It produced some eye-opening numbers that got the attention of media including the Idaho Statesman and KTVB. But a new blog from the Idaho Center for Fiscal Policy on Idaho Senate Bill 1038 should be considered with major caution, even as it appears to predict education choice would be wildly popular. The center claims the cost of the Education Savings Account program in Idaho would be $363.8 million in 2025 and beyond. The author claims 12% of public school students – or 37,850 – would participate, at a cost of $225.2 million. The center further predicts that 75% and 95% of private school and homeschooling participants, respectively, would sign up for a total cost of $133.5 million. In examining these claims, let’s first separate the public school students from the private and homeschooling students. As of 2020-21, the state of Idaho State Department of Education financial summaries show an allocation of roughly $7,500 per student, per year. These are just state funds – local and federal dollars are counted separately. Under the ESA proposal introduced in Senate Bill 1038, 80% of that state per student fund would stay with the student and their family for education, while the remaining 20% would stay with the public school where the child lives. While there is little evidence to suggest 12% of public school students would opt-in to the program, the Idaho Center for Fiscal Policy piece suggests the $225.2 million is new spending. It is not. The state will be spending that cash whether it passes an ESA program or not. That money is already in the “system.” (It’s worth noting the fiscal note of 1038 calls for $45 million in spending for 6,600 students, but those numbers could change depending on the number of public school students who participate.) If ICFP’s claims are true and 12% of current public school students would take advantage, overcrowding in state public schools would dramatically decline and the amount of money the state spends, per student, on K-12 would actually increase, as 20% would stay with the public school. On the private school and homeschooling side, again there is little evidence to show that 75-95% of current private and homeschooling students would sign up for the program. First of all, universal programs like the one proposed in SB 1038 are fairly new. There is no way to accurately determine the number of private and homeschooling students who will take advantage. Second, the state of Idaho does not regulate private or homeschooling, so it is difficult to know the number of students participating. The Idaho State Department of Education estimates private schooling accounts for about 11,700 students in Idaho. The ICFP claims there are more than 15,000. Assuming the Idaho State Department of Education data is correct, ICFP’s projected cost claim (assuming 75% enrollment) is off by millions of dollars – not just a rounding error. Third, it’s worth considering the language in the bill. If the ICFP projections of 22,400 homeschooling and private school students participating is correct, the school districts where those students live would automatically see an increase in state funding. Why? Because 20% of the state allocation of $7,500 stays with the local school district – granting districts another $33 million. But a review across previous state programs finds no evidence of enrollment reaching or even approaching those percentages. Current data from the program in Arizona shows the number of students participating at 47,200 – half from public schools, half from private schools. Arizona’s student population is roughly four times larger than Idaho, yet ICFP claims Idaho’s enrollment in an ESA would reach 60,304 – far exceeding Arizona’s. It's also worth noting that 58% of students in Arizona using choice programs are special needs – an important consideration in predicting how many students may participate in the future. Before Arizona’s expansion, there were six states that offered Education Savings Accounts. The total student population using those accounts was 22,000. The fiscal note for the Arizona legislation assumed 20% participation of homeschoolers in three years. The research in MSPC’s Education Choice Improves Outcomes concluded: "There is no official census of homeschool students. According to U.S. Census Bureau projections, Idaho’s estimated 2022 population is 1,939,033. The estimated school age population (age 5-17) is 362,600. Combined public and private school enrollment is approximately 328,724. The gap between the total school age population and those enrolled in public or private schools is 33,876. According to the 2020 Census Bureau Household Pulse Survey, 10.3% of Idaho families homeschool, but each family may have multiple students. The true number of homeschooling students may be greater or less than these estimates." With the widespread skepticism in the Idaho homeschooling community regarding any government program, it is difficult – if not impossible – to understand the data behind a projection of 95% participation. The ICFP – and the media – have a responsibility to explain the numbers in greater detail. We requested the data from ICFP but have yet to receive any response. The data is not available on their website. Bottom line - if the total number of students participating in the program truly reaches 60,304, it would make Idaho’s ESA the most popular and successful of any state in the nation. And it would also show intense demand by parents looking to improve educational outcomes for all children. It would be something to celebrate, not to fear.

Last fall, the Idaho Legislature lowered the state income tax to a flat rate of 5.8%. This legislative session, Montana is considering lowering its income tax rate below 6.0%. The rate adjustments in Montana and Idaho reflect a national movement to lower state income tax rates to help working families and keep states competitive. The one state that seems to be bucking that trend is Washington, which has adopted a new state income tax starting with capital gains income. Bringing the rates in Idaho and Montana below 6% is a wise move, but there is still room to lower the rate even more. As the Tax Foundation points out today, the majority of states now have lower income tax rates. In the mountain west, Idaho and Montana's income tax rates are the highest. Among states that have cut their income tax rates since 2021, there are only five states that have kept their rates higher than Idaho. It is clear, if Idaho and Montana are going to remain competitive (especially in the west), they need to consider further lowering their income tax rates, which are still relatively high. One pro-growth policy to consider is tying income tax rates to revenue growth. For example, if the state revenue consistently comes in at a rate higher than expected, the tax rate would automatically be lowered. This could negate the need for any special or extraordinary sessions of the legislature to address tax reductions as they would kick in at certain revenue levels. The exact revenue percentage over expectations, the time required to make sure it is consistent, and the corresponding income tax rate reduction would all need to be set by lawmakers. But adopting this type of policy would send a clear message that Idaho and Montana will continue to lower the income tax burden it is placing on families and businesses. And the more the economy booms, the lower the rate. About a dozen states have tax triggers. The Tax Foundation says, “well-designed triggers limit the volatility and unpredictability associated with any change to revenue codes, and can be a valuable tool for states seeking to balance the economic impetus for tax reform with a governmental need for revenue predictability.” Additional Resources: · The race to lower state income tax rates · States inaugurate a flat tax revolution

Today the United States Supreme Court will hear oral arguments in Gonzalez v. Google, a case that could critically undermine free expression on the internet. The question presented in Gonzalez is whether online services like Google may be held liable under Section 230 of the Communications Decency Act of 1996 for recommending relevant third-party content to their users. Mountain States Policy Center and eleven other free market organizations filed an amicus brief in support of Google in this case last month, explaining that Section 230's liability shield is critical to protect the free marketplace of ideas on the internet. If the Court shrinks Section 230’s liability shield for recommending third-party content, online services will face severe financial penalties for hosting speech which challenges mainstream political ideas. Further, exposing online services to liability would mainly hurt small, newer internet platforms, preventing them from competing with the largest companies today. Mountain States Policy Center President Chris Cargill issued the following statement today: “Section 230 is the bedrock of a free and open internet for all Americans and provides the opportunity for individual expression and thought. Removing the law would severely limit the ability for online services of all sizes and functions to host any content that could be deemed inflammatory or dangerous, including something as simple as a negative review expressed on a website. Further, eliminating Section 230 protections would devastate the digital economy, especially startups and small businesses, which rely on algorithms to drive customers to their storefronts. The Court should rule in favor of protecting freedom of expression online by keeping Section 230 intact." ADDITIONAL RESOURCES: Mountain States Policy Center: Why we're joining arguments on a case before the U.S. Supreme Court Mountain States Policy Center Amicus Brief in Gonzalez v. Google

Montana is joining the ever-growing list of states cutting its state income tax rate. The state legislature has given final approval to SB 121, and the measure will be signed by Governor Gianforte. The bill calls for two brackets for income tax rates starting in January of 2024 - 4.7% and 5.9%. Montana's income tax rate was previously as high as 6.75%. Last fall, Idaho lowered its income tax rate to a flat 5.8%. At least 10 other states have reduced or flattened their personal income taxes in 2022, and many more did so in 2021. Idaho’s 5.8% rate and Montana's 5.9%, however, are still relatively high. Montana's neighbor, North Dakota, is also looking at cutting its income tax rate. Policymakers in the Mountain States shouldn't stop now. It is clear, if Idaho and Montana are going to remain competitive (especially in the west), they need to consider further lowering their income tax rates, which are now relatively high. We have previously written about an idea to tie the income tax rate to revenue growth. This pro-growth policy would trigger automatic reductions in the rate so long as excess revenue is consistent. One thing is clear: Idaho and Montana lawmakers shouldn’t be content with state income tax rates near 6.0%. They should continue to look at ways to lower the burden. About a dozen states have tax triggers. The Tax Foundation says, “well-designed triggers limit the volatility and unpredictability associated with any change to revenue codes, and can be a valuable tool for states seeking to balance the economic impetus for tax reform with a governmental need for revenue predictability.”

It's hard to make sense of the strategy in advancing additional education choice options in the Idaho legislature - if there even is one. Senate Bill 1038 - which would have provided universal Education Savings Accounts - was defeated in the Senate on Monday. During that lengthy discussion, many legislators who ultimately voted no said they were in favor of education choice, but thought the bill went too far, too fast. They wanted to see other proposals as well. "It's a journey," Senate Education Chairman Dave Lent said during the floor debate. The journey hit roadblocks in the House on Thursday. We were expecting three new bills to be introduced in the House education committee. But two of the proposals were pulled from the agenda before the meeting - one that would have created a 529 ESA proposal, another that would have expanded the popular Empowering Parents program. We don't know what is going to happen with those proposals going forward. Perhaps we'll learn in the coming days. The third - a very modest, thoughtful proposal by Rep. Lance Clow to create Education Savings Accounts - couldn't even advance from a routing slip to become an actual bill and get a hearing and public comment. "All I am asking for is to give us a chance to have a hearing," Rep. Clow said in his comments. That didn't happen. Some lawmakers suggested they had already heard feedback via emails and phone calls. Others said they were concerned if they voted to introduce the bill, it would be assigned to another committee. The 17 members of the committee seemed to have 17 different opinions. In the discussion, Rep. Jack Nelsen said he wasn't aware of data that showed improvements. We have much of that data posted here. Some legislators (presumably based on numbers released by the Idaho Center for Fiscal Policy) say the program is unaffordable. As we've pointed out here, the study ICFP released last week is filled with major errors and deserves scrutiny. We've asked the ICFP for more information on where they got their data, but they haven't responded. They have a duty to explain how they achieved their numbers - especially if legislators are going to depend on it to make their decision. It's important to note that, under several ideas introduced so far, any prediction of the amount of public school students who would participate will, in reality, cost the state little to nothing. Why? The state will be spending that cash whether it passes an ESA program or not. That money is already in the “system.” Any students in private or homeschool who may take advantage of the program would cost the state funds, but under the several proposals put forward thus far, 20% of their amount goes back to a local public school - whether they attend that school or not. Thus, the amount of spending per student, per year in Idaho public schools would actually increase under these scenarios. Legislators also questioned the accountability of Rep. Clow's proposal, but as he rightly pointed out "if a public school scores are low, we don't take any money away from them." Several legislators made the mistake of calling ESA's "vouchers." As we have previously pointed out, there is a big difference between the two. Where things go from here is unclear. Education choice improves outcomes, and legislators would be wise to continue to work to advance a bill that can get broad support. But it is difficult as of right now to see that happening with so many lawmakers pulling in so many different directions. Additional education choice options have stymied lawmakers in Idaho for several years now. Legislative leaders may want to start thinking about creating a joint legislative panel or work group that can hash out a concrete proposal in the interim, and have it ready to be introduced in the 2024 legislative session. In the meantime, families will continue to wait.

Idaho residents may be coveting Utah’s property tax laws that account for market value increases. Utah exempts 45% of the market value from property taxes. Whereas, Idaho caps their exemption at $125,000 or up to 50% of the assessed market value of the home. The cap was raised from $100,000 to $125,000 in 2021. Five years ago, this was a non-issue as Idaho home values averaged $222,464.25 and the 50% of market value property tax exemption was similar to the cap of $100,000, at $111,232.13. However, the difference between the market value of the homes and the exemption cap quickly increased. In 2022, the difference between the 50% of market value exemption and the cap was $109,114.04. This is an 871% increase in the difference between the two values. Property taxes for an average home in Idaho, in both rural and urban areas, have increased by 65% in the last five years. Rates for 2022 are unavailable. If the assessment rate in 2022 is the same as 2021, then the property tax for Idaho home values will have almost doubled since 2017. Idaho property tax relief can no longer adjust for market changes, unlike neighboring Utah. Utah exempts a lower percentage of the home value from property taxes at 45% versus Idaho’s 50%, but does not cap the exemption. Though even Utah’s property tax program is not without is flaws in implementation, with recent attention paid to unfair reassessment practices at the local level. Very few states have programs that mitigate for market value changes. Only 18 states have caps to the growth in assessed value. These laws mostly follow the 1978 passing of California’s Proposition 13, which limits assessed value growth by 3%. Colorado recently repealed its cap in 2021. Utah is the only state that has an exemption based on market value that is uncapped. Other states such as Louisiana and Minnesota have some relief built into their systems but can’t fluctuate with high market values. However, caps to assessed value growth were common with some of the highest property tax rates per capita. Washington, D.C. is ranked 1st, Connecticut 3rd, New York 5th, Texas 12th, and California 13th for per capita tax rates. Utah is ranked 36th and Idaho is ranked 41st per capita. These numbers were based on tax-rates in 2019, which excludes the run-up in real estate values in Idaho. In the last five years, Idaho was almost double the national average increase of home values at 16%. Idaho residents need a relief option accounting for housing market changes. Leaving assessable values untethered from market price changes allows local government spending to increase too rapidly. Obviously, Idaho’s local governments have excessive access to property tax funds when forgone amounts in 2022 reached $145 million dollars. These are dollars the local governments chose not to tax but had the opportunity to tax within Idaho code. Local governments can have these funds made available to them at later dates. As Idaho’s property tax system remains dependent to market value shifts, it can potentially change this low tax state into a higher tax region. A fair property tax program protects against market run-ups and encourages fiscally conservative practices at the local government level. (Photo Credit: Photo by Tierra Mallorca on Unsplash)

In the sometimes-heated debate over bringing more education choice options to the region, Republicans, Democrats, and some in the media are falling into the trap of labeling Education Savings Accounts “vouchers.” For Republicans, its likely an unconscious slip. For the media, it’s probably a lack of understanding. For Democrats and activists opposed to education choice, it is a strategy. Polling shows “vouchers” are very controversial and don’t have a lot of support. Education Savings Accounts, however, are much more likely to be looked upon favorably. The reality is not many folks – including our lawmakers – could tell you the difference between the two. In fact, some have started to use the term “ESA voucher.” In an Idaho House education committee meeting last week, members of both parties used that term. The trouble is there’s no such thing as an “ESA voucher.” A voucher program would only let parents use taxpayer dollars to pay for tuition at a private school approved by the state. Typically, the state writes a check to a school in the name of a student to cover tuition. An Education Savings Account is much different. First, money is held in an account by the state - it is not given directly to schools. Second, an ESA allows parents to use a portion of state funding on a variety of education services. Yes, it can include private school tuition, but it can also include tutoring, special needs services, curriculum, mental health treatment and much more - so long as it is for an educational purpose. In the end, ESA's are given to parents via a state fund, whereas vouchers are given to schools or a specific institution. Education Savings Accounts are popular with parents. In fact, more than $335 million has been allocated to ESA’s across the country, and several more states including Utah, Iowa, Arkansas and Texas are considering or have already passed ESA’s this year. The language of various education choice bills in Idaho, Montana and Washington calls for ESA’s – not vouchers. No one who supports or opposes education choice or covers the topic should use the term “voucher” unless a voucher bill is introduced. Doing so is simply inaccurate and on such an important topic, the clarity is crucial.

Workers' compensation is defined by the United States Centers for Disease Control as, “systems [that] were established to provide partial medical care and income protection to employees who are injured or become ill from their job.” Workers’ compensation was established to incentivize employers to reduce injury and illness to their employees. While the federal government has established this overarching definition of workers’ compensation and its purpose, each state government is responsible for creating its own system and regulation for workers’ compensation. This has led to some stark differences in the workers’ compensation systems of varying states. Washington and Wyoming, for example, are two of just four states (North Dakota and Ohio are the others) with a monopoly worker’s comp system. This top-down control without any competition has led to increasing rates and questionable customer service. Meanwhile, in Idaho and Montana, employers can choose to purchase their worker’s compensation from the state, from private companies, or can self-insure, leading to declining rates. While there is some debate about which system – private or state-controlled – works best, there is ample research to suggest the private model uses the free market to improve coverage, lower costs and protect workers. READ OUR FULL STUDY HERE >>

The quest for affordability sometimes comes with unexpected costs. Over the last five years, as Idaho became one of the most demanded real estate areas, its property value growth led the nation. Unfortunately, for Idaho taxpayers there is no limit to the growth of property taxes on assessed value. Old and new residents alike are facing higher than expected property taxes, in the state where affordability was once a huge attraction. In the last five years, the average Idaho home value increased by 16.3% with a spike of 34.13% in 2021. A combination of new residents increasing demand and a low supply of houses drove home value upwards. Unfortunately for Idaho residents, the only cap on property taxes is with budget increases. Despite many taxing districts decreasing property tax rates during this time frame, averaging from 1.129% in 2020 to 1.043% in 2021 (urban areas), residential property owners still saw an overall increase. Last year (in 2022), Idaho property owners experienced a 43.7% increase in the value of their assessed property totaling $332.1 billion. In 2021, there had been a 20.2% increase over 2020. These rapid increases have not been seen before in the state of Idaho. Idaho is not the only state in the mountain region that has seen an increase in home values. Over the last five years, Idaho, Montana, Utah, and Washington, were within the top ten states for home value growth. Wyoming ranked 43rd with only 6.79% growth. Even with property value increases, Idaho had the second lowest property tax as a percentage of income in the mountain states at 76.4% of the national average for fiscal year 2020. Nevada was the lowest percentage of income and is able to subsidize lower property tax rates with other tax sources (i.e., casinos). More recent data is still unavailable. Idaho and Utah are similar in their per capita property tax and Washington is only slightly higher. Wyoming is higher than the national average but much of this can be attributed to the state's high assessment of mineral production. The effective tax rate on owner-occupied homes ranks in the lowest of ten states. Montana, without a sales tax, relies heavily on property taxes at a state and local level to fund education and other municipal services. Utah, with similar tax rates and property value escalations as Idaho, does not have the same constituent demands for property tax relief. What is the difference? Utah state code has property tax relief that accounts for market changes. By exempting 45% of the market value of the primary residential property, homeowners are protected from sudden run-ups in market value. Secondary homes are taxed at 100 percent. In contrast, Idaho, recently removed similar protection. From 2006 to 2016, Idaho residents were able to exempt 50% of the market value of their house, but it was capped at the Federal Housing Price Index. Legislators tightened the relief in 2016 by capping the exemption at $100,000. It was later increased to $125,000 in 2020. This cap has quickly diverged from the HPI and Idaho homeowners are suffering the consequences. (Picture Credit: Photo by Towfiqu barbhuiya on Unsplash)

It appears taxpayers in Washington state and the Spokane area are about to get stuck with a bill to renovate Spokane’s Avista Stadium. Spokane County Commissioners are meeting Tuesday to likely approve a deal that would almost guarantee taxpayers cover the vast majority of the total cost of around $22 million. The money will be used to renovate the stadium, per a demand by Major League Baseball if Spokane wants to keep the Indians baseball team. While the Indians say they’ll pay $2 million in construction costs, they want government to cover the rest. They’re asking the Washington state legislature to pitch in, as well as pinning hopes on federal funds. The city of Spokane Valley has also offered $2 million. But no matter where they get it – local, state or federal - the money still belongs to taxpayers. In addition to the $2 million the Indians say they’ll pitch in for construction, the club has offered to pay a rent of about $8,333 per month, or $100,000 per year. At that pace, it would take almost 200 years for taxpayer to recoup the rest of their money. The only way taxpayers get more is via a $1 per ticket revenue sharing agreement on any tickets above an attendance total of 250,000. The Indians have never attracted that many fans. Last season, the team saw about 234,000 attendees, meaning if the revenue sharing agreement had been in place, taxpayers wouldn’t have seen a dime. If attendance hits 250,001, taxpayers get an extra dollar. This doesn’t seem like a very good deal. Assuming the baseball club doesn't pull in any other private funding, taxpayers get stuck with about 91% of the cost. Spokane County Commissioners seem resigned to accepting the deal. But they don’t have to be. Baseball is not a core function of government and shouldn’t be treated as such. Boise faced similar demands several years ago. It didn’t comply, lost its MLB affiliation, but kept baseball with the addition of a Pioneer League team. Baseball didn’t disappear in the City of Trees. Taxpayers didn’t get stuck with a bill.

One of the most disappointing parts of the government's response to the COVID-19 pandemic was the prolonged use of emergency powers by executives across the nation. There is no doubt there was an overreach at both the federal and state levels. In fact, federal emergency powers are still in place, leading The Washington Post to proclaim that presidents gain too much power when emergencies hit. In a real emergency, the executive - both presidents and governors - need broad powers to act fast. Legislative bodies take time to assemble, so they can temporarily transfer their powers to the executive in an emergency. But when problems do last for extended periods, it is the responsibility of the legislatures to debate risks, benefits and trade-offs of various long-term approaches. Lawmakers may end up passing the very policies a governor would prefer, but they do it after deliberation as representatives of the people and do it in a public process. Lawmakers across the region are now introducing legislation to ensure that they have a role in future emergency power proclamations. In Idaho, new Senate Bill 1104 would limit the governor to one 30 day extension of a previous 30 day emergency order. That means after 60 days, the legislature would need to be called back into session and concur that the emergency extension should be approved. This is not unusual. In Wisconsin, for example, a state of emergency cannot exceed 60 days unless it is extended by the Legislature, and in Minnesota, a governor must call a special session if a “peace time” emergency lasts longer than 30 days. The Idaho Legislature has had previous fights with Governor Brad Little over emergency powers. The National Conference of State Legislatures has a great tool to compare and contrast emergency powers in the states. If Idaho lawmakers decide to move forward with SB 1104, they will want to make some changes. Section 2 of the bill references the governor can petition the legislature with "reasonable justification," but does not define what that may be. One lawmaker's idea of reasonable justification may not be another lawmaker's. In the end, it is the Legislature - not the Executive branch - that should make the laws we live under, and the governor – no matter the state or the person – is supposed to implement only laws passed by the Legislature. Reforming emergency powers was one of the 10 policy recommendations Mountain States Policy Center made before the legislative sessions began.

The Treasure State is one of the only states left that does not permit charter schools - but that might be about to change. A slew of education choice bills were introduced in the Montana legislature over the past 10 days. They include House Bill 549, introduced by Rep. Fred Anderson. HB 549 authorizes the state public board of education to approve charter schools, so long as they meet 30 different requirements in their application. Another bill, House Bill 562, would provide more flexibility and room for innovation. Charter schools are tuition-free schools that are publicly funded but independently run. Most charter schools are exempt from many state laws and regulations, but are subject to a contract that includes goals, fiscal oversight and accountability. If charter schools don't perform, they can be closed. Similar to other state charter school laws, the Montana bill does not allow charter schools to pick and choose students. In fact, it says plainly: "A public charter school shall enroll all students who wish to attend the school unless the number of students exceeds the capacity of a program, class, grade level, or building. If capacity is insufficient to enroll all students who wish to attend the school, the public charter school shall select students through a lottery." The legislation also provides for a funding mechanism, saying "it is the intent of the legislature that a public charter school receive operational funding on a per-pupil basis that is equitable with the per-pupil funding within the general fund of the located school district." Charter schools are popular with parents, yet Montana remains one of the only states in the country without them. In some states, hundreds of charter schools are available to families who may be looking for an alternative education model. Still, throughout the country, more than 3.7 million students attend a charter school. In states like Washington, charter schools are limited mostly due to the state teacher's union, which has resisted any effort to fund them. The result is a small number of students in the Evergreen State who can take advantage of a charter school opportunity. The number of students who have access to charters in the western states is impressive. Arizona and Utah lead the way. Despite the claims of opponents, charter schools are public schools. They don't pick and choose students, and often times they serve more underserved students than local district schools. For instance, in Washington state, eight of 10 charter schools open in 2018 served more special needs students, as reported by The Seattle Times. Charter schools in Idaho have an impressive record. There are more than 70 statewide, and some are listed as among the top schools in the nation. The research shows Montana students would be well-served by having public charter school options.

When the Idaho Senate education committee heard an education choice bill this week, dozens of people signed up to testify – I was one of them. Invited to do so by members of the committee, I thought it important to provide a viewpoint based on our research and facts. As the father of a special needs child, I also wanted to provide a personal perspective. Unfortunately, time was cut short for many offering comments. Still, it took two days of committee meetings to get through all of the testimony. I listened intently to every person who spoke both in favor or opposed. As we reached the end of the second day, it struck me – very few people were speaking on behalf of the children. Of course, the lobbyists were there in full force, including the Idaho Education Association, the Idaho School Boards Association, the Idaho School Administrators association, and the beat went on and on. Time and time again we heard the argument of how the bill would or would not impact schools, and the money administrators have to spend. Too few times did we hear about how this would (or would not) help kids. The disappointing truth is that kids don’t have a special interest group or union to offer testimony or insight. All they have is their parents – and some legislators. Some parents found the time to offer their perspective. Surrounded by her children and testifying remotely, Chantelle Holman reminded lawmakers “one size of education does not fit all children.” Bessie Yeely brought her special needs child to the hearing and said she was concerned about the impact of the bill on his future. Pointing to disappointing results, mother Nicole Trakel said “were asking for better choices.” But the reality is those who spoke on behalf of the kids were outnumbered. Much of the argument became about the money instead of the issue of improving outcomes. Mountain States Policy Center has always taken a look at this issue from the perspective of what can improve outcomes for all children. After all, the money that so many people worried about this week is supposed to fund their education. Whether you think we spend too little or too much on K-12, the funds don’t belong to any administrator or union. The vast majority of education choice studies show a positive impact, not only for students who participate but also those who stay in the public school setting. Education choice is not about closing public schools – in fact, public schools are part of education choice. Choice makes public schools better and will increase the amount of money we’re spending per student, per year. It may also have the effect of easing overcrowding in Idaho schools. This isn’t about helping rich families either. Stats from the research show roughly half of the Arizona ed choice participants have never attended a private school before. Whether it’s this particular bill or another, policymakers should not let the perfect be the enemy of the good. The goal is to advance more options, for more children, and improve educational outcomes for all.

The Idaho state Senate is now considering a new education choice bill – SB 1144 – that seeks to expand the state’s already-successful Empowering Parents program. While it doesn’t go as far as Senate Bill 1038 and several other education choice proposals put forward thus far, it is a modest step in the right direction. It also follows some of the recommendations we made in our Education Choice Improves Outcomes study published in January. Here’s what SB 1144 includes: Expansion of the Empowering Parents to include “micro grants” of $1,000 to be used for “eligible education expenses” Addition of transportation to and from a facility where education program is offered as an “eligible” expense Addition of “tuition grant” of $6,000 that can be used for academic instruction, both traditional tuition and/or for the hiring of a certified teacher for a micro-school There are some limitations. First, the bill makes it clear the money is subject to appropriation by the legislature, meaning it’s not open-ended. Second, priority is given to students who belong to a family with a gross income under $60,000. If funds are still available, priority is given to students belonging to families with less than $75,000. And if funds are still available after that, money is distributed on a first-come, first-serve basis. Funds would have to be spent within two years after they are awarded. Micro grants per family are capped at $3,000. And the tuition grants can be given to no more than 2,000 students. The cost of the bill is $30 million for the ongoing micro grants, as well as $12 million for the tuition grants for five years. Because the program is labeled a “pilot,” the bill requires the legislature to review the tuition grant process again before the 2028 legislative session. When we testified before the Senate Education Committee on February 15th, we encouraged legislators not to make perfect the enemy of the good. While this bill is not perfect, it does include expansions that can help families get the educational options they need. When it shows success, legislators can move to expand it even more.

One of the number one tax complaints throughout the state is the increasing cost to afford the property tax on a home. A surge in the number of buyers moving in from other states, as well as a regional booming economy, have caused both Idaho and Montana property tax assessments to balloon, and property tax rates have followed. As we previously reported; “From 2020 to 2021, there was a 20.2% increase in the assessed value of Idaho property, totaling $230.7 billion. Then from 2021 to 2022, assessed values increased by 43.7% to reach $332.1 billion. To put this in perspective, in the last market run-up from 2005-2006 before the Great Recession, Idaho only experienced a 19.8% increase in assessed property values. Despite lowering levy rates throughout Idaho’s local governments, the property tax amount paid by each homeowner has increased substantially.” Property tax relief has been built into Idaho’s property tax system for decades. Beginning in 1980, homeowners received a property tax exemption up to 50% of the value of their home, originally capped at $10,000. This exemption was deducted from the assessed value of the home, while the remainder was then the taxable value of the property. In 2006, Idaho began to rely upon the Federal Housing Price Index to set the exemption amount for property taxes and this number fluctuated with the housing market. In 2016, the Idaho legislature voted to cap the property tax exemption at $100,000 (which later increased to $125,000). Because Montana does not rely on sales taxes, more of the burden is placed on property and income taxes. Numerous proposals have been put forward to address the issue of rising property taxes in both states. One such bill in Montana sought to fix appraisal values. But it has not moved. In Idaho, it appears lawmakers are coalescing around a new proposal that combines many popular elements, as Clark Corbin of the Idaho Capital Sun reports. Some of those elements include taking a portion of state funding and giving a credit to property tax bills, while in the second year of implementation the amount property owners pay for school district bonds and levies would also be reduced by state funding. Finally, it adds a provision that removes March election dates for bonds and levies. On the Senate side, the most recent property tax reduction bill is SB 1111, “dedicates 4.5% of annual sales tax revenues to property tax relief, providing a subtraction from each homeowner’s total property tax bill.” These changes may help reduce the cost for property owners in the short term, but will they stop overspending at the local level in the long run? It remains to be seen, but some state officials have laid some of the blame of higher property taxes on local governments that continue to spend and pass on costs to taxpayers.

Education choice is on the agenda again as the Idaho legislature comes down the home stretch. This week, two bills will be heard in committee that would expand options for Idaho families. They don't go as far as SB 1038 did, but SB 1144 and HB 289 still move the ball down the field. We analyzed 1144 - expanding the state's popular Empowering Parents program - last week. HB 289 is an update to a bill Representative Lance Clow tried to introduce in the House Education Committee several weeks ago. Unfortunately, the majority of the committee didn't allow the bill to get a public hearing. The legislation would create a program called the Idaho Education Opportunity Program (IEOP) which would create Education Savings Accounts that include 80% of the per-student state funding ($6,975) could be used for educational purposes, including tuition, at an accredited private school or on other education-related expenses including "reasonable transportation, education equipment and technology, educational therapies, fees for testing, admissions, fees to manage the IEOP account, tuition for individual classes, uniforms, tutoring, and technology devices." There are some restrictions. First, students with a family income level of less than $70,000 are given priority. Second, to renew the account parents have to demonstrate that their student is at grade level, or has shown one full year of academic growth. The new version of the bill also has several changes from that previous proposal: Requires a prompt response on applications On renewal of IEOP student at a private school, the parent shall provide to the state the results of the nationally normed test As lawmakers consider the proposal this week, it is important they fully understand what it would and would not do. At the previous committee meeting, several legislators made the mistake of calling ESA's "vouchers." As we have previously pointed out, there is a big difference between the two. Furthermore, it's important to note that, even if families decide to take advantage of the program, 20% of a student's funds would still go to the public school. This means it is likely that per-student funding in Idaho public schools would increase and overcrowding would ease.

Idaho legislators rushed to submit possible relief for the growing property tax pressure by February 13th. The 36th day of Idaho’s legislative session is the deadline for new bills to be submitted. There are currently five proposed pieces of legislation awaiting a hearing in the House Revenue and Taxation Committee. One twin piece of legislation, which does not involve a tax increase, was submitted to the Senate. Three proposals were introduced on February 2nd. House Bill 77 was submitted by Senator C. Scott Grow (R-Eagle). The proposal would divert 4.5% of Idaho’s sales tax revenue to property tax relief. Each of the 44 counties would receive a designated property tax relief amount from the state and divide the funds among the properties. Homeowners would receive the subtraction from their property tax bill in addition to the existing homeowner exemption. The bill would not increase taxes for citizens, but the state would have a cost of $150 million annually, to offset local government costs. Senator Grow submitted a similar piece of legislation to the Senate February 10th but proposed a budget increase of $205 million from state funds. This was Senate Bill 1075 and the bill was allowed introduction because it was not a tax increase. House Bill 78, submitted by Representative Bruce Skaug (R-Nampa), proposes reinstating the property tax exemption as it was written pre-2016. The previous method for the existing property tax exemption was capped based on the Federal Housing Price Index (HPI) and up to 50% of the value of the home. In 2016, the Idaho legislature capped the maximum value at $125,000, instead of using the HPI. HB 78 would remove the cap and index the maximum exemption to 50% of the HPI. This would place the value at about $180,000 in 2022. House Bill 79 was proposed by Speaker of the House Mike Moyle (R-Star). HB 79 is a multi-faceted bill that tackles school facility funding, local school board elections, and property tax relief in one pass. The bill’s property tax relief would raise the property tax exemption from $125,000 to $150,000. On February 9th, two more similar proposals were brought forward which addressed the current property tax exemption for hospital facilities. House Bill 109, proposed by Josh Tanner (R-Eagle) would remove the property tax exemption for outlying offices and facilities not related to the designated exemption purpose, i.e. administrative offices. The property tax exemption would remain in effect for the main hospitals statewide. House Bill 110, also proposed by Josh Tanner (R-Eagle) would remove exemptions for hospitals throughout the state. However, the nuances of which buildings and how much would be exempted would be left up to county commissioners. Addressing the escalating property tax pressure is a must-do for the Idaho state legislature in 2023. However, the next step for property tax relief remains to be seen as all six bills are awaiting a hearing.

Today, the Idaho Senate Education committee passed SB 1038 - a bill that would create universal Education Savings Accounts (ESA's). The vote was 6-3. The bill now heads to the floor. We previously analyzed the bill, introduced by Senator Tammy Nichols, here. Education choice is a hot topic in the legislature of Idaho. About 100 people showed up to testify on the bill. It took two days to get through all of the testimony, and some people had to cut their remarks to just one minute. Several of the legislators on the committee invited Mountain States Policy Center to testify on the proposal. Here are my written comments (not all were given in person because of time constraints): CHAIRMAN LENT, MEMBERS OF THE COMMITTEE… I’M CHRIS CARGILL, THE PRESIDENT OF THE MOUNTAIN STATES POLICY CENTER. THANK YOU FOR THE INVITATION TO TESTIFY THIS AFTERNOON. MOUNTAIN STATES POLICY CENTER IS THE STATE’S NEWEST FREE MARKET THINK TANK. WHILE WE DON’T OFFICIALLY ENDORSE OR OPPOSE ANY LEGISLATION, I DO WANT TO TELL YOU THAT THE BILL THAT IS BEFORE YOU TODAY – SENATE BILL 1038 – FOLLOWS MANY OF THE RECOMMENDATIONS WE HAVE MADE REGARDING EDUCATION CHOICE. WE HAVE ALWAYS TAKEN A LOOK AT THIS ISSUE FROM THE PERSPECTIVE OF WHAT CAN IMPROVE EDUCATION OUTCOMES FOR CHILDREN. THE MONEY BELONGS TO THEIR EDUCATION. IT DOESN’T BELONG TO ANY ADMINISTRATOR OR UNION. AS WE’VE WATCHED WHAT HAS HAPPENED IN OTHER STATES, WE CREATED AN EDUCATION CHOICE CHECKLIST TO DETERMINE WHAT WAS MOST IMPORTANT WHEN IT COMES TO ADOPTING THIS POLICY. THE LIST INCLUDES: FLEXIBILITY AVOIDING CLASS WARFARE AVOIDING ENROLLMENT CAPS AVOIDING PRIOR-YEAR SCHOOL REQUIREMENTS OVERSIGHT AND ACCOUNTABILITY ALLOWING FUNDS TO ROLL OVER AND NEVER ENCROACHING ON RELIGIOUS FREEDOM. WE WERE DELIGHTED TO SEE SO MUCH OF THAT CHECKLIST REFLECTED IN THIS PARTICULAR BILL. THE VAST MAJORITY OF EDUCATION CHOICE STUDIES SHOW A POSITIVE IMPACT, NOT ONLY FOR STUDENTS WHO PARTICIPATE, BUT THOSE WHO STAY IN PUBLIC SCHOOLS AS WELL. EDUCATION CHOICE IS NOT ABOUT CLOSING PUBLIC SCHOOLS. PUBLIC SCHOOLS ARE PART OF EDUCATION CHOICE. IN FACT, EDUCATION CHOICE WILL MAKE PUBLIC SCHOOLS BETTER AND WILL INCREASE THE AMOUNT OF MONEY WE’RE SPENDING PER STUDENT, PER YEAR. IT COULD ALSO HELP EASE OVERCROWDING. THIS ISN’T ABOUT HELPING RICH FAMILIES. STATISTICS FROM THE RESEARCH SHOWS ROUGHLY HALF OF THE ARIZONA PARTICIPANTS HAVE NEVER ATTENDED A PRIVATE SCHOOL BEFORE. FROM A BEST PRACTICES PERSPECTIVE, WE WOULD ALSO RECOMMEND A TARGETED ESA PROGRAM SPECIFICALLY FOR SPECIAL NEEDS KIDS WHO MAY STAY IN THEIR PUBLIC SCHOOL. IN CLOSING, LET ME JUST SPEAK PERSONALLY. A LOT HAS BEEN SAID ABOUT SPECIAL NEEDS CHILDREN. I HAVE A SPECIAL NEEDS SON. HE MEANS THE WORLD TO ME. HE NEEDS EXTRA HELP OUTSIDE THE TYPICAL CLASSROOM SETTING. LUCKILY, MY WIFE AND I HAVE BEEN ABLE TO AFFORD TO GET HIM THAT HELP. BUT WHAT ABOUT THE OTHER FAMILIES WHO CAN’T AFFORD IT? WHETHER ITS THIS PROPOSAL OR ANOTHER, WE ALWAYS URGE POLICYMAKERS TO NOT LET PERFECT BE THE ENEMY OF THE GOOD. OUR KIDS DON’T HAVE A UNION. THEY DON’T HAVE A SPECIAL INTEREST GROUP. ALL THEY HAVE IS THEIR PARENTS, AND YOU. WE’RE THANKFUL FOR YOUR CONSIDERATION OF THIS POLICY.

As Idaho, Washington, Wyoming and Montana now consider Education Savings Accounts to help families improve educational outcomes, one argument against seems to be used more than any other: "it just helps rich kids" already in private school. It's a dismissive statement, meant to turn the discussion away from improving outcomes and into a fight over rich versus poor or us versus them. But it's repeated often. In my recent interview with KTVB's Brian Holmes, the issue came up again. But the Arizona numbers have changed - and changed dramatically. Arizona now says its getting about 150 ESA applicants per day. Roughly half of the total applicants now are those who were previously enrolled in public schools, meaning they don't necessarily come from rich families that were already enrolled in private schools. The fact of the matter is that education choice actually helps level the playing feel. Families who are wealthy are going to be able to afford education choice no matter what. Families who can't afford it should not be assigned to a failing school simply because of their zip code. Read more about education choice in our special section Education Choice Improves Outcomes.

There will be a hearing this Friday, February 17th on the "Worker Freedom Act" in Montana. House Bill 448 would make Montana a right to work state. What does this mean? Essentially, the government cannot force you to be part of a union to have a job. More than half the states are right to work states, including Montana's neighbors Idaho and Wyoming. In Janus v. AFSCME, the United States Supreme Court affirmed the rights of workers not to be forced to join a union and pay union dues. The majority ruling said a requirement to do so amounts to compulsory speech. "Neither an agency fee nor any other pay­ ment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed." The benefits of right to work laws are clear. Consider some of the stats compiled by Bloomberg Law. From Bloomberg's analysis: "When all 27 right-to-work states are counted together, the average hourly earnings in 2018 were $25.78 for union workers and $20.92 for a nonunion worker. In other words, for every dollar a nonunion worker earned, a union member earned $1.23. That’s a bigger relative gap, not smaller, than the national average. Meanwhile, in the 23 non-right-to-work states and the District of Columbia, union workers’ average hourly wage in 2018 was $28.26 and nonunion workers’ was $25.14, which means that union members earned only $1.12 for every dollar earned by nonunion workers. That wage gap is four cents smaller than the national average. Of course, it should be noted that, dollar-for-dollar, union workers in non-right-to-work states are out-earning their counterparts in right-to-work states by a healthy margin ($28.26 to $25.78). But then, it’s also important to consider the predominance of Northeast and West Coast states among the non-right-to-work ranks, where overall wages are traditionally higher than in the rest of the country." As we mentioned previously, union membership has been on the decline in the United States - reaching its lowest level ever this past year. In the end, if employees want to voluntarily join a union, that should be their decision. But the government shouldn't force them to do so to keep their job.