Legislative Updates - Week Four
Senator Mark Harris, LD35
Both the House and the Senate passed the Tax Conformity Bill, House Bill 559 (HB559), this week and is now headed to the Governor’s desk. This bill adopts personal and corporate tax changes implemented by the One Big Beautiful Bill enacted by Congress last summer. It includes deductions for tips and overtime income among other things. By passing this legislation, Idaho will see a reduction of around $155 million for this fiscal year and $175 million for next fiscal year. Governor Little has recommended not making the tax retroactive to 2025 but rather start in 2026. However, H559 is retroactive and will affect 2025 tax deductions. H559 also restricts Idaho businesses from using research and development expenses for the state’s tax credit and federal deductions. Passage of this Bill will now allow the Joint Finance and Appropriations Committee (JFAC) to have a good idea of what the budget will be and enable them to begin their work proposing legislation. Passing H559 will enable our accountants across the state to be able to complete the tax preparation process before the April deadline.
As for the state budget, there are still concerns regarding potential cuts in Medicaid and other state revenues. JFAC this week proposed another one to two percent cut across the board over what the Governor proposed. We are told, however, that further cuts to Medicaid and Education will not be considered for now. We will see how this progresses as the session moves forward.
The current cuts to Medicaid and declining insurance reimbursements have contributed somewhat to one of our hospitals in our district facing possible closure. Teton Valley Health Care in Driggs has laid off 26 employees and has closed its infusion clinic. This is troubling because if the hospital closes, people in Teton County will have to travel up to an hour and half away to get health care. It is also troubling to lose those 26 people who are needed in their community. There are other small rural hospitals in Idaho facing the same dilemma.
To help with this problem, Idaho was awarded $960 million over 5 years or $186 million per year from the Rural Health Transformation Program from Congress. This week, legislation was introduced to help the legislature set up a method of disbursing these funds across Idaho to those rural hospitals that need this assistance. I have been involved in this effort, and I am hopeful we can begin to implement this program sooner rather than later. Our small rural hospitals are critical to our communities.
Rep. Josh Wheeler
Looking ahead, the budget conversation will begin to move into high gear next week. As those discussions ramp up, I’ve grown increasingly concerned about some proposed cuts that, in my view, are ill-advised—one example being the Bear Lake Regional Commission. My goal will be to approach budget decisions with a steady hand, protecting programs that provide real value while still being fiscally
responsible.
This week also featured some fascinating and wide-ranging debates on the House floor, including discussions around a balanced budget amendment, public lands management, and broader governance questions. It was encouraging to see a bill dealing with bullying move forward—an issue that deserves continued attention and thoughtful policy responses.
I also want to highlight the good work being done by Idaho’s mining industry. Responsible resource development continues to play an important role in our state’s economy, particularly in rural communities. At the same time, I remain hopeful that we can make progress on attainable housing solutions by removing unnecessary regulatory burdens that slow down building and increase costs across Idaho.
Next week is shaping up to be another intense one. We’re expecting heavy debate on short-term rental policy, as well as several immigration-related bills. While immigration is largely a federal issue, these discussions often generate strong opinions, and I’ll be watching closely how proposed state actions intersect with that broader
framework.
As always, I appreciate the engagement and feedback from constituents, and I’ll continue to keep you updated as the session moves forward.
Sincerely,
Josh Wheeler
Idaho State Representative
Representative Mike Veile
A critical vote occurred Friday, February 6th on the HCR 25 which is the Convention of States Article 5 for a federal balanced budget amendment. This vote passed 36/34 so it was as close as it gets. While there was significant concern about potential negatives from a Convention, my reasoning for my support for this is our existential federal deficit. The potential risks from a bad convention are overshadowed by the clear and present danger to our country from an unrestrained federal deficit. This message needs to be sent to congress to fix our deficit and that guided my vote.
The Senate now takes up this vote. It takes both the Senate and the House to affirm this convention for Idaho to join the call of states for a convention. Also, the Governor does not play a role in this.
Also, this week the conformity bill passed. This makes Idaho tax policy with regards to items such as taxing overtime or tips, for example, conform to that of federal tax policy established from the One Big Beautiful Bill. This is a $155 M additional tax cut to many individual Idahoans, and it is retroactive to 2025. This makes the current tax year which we are in even more challenging to close the budget gaps. However, I supported this bill as it would be confusing to have differing tax policies for state and federal and a departure from historical precedent with Idaho conforming. Certainly, Idahoans would feel cheated if they were not able to participate in these tax cuts.
We in District 35 continue to talk about the challenges for Teton Valley Hospital. If you are not familiar, they have had to lay off staff as they do not have enough revenue and cash on hand. One approach we have talked about and legislation I am proposing is to establish a Rural Hospital Emergency Fund. Ideally, this would be funded from the federal Rural Health Transformation funds that were granted also under the One Big Beautiful Bill. This would be a very low interest loan so that a revolving fund could be perpetually established. I am seeking input from the Hospital Association and if we can utilize the funds for this purpose. Additionally, I am seeking support for this legislation from other legislators and the relevant committee.
Education remains one of my highest priorities. We have not had a lot of legislation in the education committee as of yet. We also are not aware of if and where any education funding cuts will come from. While we know that some funding cuts to online programs are proposed, that has not been drafted in a bill yet. I will be diligent in following this.
Again, please communicate with your email and not through email click services. I need to know if you are in my district and how to respond. Automated emails go into our junk email and we can’t reply to them.
