’s rule to decide what a statute says and what it means—instead handing that duty over to the agency. Wyoming puts federal government on notice Meanwhile, shots were fired in Wyoming (not literally), where the Legislature has had it with federal rulemaking that does not “respect the custom and culture of Wyoming.” In a House Joint Resolution, Wyoming legislators urge support for meaningful local input in drafting and developing proposed federal rules and “commit to oppose….proposed federal rules, resource management plans and environmental impact statements that negatively affect…Wyoming’s agriculture, energy, mineral and recreation industries…” The resolution takes specific aim at the actions of the Federal Bureau of Land Management and the U.S. Department of Agriculture. These are positive developments for the mountain states, where legislators are signaling their intent and desire to stop agency end-runs around the legislative process. Administrative agencies need to be kept in check. Elected legislators are just the folks to do it.

The Idaho House now has a bill that would require manufacturers of smartphones and tablets to enable content filters for children. SB 1253 passed the Idaho Senate last week. While well-meaning, the legislation could lead the state into the middle of a lawsuit. This is because, while the goal is to block young people from consuming inappropriate content, the technology could end up closing off a lot of protected speech, too, and affect the way adults can use the internet. Censorship regimes like this were attempted before at the federal level in 1996 and struck down by the Supreme Court as unconstitutional. There is no reason to believe that this time would be any different. Last year, conservative states like Tennessee considered similar proposals and rejected them. Ensuring our children are safe online is of critical importance. No sane person denies this. But an important question for every American to ask themselves is: have I made my child safer by weakening their constitutional rights and empowering the government to be my co-parent? The answer is clearly not. We can easily institute campaigns to raise parent awareness of online services currently available to protect their children. Studies have shown there is "little consistent evidence that filtering is effective at shielding young people from online sexual material." As researchers at the R Street Institute have pointed out: "A related perverse incentive is that having these device-level content filters enabled by default may cause parents to become complacent, believing that their smart devices are sufficiently safe for their kids to use. However, not only are the filters themselves imperfect but they are also easily circumvented by tech-savvy teens." It should be noted that filters, blockers, and screen time monitors already exist and don’t come with draconian government mandates. We can even follow other states like Florida in implementing digital literacy and safety into school curricula. Tech companies have introduced various ideas to help with the effort as well. To improve outcomes and protect Idaho's youth online, we must find effective solutions through collaborative hard work and ideas that can advance safety, not just legislation that could force a lawsuit. It is also critically important to recognize the complexity of having 50 different state solutions to a problem that exists on a national scale. Rather than putting government at the center of child-rearing, we need family-focused policies that equip children with opt-in safety tools, free from coercion. Though this is challenging work, it is worthwhile to craft thoughtful policies that actually achieve our shared goals.

Voting is one of the most important responsibilities and rights we have as citizens. It can be difficult at times, however, to find the needed information about those running for office who want to represent us. This is why several states authorize their Secretary of State to provide a statewide voters’ guide to help provide these important details. Idaho’s Secretary of State Phil McGrane is hoping that Senate Bill 1273 will soon provide his office with this authority. According to the Statement of Purpose for S1273: “This legislation requires the Secretary of State’s Office to prepare a comprehensive voters’ guide for primary and general elections, to be distributed to every household in Idaho. Currently, the Secretary of State’s Office produces and distributes a voters’ pamphlet when a ballot contains a constitutional amendment pursuant to Idaho Code Section 67-453, or an initiative or referendum measure pursuant to Idaho Code Section 34-1812C. This legislation expands this resource by also including information about candidates for federal, state and county offices and other election information, including voter registration and voting requirements, important dates, and county clerk contact information.” Here are the details about candidates that are required to be included in a voters’ guide by S1273: "A statement not exceeding two hundred (200) words; The candidate's campaign contact information; and The candidate's photograph, which shall not be more than four (4) years old and shall be in a format the secretary of state determines suitable for reproduction in the guide." The National Association of Secretaries of States (NASS) says that several states currently provide a voters’ guide including Alabama, Alaska, California, Florida, Oregon, and Washington. Here is how the Alaska Secretary of State explains this resource: “During a Primary and General election year the Division of Elections publishes two official pamphlets designed to help Alaskan voters make informed choices. Pamphlets are available in printed, digital, and audio formats; and made available to the public no later than 22 days prior to Election Day. Printed versions are mailed to every voter household and digital versions are posted to this page. Digital versions of the pamphlets are also available in select languages.” A recent Boise State University poll found strong public support for Idaho to provide a voters’ guide. Along with a traditional printed and online voters’ guide, another resource worth considering is a Video Voters’ Guide. This would allow voters to go to one place to see and hear candidates in their own words about why they are running for office. Here are examples from Washington state of the Video Voter’s Guide provided by TVW. Perhaps this type of resource is something that Idaho Reports would be interested in doing. A voters’ guide usually provides basic demographic and background information about candidates, generally in their own words, to help voters have a standardized reference for learning more about those seeking office. Providing a statewide voter guide is not only popular with Idahoans but is also a best practice that all states should consider to help provide voters with the information they need to make informed decisions about those wishing to represent them. Updated at 10 a.m. MST (2/15) MSPC received this quote from Secretary McGrane on S1273: “With a historic election on the horizon, it is imperative that Idaho voters have the necessary tools to make informed choices. It is time for Idaho to produce a comprehensive state voter guide that includes information on candidates. In an era where voters often know their choice for president but remain uncertain about down-ballot races and issues, a state voter guide becomes a crucial tool in fostering an informed electorate.”

The state of Idaho has followed a national trend in increasing the amount of state funding going to K-12 public schools. In fact, over the past decade, Idaho has nearly doubled the amount it spends on K-12 education. Other states have followed the same path, dramatically increasing funding to the point where the public education budget makes up at least half of the overall state general fund budget. Are students receiving a better education for these increases? Is there any correlation between spending more and outcomes? Unfortunately, in most states, the answer is no. Last year, we wrote this column calling on policymakers to answer several questions before increasing education funding: what amount of spending, per student, will be sufficient and how will we know when we are spending enough? In other words, what is our goal and what are we trying to achieve? At the beginning of the latest legislative sessions, we recommended lawmakers require benchmarks and student results for increased education funding. Now, they will have that opportunity. House Bill 557 phases in outcomes-based funding in Idaho. This means that schools and school districts will have an incentive to meet targets in student achievement, including math proficiency and growth in grades 5-8, as well as attainment of credentials for high school students necessary to transition to the workforce for postsecondary education. It won’t just be about student attendance or enrollment. Starting in 2025, the amount of state funding specified for outcomes-based funding will include up to 10% of discretionary funding. And the total will increase 10% each year through 2028. The legislation also calls for the legislature to review the program every five years. In the end, outcomes-based funding encourages districts to focus on student performance, and not just enrollment. In the effort to improve the student outcomes, it is a policy worth pursuing.

Every U.S. state except for Vermont has a requirement to pass a balanced budget. This important fiscal requirement is essential to maintaining fiscal health and a strong economic outlook. Unfortunately, there is no requirement for Congress to adopt a balanced budget. As a result, it is no surprise that the nation’s fiscal outlook is teetering on the brink. According to the Congressional Budget Office: “Federal debt held by the public increases each year in CBO’s projections, swelling to an all-time record of 116 percent of GDP in 2034. In the two decades that follow, growing deficits cause debt to soar to 172 percent of GDP by 2054.” With Congress unwilling to take the necessary steps to budget responsibly, several states are now exercising their rights under the U.S. Constitution to initiate a process to put forward constitutional amendments to require federal fiscal discipline. In fact, several Senate Concurrent Resolutions have been recently proposed in Idaho: SCR 112: “This concurrent resolution is an application to Congress, under the provisions of Article V of the Constitution of the United States, calling for a convention of the states, the purpose of which is to propose amendments to the Constitution of the United States that would be limited to: (1) imposing fiscal restraints on the federal government; (2) limiting the power and jurisdiction of the federal government; and (3) limiting the terms in office for its officials and for members of Congress. Currently, identical applications have been sent to Congress by other state legislatures.” SCR 115: “This Concurrent Resolution recognizes the growing national debt as a legitimate threat to the United States of America and calls upon the United States Congress to send to the states for ratification, a Balanced Budget Amendment to the United States Constitution. In the absence of such action, after a date certain, the Idaho Legislature files application for an Article V Convention for the sole purpose of proposing a Balanced Budget Amendment to the States for Ratification.” Lawmakers in Wyoming have also introduced resolutions this year calling for a convention of the states (See HJ0006 and SJ0004). Some have expressed concern that a convention of the states could lead to a runaway process that drastically alters the current U.S. Constitution. One important thing to keep in mind about this fear, any amendments advanced by this process would still have to be ratified by 3/4 of the states. It is doubtful that anything without broad public support would be enacted by 38 states with this safeguard. It is clear that Congress is not capable of enacting the reforms needed to change the course of runaway federal spending. That duty now falls on the states to secure the nation’s economic outlook for our continued prosperity. Governor Little also discussed this issue in his 2024 State of the State address: “I am signing on as a member of the Governors Debt Council for a Balanced Budget Amendment to the U.S. Constitution. The runaway freight train of federal spending has got to stop. It's not right. It's not what the founders envisioned for our great country. The U.S. Constitution gives the states the power to propose a Balanced Budget Amendment, and in the coming weeks I will announce new steps we’ll take to force Congress to live within the people's means.” Addressing different topics, the Idaho Senate also introduced two other interesting concurrent resolutions: SCR 114: “This Concurrent Resolution recognizes that serving in Congress should be a public service, not a career, and joins Idaho's voices to the other states calling for an Article V Convention for the sole purpose of drafting a Congressional Term Limits Amendment to the U.S. Constitution.” SCR 116: “This Concurrent Resolution works to ensure that the Students of Idaho are taught the importance of the history of Western Civilization, the founding principles of our unique form of government, and responsible participation in civic life, within applicable Social Studies, Civics, Government, U.S. History, and Western Civilization courses. Students’ lack of understanding in regard to civic concepts threatens the integrity of our Republic. Our nation must acknowledge its history in order to engage with the present.” Expect to see these proposals receive action on the Senate floor soon.

Washington State Legislators worked through the night Monday to pass a controversial bill that would allow unemployment benefits to be paid to workers who are on strike. HB 1893 passed the Washington State House 53-44.  It is notable that there was bipartisan opposition to the idea. This legislation – which would permit unemployment benefits for striking workers – provides all the wrong incentives to get employees back on the job as quickly as possible. And, because businesses pay unemployment taxes, they would be financially supplementing work stoppages of their own employees. According to Cornell University, Washington already ranks in the top five in the states that are home to the most strikes each year. This proposed law likely only increases the number of work stoppages in the future. California lawmakers passed similar legislation last year, only to see the measure vetoed by Governor Gavin Newsom over cost concerns.

Wyoming lawmakers have introduced a new bill that would bring additional education choice options to the Cowboy State. HB 0166 is a measure that would create Education Savings Accounts. It has been introduced by two members of the Senate and two members of the House. Education Savings Accounts, or ESA's, are one of the most popular forms of education choice. ESA's give parents the power to use their children's state education dollars for a variety of educational purposes. Education savings account programs create personal accounts that store a child’s state education dollars. With ESAs, parents can use education dollars to pay for school tuition and fees, textbooks, tutoring and special therapies and other approved expenses, so a child’s education is truly customizable. Participating families are able to choose the best education for their children through multiple providers. HB 0166 sets up ESA's in Wyoming based on a student's household size and income: $5,000 available to those at or below 250% of the federal poverty level $3,000 available for those at or below 350% of the federal poverty level $1,000 available for those at or below 400% of the federal poverty level The proposed law allows for the funds to be used on tuition and fees, tutoring, textbooks and curriculum, computer hardware, education software, summer education tuition and fees, and other education items approved by the state. The bill requires the students to receive instruction in reading, writing, math, civics, history, literature and science. It also requires students to take statewide assessments. Legislators would allocate $40 million to the program if approved. Overall, Education Savings Accounts remain the favorite education choice policy of parents.

A new Senate Joint Memorial has been introduced by several lawmakers to oppose breaching the Snake River dams. One of Mountain States Policy Center’s top recommendations for lawmakers this session is to oppose any breaching of the Snake River dams or efforts to reduce operational effectiveness. According to the Statement of Purpose of SJM 103: “This Joint Memorial states that the Idaho Legislature recognizes and supports the international competitiveness, multimodal transportation, and economic development benefits provided by the Port of Lewiston and the Columbia-Snake River System. Idaho has sovereignty of its water resources and benefits from the multiuse system that provides transportation of commodities, fish and wildlife habitat, recreation, hydropower, and irrigation. This Memorial also states that Idaho opposes the removal or breaching of the dams on the Columbia-Snake River System and its tributaries.” The following is from the text of SJM 103: “…the Legislature of the State of Idaho opposes any actions to degrade the functionality, in whole or in part, to remove or breach any dams on the Columbia-Snake River System or its tributaries, or to take water from the state for anadromous fish enhancement efforts. Such actions would inflict on Idaho citizens a loss in economic and trade opportunities, a loss of recharge waters for the state's aquifers, a loss of navigation and transportation, an increase in electrical rates, a shortfall in power generation, a loss of recreational opportunities, and a threatened quality of life.” Last year MSPC teamed up with Idaho’s U.S. Senator Risch to discuss the importance of the Snake River dams to our region. We wrote: “Hydropower is an important source of reliable and clean energy for everyone in the Northwest, especially Idahoans. However, with the recent debate surrounding the Snake River dams concentrated on the benefits for and support in Washington State, we want to emphasize just how significant an effect these dams have on Idaho and why we must continue to protect them. As a U.S. Senator and the leader of an independent free-market research organization, we are unified in our effort to protect the Snake River dams and maintain their economic and environmental benefits for our region. Beyond us, there is strong, widespread support for the dams, including from Idaho officials and trade groups.” Continuing the theme of support for baseload power sources, another Senate Concurrent Resolution was also introduced supporting nuclear energy. This is from the Statement of Purpose for SCR 113: “The purpose of this legislation is to state the Idaho Legislature's strong support for the historical, current, and future regional impacts of the Idaho National Laboratory. In addition, the legislature recognizes the newly formed Idaho Advanced Energy Consortium and its potential contributions to clean energy innovation and regional economic development.” SJM 103 and SCR 113 are currently waiting to be scheduled for public hearings. Additional Information Idaho supports the vital economic and environmental importance of the Snake River dams Arctic blast flashes warning signal for regional grid stability and reliance on intermittent power sources

Mountain States Policy Center – the region’s largest free market think tank – has announced that former presidential candidate and South Carolina Senator Tim Scott will join former Congressman Trey Gowdy at its Fall Dinner and Anniversary Gala in Boise this fall. “The chance to bring both Senator Scott and Congressman Gowdy to our state capital just weeks before our national election is an opportunity of a lifetime,” said Chris Cargill, MSPC’s President. “We know their message of unity and patriotism will be well-received.” MSPC’s 2024 Fall Dinner and Anniversary Gala will take place Friday, October 4th at 7:00pm at Boise Centre. It is open to all who register at mountainstatespolicy.org. Senator Tim Scott has served the people of South Carolina as U.S. Senator since 2013. He is the leading Republican on the Banking Committee and serves on the Senate Foreign Relations committee. He was one of the lead authors of the Tax Cuts and Jobs Act and helped advance opportunity zones during his time in Congress. Trey Gowdy is a former federal prosecutor and member of Congress from South Carolina. He currently hosts a television program Sunday evenings on Fox News Channel. Both Scott and Gowdy are authors. Sen. Scott’s recent publication America, a Redemption Story and Gowdy’s Start, Stay or Leave: The Art of Decision Making will be available at the event for attendees to obtain signed copies. Mountain States Policy Center’s Spring and Fall Dinners are the largest policy events of their kind in the region, helping raise money to advance free market solutions in Idaho and beyond. Tickets are currently available at mountainstatespolicy.org. MSPC is a non-profit, non-partisan research center that provides free market solutions to successfully grow the region. It concentrates its work in Idaho, Eastern Washington, Montana and Wyoming – one of the first organizations of its kind to cover multiple states. Our 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.

Mountain States Policy Center President Chris Cargill had the opportunity to sit down with Brian Holmes of KTVB to talk about our recommendations to improve public participation in the legislative process. We are encouraging the following changes: Provide a 3-day notice for all public hearings and agendas (automatically emailed to those subscribed to legislative updates); Utilize a master email listserv subscription for all committee updates; Subscription notifications do not expire after the session; Post all bill amendments in advance for committees and floor action; and Post the room number on the legislative website where lawmaker offices are located at the capitol building. Here is our interview yesterday with KTVB - "The 208: Current notice for public testimony on too tight of a timeline?" 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. This notice is needed even for those participating with remote testimony. Whether we are entrepreneurs, parents, students, members of a trade group, or even a lawmaker, it is important to have meaningful public notice of when a bill is going to be available for a public hearing and what the actual text of that proposal is. Only then can we rearrange our schedules, review, and prepare to provide the testimony lawmakers need to help advance good policy for the state. Additional Information Idaho lawmakers should provide at least 3-day notice of bills scheduled for public hearing Yesterday, today and tomorrow: Quick action on fentanyl bill highlights need for reform Lawmaking in Idaho – How the Gem State’s Legislative Process Works

A major new tax relief and school facilities funding bill has been proposed by the chairmen of Idaho’s tax committees, Rep. Monks and Sen Ricks, along with Speaker Moyle. HB 521 is in response to Governor Little’s request to provide $2 billion to address the condition of school facilities in the state. Along with providing additional funding and accountability mechanisms for the school facilities funding, HB 521 would also 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 the bill 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. Here is the intent section for HB 521: “SECTION 1. LEGISLATIVE FINDINGS AND INTENT. (1) The Legislature finds that the burden of taxation on the people of Idaho is too great. (2) The Legislature further finds that the primary drivers of this burden are the need for school districts to resort to property taxes to pay for the construction and repair of school facilities and an income tax rate that is in the second highest quintile among states. (3) Therefore, it is the intent of the Legislature to amend state law to provide income tax relief and reduce the need for and likelihood of school districts resorting to property taxes to meet their school facility needs, including by restricting opportunities to increase school property taxes and directing additional state tax revenues to school facilities, while ensuring accountability for the same.” This is from the statement of purpose for SB 521: “This legislation provides the largest state investment in school facilities through three main avenues. First, it dedicates $125 million in ongoing sales tax revenue to the new School Modernization Facilities Fund for bonding, while providing the legislature with expanded options to cover annual service on the bonds in the event of economic downturns. Second, this legislation increases the funding to the School District Facility Fund in two ways. It increases the sales tax revenue directed to the fund from 2.25% to 3.25% which is projected to be $25 million in FY 2025, and redirects existing lottery dividends to the fund, which is projected to be approximately $50 million in FY 2025. This fund will help school districts with paying down school bonds, levies, and plant facility levies, with any remaining funds being used at the district level for additional school facility projects. Third, this legislation reduces income taxes from 5.8% to 5.695%, allowing Idahoans to have more money to better support local bonds and levies related to school facilities. Additional changes and technical edits are made to related Code provisions. Combined, this bill provides unprecedented state support for school facility improvements in every school district in the state while ensuring appropriate accountability.” As for the school facilities funding parts of the proposal, Section 4 (2)(D) of the bill states: “Any moneys that remain following the payments provided in paragraphs (a) through (c) of this subsection may be: used for construction of a new school facility, renovation, or maintenance needs; used to secure and make payments on a new school facilities bond; or saved in a reserve account by the school district for future school facility needs. Uses of funds shall include regular and routine facilities maintenance, including preventive maintenance, building repairs, and building security, and periodic major facilities projects that involve planning, design, construction, renovation, retrofitting, and replacing of buildings and building systems, components, and features, as well as site acquisition, site improvements, and new construction.” Sections 18 and 19 of the bill specify the criteria necessary for a school to be eligible to access the new funding and the approved uses. In addition, Section 19 (4) says: “A model school facility council shall be created by July 1, 2024, to research, adopt, and recommend a model school facility plan that schools shall abide by when using school modernization facilities fund moneys…” According to Idaho Reports: "Additionally, the bill would remove the August election date on which schools can currently run bonds and levies. That would leave just the primary and general elections for school funding measures after HB 292 eliminated the March election date last year." SB 521 is currently waiting to be scheduled for a public hearing. UPDATED (2/9/24) Governor Little issued the following statement today on SB 521: “I am so grateful to my partners in the Legislature for supporting improved school facilities across our great state while delivering EVEN MORE tax relief for the hardworking families and businesses of Idaho! We all agree Idaho students deserve to learn in a productive, safe environment, and the broad list of supporters for our bill is growing daily. This top priority bill proposes the largest investment ever in school facilities and lowers income taxes even further. It also has the added benefit of long term property tax relief because the state is footing the bill for many improvements local property owners would otherwise cover. Thank you, Idaho Legislature, for putting kids and families first!”

Legislative approval of agency rule-making is constitutional, even when it temporarily leaves an agency without rules. The Idaho Supreme Court unanimously found that rule-making authority in Idaho is delegated to agencies by the Legislature, regardless of whether that agency falls under the executive or legislative government organization chart. “Because rulemaking authority is derived from the legislative delegation of authority, the legislature is free to modify the process by which administrative rules are enacted, i.e., the legislature is free to condition its delegation of rulemaking authority by requiring agencies to follow the processes outlined in the [Idaho Administrative Procedure Act],” the court wrote. Case Background The State Athletic Commission sued the Office of Administrative Rules Coordinator because a new law passed in 2023 (HB 206) made its rules unenforceable after the House State Affairs Committee ran out of time to set a hearing for the Commission’s proposed rules. Without legislative pre-approval as required by the law, the Office of Administrative Rules Coordinator could not publish them.  The State Athletic Commission argued that the situation left them with no legally enforceable rules, even though the law provides a process for the agency to adopt “temporary rules” through the governor until the Legislature can approve them. In fact, as the Supreme Court ruling points out, Governor Little has authorized such temporary rules in 2019, 2020, 2021, and 2022 after the Legislature failed to approve final rules contained in the Idaho Administrative Code. Instead of requesting that the governor authorize temporary rules, the Athletic Commission filed a lawsuit to bring the constitutional question before the court. The State Athletic Commission falls under the state’s executive branch and is granted rule-making authority under Idaho Code. Governor Little previously conveyed concerns about HB 206, which went into effect without his signature. “Conditioning the enforceability of rules on legislative action runs afoul of constitutional separation of powers and threatens to undermine the negotiated rule making process,” Gov. Little wrote. The Idaho Supreme Court disagreed. Although the Idaho Legislature was not a party to the lawsuit, it was granted leave to intervene since the complaint claimed that the Legislature exceeded its authority by breaching the constitutional separation of powers between the legislative and executive branches. The Court would have been deprived of true adversarial argument had the Legislature remained uninvolved. Among other things, the Commission raised the narrow question of whether Idaho’s Constitution permits the Legislature to review both final and pending agency rules, citing several states where legislative preapproval of administrative rules is unconstitutional. Unlike Idaho, in many states administrative rule-making is considered an executive function. Although the Idaho Court sympathized with the Athletic Commission’s predicament, it held that such “out-of-state cases Petitioners rely on are based on jurisprudence that is directly at odds with the constitutional principles” already propounded by the Court.  In summary, “the plain language of Article III, section 29 is unambiguous and permits the legislature to review both final and pending rules.” Here is what Article 3, Section 29 of the Idaho state constitution says: "The legislature may review any administrative rule to ensure it is consistent with the legislative intent of the statute that the rule was written to interpret, prescribe, implement or enforce. After that review, the legislature may approve or reject, in whole or in part, any rule as provided by law. Legislative approval or rejection of a rule is not subject to gubernatorial veto under section 10, article IV, of the constitution of the state of Idaho." Legislative review of agency rules protects citizens and improves democratic accountability Citizens and businesses are subject to severe civil and sometimes criminal penalties for agency administrative rule violations. Agencies have the authority to discipline, fine, and even revoke business and professional licenses based on the rules they write. In some cases, the rules are so cumbersome and the consequences of violation so high, the agencies themselves will not assist citizens and businesses with interpreting their own rules because such assistance would be considered legal advice. Complicated rule-making generates confusion. Agencies will often refuse to help the people they are tasked with regulating to comply with their own rules, instead directing them to hire legal counsel—a tacit admission of what’s at stake in proper compliance. Unlike legislators, which are subject to regular elections and accountable directly to voters for the laws they pass, agency employees have no such accountability, although the rules they pass often carry the same force of law. In addition, agencies are often adversarial to the industries they are tasked with regulating. Seeking to rectify this problem, the Idaho legislature proactively adopted HB 206 in 2023, requiring legislative pre-approval of administrative rules prior to their publication and enforceability. This process ensures that agencies stay within the bounds of their delegated authority and provides oversight to ensure onerous rules that would not pass the legislative process are excluded. The Idaho Legislature is to be credited for its effort to ensure state agencies explain and justify their rules to the people who are accountable to voters. State agencies should not be permitted to behave like ‘mini-legislatures,’ generating hundreds of bureaucratic, industry-specific rules that carry the force of law with no supervision. Legislative oversight of rules may be a burr in the saddle of state agencies, but it’s a necessary and commendable protective mechanism for Idaho citizens.

On Tuesday, February 6, Mountain States Policy Center testified on House Bill 444, which would close a loophole in Idaho to stop home equity theft through gifting. Representative Jeff Ehlers asked me to testify before the local government committee on his bill. The House Local Government Committee then voted unanimously to advance the bill with a "do pass" recommendation. The following is the testimony I presented to the committee (click the image for the video): "Good afternoon everyone. I want to thank Representative Ehlers for asking me to testify on HB 444 an important policy change. I am a Senior Policy Analyst for Mountain States Policy Center. We are a free market, independent think tank based in Idaho. We provide policy research and recommendations based to our region on facts – not emotion. Our mission is to empower the mountain states with free enterprise, individual liberty, and limited government. So what is Home Equity Theft? Imagine a homeowner who is struggling to makes end meets 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. This practice is completely illegal for private lien holders to pursue. Private lien holders are required to foreclose on a property, pay the debts and return surplus property to the property owner. The shocking behavior of governments taking property without compensation has been used in 10 other states and the District of Columbia and nine other states (including Idaho) have access to a more limited scheme. But as of May 2023, Home Equity Theft actions were deemed unconstitutional by a unanimous decision from the United States Supreme Court in Tyler v Hennepin County. Pacific Legal Foundation represented Geraldine Tyler, an elderly woman who had moved to a new living situation and whose tax bills went unpaid. Hennepin County, the local government applied taxes and fees to her property, of $15,000. Sold her home for $40,000 and then kept the remaining $25,000 for their budgets. During the Supreme Court hearing, the defense admitted this principle would apply for a $5,000 debt on a $5 million property, just as easily as it applied to Tyler, giving local governments a windfall. Home Equity Theft violates the Takings Clause of the Fifth Amendment. Chief Justice Roberts stated in the opinion: 'The Takings Clause ‘was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole… A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.' The 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. To learn more of the details we have recently published this study on the Home Equity Theft policies in Idaho, Montana, and Oregon." MSPC is grateful and excited for the opportunity to contribute to the needed policy solutions around ending home equity theft in Idaho.

As with most technological innovations, there are always pluses and minuses to account for. The same is true with Artificial Intelligence (AI) when it comes to our election process. On the one hand, several states are experiencing efficiency gains by using AI to help with signature verification on ballots and petitions. On the other hand, states are currently ill-equipped to deal with the problems caused by “deep fakes” in election advertisements. First, let's look at the potential beneficial use of AI in our electoral process. The United States uses various methods for absentee/mail voter verification. The most common approach is signature verification, where voters sign an affidavit on the ballot envelope, and election officials compare it with the signature on file in the voter registration record. As AI has gained unprecedented momentum, certain states have explored alternative methods for more digital and automated verification processes in the context of absentee/mail voting. Signature verification is conducted in 31 states, including Idaho, Washington, and Montana. According to the National Conference of State Legislatures: “Unlike the traditional experience of voting at a physical polling place under the supervision of election officials or volunteer election workers, marking an absentee/mail ballot occurs in an unsupervised environment, usually at the voter’s home. Because the voter does not appear in person, election officials use other ways of verifying that the absentee/mail ballot they receive does come from the intended eligible voter.” Advocates stress the importance of implementing robust measures to ensure the legitimacy of votes, including support for voter identification requirements. Security concerns regarding mail-in voting are commonly voiced, focusing on potentially fraudulent activities such as ballot harvesting or interception. Calls for enhanced security protocols and verification measures are common in discussions around mail-in voting. Instead of relying solely on traditional manual methods like signature verification, several states are leveraging AI to enhance the accuracy and efficiency of the verification process. The incorporation of AI in voter verification aims to streamline and expedite the authentication of absentee/mail ballots. This may involve the development of AI algorithms capable of analyzing signatures or other identifying features with a high degree of precision. Automated systems can quickly compare and match signatures, reducing the reliance on manual labor and potentially expediting the election process. The move towards more digital, AI-driven verification is likely driven by a desire to leverage technological advancements to enhance the security and integrity of the voting process. However, the specific details of how each state implements and integrates AI into its verification processes may vary, reflecting the diverse approaches taken by different jurisdictions to modernize and secure their electoral systems. As of 2020, at least 29 counties in eight states – California, Colorado, Florida, Hawaii, Oregon, Nevada, Utah, and Washington – use AI systems to enforce signature matching rules on absentee/mail-in ballots. While this is an intriguing development, if a state is going to use AI for signature verification there should be a requirement for human eyes to review any flagged ballots. Now for the problem of AI and “deep fakes” in election advertising. States across the country including Idaho, Wyoming, and Washington are beginning to address a major concern for a modern-day form of piracy; deep fakes. The proposed legislation in Idaho (HB 391) and surrounding states aims to address the growing threat of artificial intelligence-generated deep fakes in electioneering. The bill, introduced with bipartisan support, allows political candidates to seek legal remedies if their recorded speech, photos, or videos are manipulated using AI or digital technology to create a false narrative that differs significantly from reality. Candidates can pursue injunctive relief to prevent the publication of such materials and seek damages. As illustrated by the signature verification efforts and the fight against deep fakes in political advertisements, AI is neither good nor bad but is a tool that can be used for great benefit or harm. It is important to keep strong human oversight of its use in our election system.

I was recently invited to speak at the City Club in Boise on education policy and the ideas being discussed in the current Idaho legislative session. Realizing the education establishment would be well represented in the crowd, I knew I was heading into a somewhat hostile setting. But Mountain States Policy Center believes in going anywhere at any time to provide a free market perspective. We’re happy to have civil conversations and debate the merit of ideas. We may disagree, but we’ll do so respectfully. As you might expect, the ideas I presented on education innovations received a frosty reception. I discussed my own family’s situation, as well as the challenges so many other families face when they are limited to a school environment that might not provide the opportunities needed to succeed. I presented the written documentation and a collection of more than 180 studies that show education choice can provide great impact while helping children succeed. I made clear that education choice means an all of the above approach – traditional public schools, charter schools, magnet schools, micro schools, homeschooling and more. And I asked attendees to think differently about how we achieve success for every child – that we needed to support reforms and an approach unique to Idaho that respects the role of public schools but also adds more choice for families who need it. To top things off, I talked about making it easier for parents to compare school district budgets with a Public School Transparency Act. By the end of the forum, the frost had turned to a deep freeze. The only message that seemed to resonate with most attendees was that public schools just needed more money. As I watched the reactions of the crowd, I could only conclude one thing: those in attendance represented education past, not education future. (Listen to audio of the Boise City Club forum on education here.) It doesn’t have to be this way. Innovative education leaders can be found across the nation. They are all willing to try new things to improve educational outcomes for children. They realize that we cannot treat the smartphone era the same way we did when kids rode horse-drawn buggies to a single room schoolhouse. They understand that it’s about much more than putting more money into the current system. Can we find these leaders in our state? Education opportunity is one of the greatest civil rights issues of our time. The American public gets it. Polling has consistently shown broad support across political parties and demographics. The strongest support comes from minority communities and young people.  According to a Morning Consult poll, 78% of black parents support Education Savings Accounts, while only eight percent oppose. Nearly 90% of black mothers in a recent poll said they don’t believe the traditional approach to public school meets students’ needs. Millennials are being called the “school choice generation.” Beck Research polling found 68% of millennials support education choice – with Latino support reaching 75%. The polling also shows those most opposed to making any changes or offering further choice are predominately older and white, much like the crowd I faced. The former Superintendent of the Madison School District recently called education choice plans nothing more than “yacht vouchers.” Other education leaders in our state have used similarly offensive language. Meantime, parents, young people and minorities are pleading for reforms that can help all children. The future of the country is eager for change, whether the education establishment likes it or not. Those who ignore their plea for innovation and options risk the judgment of history.

Idaho legislators will consider a tax credit this session that would expand the state’s education choice options for families. House Bill 447 was introduced today. The proposal, introduced by Rep. Wendy Horman, Rep. Jason Monks, Sen. Lori Den Hartog, Sen. Scott Grow and Sen. Doug Ricks, would provide a $5,000 refundable tax credit that families could use for education expenses and to cover the cost of tuition at a non-public school. An extra $2,500 would be available for families who have students with special needs. Tax credits or tax credit scholarships are not unusual in the education choice arena. In fact, ten other states offer similar programs. Wild claims are being made about what the program would and would not do. Here’s what’s true and false. Claim: “This is a voucher scheme.” By the very definition, tax credits are not vouchers. Education Savings Accounts are not vouchers. In fact, no one in Idaho has proposed a school voucher. Tax credits are the simplest form of education choice. Essentially, it’s no different than a tax deduction for your mortgage interest or even a child tax credit. In the end, tax credits are given to parents directly and vouchers are given to schools or a specific institution. Claim: “This defunds neighborhood schools.” The tax credit being proposed in the latest bill takes $0 out of the state's public school budget. It is a completely separate line item of $50 million. The public school budget will remain at $2.698 billion. Comparatively speaking, the tax credit equals less than one half of one percent of the state's K-12 allocation. Claim: “This program will grow.” While the bill caps the spending to no more than $50 million, any tax credit can be decreased or increased by a legislature. Experience from some other states indicates that parents support and like having more choice options, and the better designed the program, the more students who will participate. But an increasing number of participants equals success, not failure. Claim: "Most public school students won't sign up." For the vast majority of those who like their public schools, nothing would change. In fact, it is likely that fewer than 5-10% of Idaho children would take advantage of the tax credits. But for those who do, for those who need options other than the traditional public school setting, it could be a game changer. Claim: “There’s no accountability.” The program would be overseen by the State Tax Commission, and would contain the same type of accountability as anyone in the state would face to be truthful on their taxes including possible audits for misuse of funds. The proposed law gives the tax commission the authority to conduct audits of grant recipients to ensure compliance. The tax commission would also have the power to recover funds not used in accordance with the law. Claim: "There are already great education choice options in Idaho." Idaho has a robust public charter school system and open enrollment for traditional public schools. The state also launched the Empowering Parents program. While these are important education choice options, other states are providing additional resources for families. Idaho recently ranked 29th on education choice options behind Utah & Montana and barely ahead of Illinois. Claim: “This will only help the wealthy.” Wealthy parents currently have the privilege of making two types of educational choices. They can either opt to reside in areas with reputable public schools or they can afford to enroll their children in private schools by paying the necessary fees. Consequently, educational choice initiatives are typically tailored to cater to the requirements of disadvantaged students and those from low-income backgrounds. By erecting barriers that prevent low-income families from accessing the highest quality education, we are essentially impeding the advancement of disadvantaged children, which is both unfair and unnecessary. In Indiana, the Choice Scholarship program's average income for participating families last year was $81,817. The average Arizona family taking advantage of the state's Empowerment Scholarship Account is $60,600. Claim: “These programs haven’t helped students in other states.” As of March 2023, there have been nearly 190 empirical studies on the impact of education choice. Researchers have looked at fiscal effects, parent satisfaction, test scores, attainment, civic values, school safety and racial integration. Remarkably, 84% of studies show a positive effect, 10% show no impact, and 6% show a negative result. Studies were completed in red states and blue states, in those rural and urban. We have more information on the impact of education choice than ever before. Claim: "Arizona's program is bankrupting the state." Arizona's program is an Education Savings Account, not a tax credit. The most recent, official estimates from the nonpartisan Arizona Joint Legislative Budget Committee (released January 16, 2024) project total ESA award values of $703 million, not the $950 million claimed by activists. The $703 million includes roughly $250 million specifically allocated to special needs students. Because of the popularity of the program, public schools have seen offsetting savings of $200 million. The Idaho tax credit proposal is capped at $50 million. Claim: "Rural communities will be hurt." It cannot be said that education choice will not help in rural areas because there are few or no alternatives, and then, at the same time, that education choice will destroy the district school system because so many students will leave for alternative options. Since Florida enacted its tax-credit scholarship policy 20 years ago “the number of private schools in Florida’s 30 rural counties has grown from 69 to 120” and “private school enrollment in those counties has more than doubled, from 5,354 rural private school students in the 2001–2002 academic year to 10,965 students in 2021–2022, according to state data.

Idaho’s home equity theft loophole is hopefully approaching an end thanks to House Bill 444. HB 444 is awaiting a hearing in the Local Government Committee and is sponsored by Representative Jeff Ehlers. The bill would amend Idaho Code Section 31-808 to exclude property acquired by tax deed from being gifted to other government entities without compensation to the property owner. Home equity theft is an egregious practice where the government is allowed to foreclose on a property through tax liens, sell the property, and keep all of the equity after the debts are paid. This practice is completely illegal for private lien holders to pursue. Private lien holders are required to foreclose on a property, pay the debts and return surplus property to the property owner. The shocking behavior of governments taking property without compensation has been used in 10 other states and the District of Columbia and nine other states (including Idaho) have access to a more limited scheme. In 2023, Pacific Legal Foundation brought Tyler v. Hennepin County  before the United States Supreme Court. The case involving an elderly woman stemmed from the county taking $25,000 in surplus property after her $15,000 debt was paid. The unanimous ruling issued from the Supreme Court in May was in favor of Tyler with Chief Justice Roberts saying, “The taxpayer must render unto Caesar what is Caesar’s, but no more.” Mountain States Policy Center published a full analysis on home equity theft last month. That report can be found here. States still need to end home equity theft outright within their state codes. For Idaho, HB 444 will close the loophole that exists within the Idaho statute. The current language in the law allows governments to foreclose on a property and gift it to another government entity without compensation to the property owner. Selling the property and keeping the financial gain is already illegal. States across the nation are ending home equity theft in response to the U.S. Supreme Court’s ruling. HB 444 will allow Idaho to come into full compliance with the court’s decision.