Idaho Proposition 1, Income Tax Increases for Education Funding Initiative (2022)

Idaho Proposition 1
Election date November 8, 2022
Topic Taxes and Education
Status Not on the ballot
Type State statute	Origin Citizens

Idaho Proposition 1, the Tax Increases for Education Funding Initiative, was not on the ballot in Idaho as an initiated state statute on November 8, 2022.

Overview

What would Proposition 1 have done?

See also: Measure design

Proposition 1 would have amended the state statute to increase the tax on income above $250,000 for individuals, trusts, and estates and above $500,000 for couples filing jointly to $16,097 plus 10.925%. The initiative would have also increased the corporate income tax from 6% to 8%. The new tax brackets and tax rates would have taken effect on January 1, 2023.

The initiative would have also established the Quality Education Fund. Revenues from the increased taxes would have been deposited into the fund. The initiative would have required that the funds be distributed to public school districts and charter schools according to their share of the state's average daily attendance during the previous school year.

How are Proposition 1 and House Bill 1 (2022) related?

See also: House Bill 1 (2022)

During the 2022 special legislative session, the Idaho State Legislature passed House Bill 1 (HB 1). HB 1 changed the income and corporate tax rate structure to one flat rate tax of 5.8%. HB 1 annually allocates $410 million of the state’s sales tax revenue to the public school income fund and in-demand careers fund. HB 1 took effect on January 3, 2023. Idaho Proposition 1 would have taken effect on January 1, 2023.

On September 7, 2022, the sponsors of Idaho Proposition 1 withdrew the initiative. Luke Mayville, the founder of Reclaim Idaho and the main sponsor of the initiative, said, "There are two ways a ballot initiative can win. One way is by securing a majority of the vote at the ballot box. Another way is by forcing the Legislature to do something they would never have otherwise done. By placing the Quality Education Act on the ballot, the citizens of Idaho have forced the Legislature to make the largest investment in Idaho public schools in a generation."

Who supported and opposed Proposition 1?

See also: Support and Opposition

Reclaim Idaho led the campaign in support of Proposition 1. The Idaho Education Association endorsed the measure. Luke Mayville, the co-founder of Reclaim Idaho, said, "Most people do not view education as political. They understand that quality education relies on government, and therefore relies on politicians to do their jobs and fund public schools, but they don’t view funding for education as a controversial political topic. They view it as a no-brainer."

Ballotpedia did identify a campaign registered in opposition to Proposition 1. State Sen. Steven Thayn (R), who opposed the measure, said, "I am not supportive. First of all, I think it’s based on a false assumption that money will improve education, and that is not necessarily the case. The No. 1 need in education is not more money."

What other states are voting on education funding measures in 2022?

See also: Education funding ballot measures in 2022

Five ballot measures related to education funding were certified for the 2022 ballot in five states—California, Colorado, Idaho, Massachusetts, and New Mexico.

Measure design

See also: Text of measure

Click on the arrows (▼) below for summaries of the different provisions of the initiative.

Income tax increase: Tax increase on individuals on corporations

Proposition 1 was referred to as the "The Quality Education Act" by proponents. It would have amended the state statute to increase the state income tax for individuals, trusts, and estates with incomes above $250,000 and couples filing jointly with incomes above $500,000 to $16,097 plus 10.925%. The initiative would have required that the new tax income bracket be changed annually by an adjustment factor equal to the consumer price index for the calendar year 2024 divided by the consumer price index for the calendar year preceding the year to which the adjusted bracket would apply. The new tax brackets and tax rates would have taken effect on January 1, 2023. The tax bracket would have not been adjusted for inflation until 2025.

The initiative would have also increased the corporate income tax from 6% to 8%.

Quality Education Fund: Fund establishment and distribution

Proposition 1 would have also established the Quality Education Fund. Revenues from the increased income tax would have been deposited into the fund. The initiative stated that the funds should be appropriated by the state board of education. It would have prohibited funds from being appropriated to pay the salaries of superintendents, principals, or other administrators. It would have also given the state board of education the power to promulgate rules to implement the initiative. The initiative would have required that the funds be distributed to public school districts and charter schools according to their share of the state's average daily attendance during the previous school year.

Text of measure

Short ballot title

The short ballot title was as follows:

“

An Initiative Supplementing Funding For K-12 Education By Increasing The Individual And Corporate Income Tax Rates.

”

Long ballot title

The long ballot title was as follows:

“

An initiative relating to education and taxation; Amends Title 33, Chapter 9, Idaho code by adding a new section which creates a supplemental fund titled the quality education fund to be utilized by the state board of education for the betterment of K-12 public schools to achieve goals such as reducing class size, attracting and retaining highly qualified teachers and support staff, providing current and adequate classroom materials, providing full-day kindergarten, providing career technical education, providing art music and drama programs, etc. And provides that funds be distributed each year by August 31 to school districts and public charter schools, and directs the state board of education to promulgate implementing rules; Amends Title 63, Chapter 30, Idaho code by modifying the fifth individual income tax bracket and creates a sixth bracket for taxable income in excess of $250,000, taxing income in the sixth bracket at the tax rate of 10.925%, increasing the corporate income tax rate to 8%, and distributes revenue collected as a result of the increased rates to the newly created quality education fund; Declares the act effective January 1, 2023; And provides for severability.

”

Full text

The full text of the ballot measure is below:

Support

Reclaim Idaho led the campaign in support of Proposition 1.

Supporters

Candidates

• Terry Gilbert (D) - Candidate for Idaho Superintendent of Public Instruction

Unions

• Idaho Education Association

Arguments

• Luke Mayville, cofounder of Reclaim Idaho: "Most people do not view education as political. They understand that quality education relies on government, and therefore relies on politicians to do their jobs and fund public schools, but they don’t view funding for education as a controversial political topic. They view it as a no-brainer."
• Terry Gilbert (D), candidate for Idaho Superintendent of Public Instruction: "Our schools are the heart and soul of our communities, the driver of our economy, and our last and best bulwark against tyranny. They are the glue that holds us together as citizens in a democracy. There is no more important investment we can make than in our children and grandchildren."

Opposition

Ballotpedia did not locate a campaign in opposition to the ballot measure.

Opponents

Officials

• State Sen. Steven Thayn (R)
• State Rep. Lance Clow (R)

Arguments

• State Sen. Steven Thayn (R): "I am not supportive. First of all, I think it’s based on a false assumption that money will improve education, and that is not necessarily the case. The No. 1 need in education is not more money."
• Jared Walczak of the Tax Foundation: "It seemingly reverses recent tax cuts for lower-income filers. It creates an inadvertent recapture provision that introduces a tax cliff of more than $1,300 in additional liability on one additional dollar of income. And instead of inflation-adjusting the new top bracket, it accidentally reverses the direction, subjecting more nominal income to taxation with each passing year rather than less. ... If a tax bracket began at $250,000 a year ago, and then we experienced 8.5 percent annual inflation, inflation-adjustment would set the kick-in at $271,250 the next year. But the drafters inverted the equation, so instead of multiplying by 1.085 in this scenario, they would divide by it, with the kick-in now coming at $230,415."

Campaign finance

See also: Campaign finance requirements for Idaho ballot measures

The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed, which covered through September 10, 2022. The deadline for the next scheduled reports was October 10, 2022.

One PAC—Reclaim Idaho—was registered in support of the initiative. It reported over $700,000 in contributions.

	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Support	$716,476.73	$0.00	$716,476.73	$553,285.52	$553,285.52
Oppose	$0.00	$0.00	$0.00	$0.00	$0.00
Total	$716,476.73	$0.00	$716,476.73	$553,285.52	$553,285.52

Support

The following table includes contribution and expenditure totals for the committees in support of the measure.

Donors

The following were the top donors who contributed to the support committees.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
Movement Voter PAC	$22,500.00	$0.00	$22,500.00
A.J. Balukoff	$10,000.00	$0.00	$10,000.00
Ellen Bush	$10,000.00	$0.00	$10,000.00
James M. Green	$10,000.00	$0.00	$10,000.00
C. Fred Cornforth	$5,000.00	$0.00	$5,000.00

Background

House Bill 1 (2022)

During the 2022 special legislative session, the Idaho State Legislature passed House Bill 1 (HB 1). HB 1 was designed to provide a tax rebate equalling the greater of 10% of the taxes paid by a couple or individual in 2020 or $600 per joint filer or $300 for an individual. HB 1 changed the income and corporate tax rate structure to one flat rate tax at 5.8%. It also exempted the first $2,500 from taxation for single filers or $5,000 for joint filers. HB 1 annually allocated $410 million of the state’s sales tax revenue to the public school income fund and in-demand careers fund.

HB 1 passed the state House by a margin of 55-15, and it passed the state Senate by a margin of 34-1. It was signed by the governor on September 1, 2022. HB 1 took effect on January 3, 2023. Idaho Proposition 1 would have taken effect on January 1, 2023.

On September 7, 20222, Idaho Proposition 1 was withdrawn from the ballot. Luke Mayville, the founder of Reclaim Idaho and the main sponsor of the initiative, said, "There are two ways a ballot initiative can win. One way is by securing a majority of the vote at the ballot box. Another way is by forcing the Legislature to do something they would never have otherwise done. By placing the Quality Education Act on the ballot, the citizens of Idaho have forced the Legislature to make the largest investment in Idaho public schools in a generation."

Personal income tax rates

In February 2022, the Idaho State Legislature passed House Bill 436 (HB 436), which reduced personal income and corporate tax rates. Prior to the adoption of HB 1, Idaho had a graduated individual income tax with rates ranging from 1% to 6%. The various brackets for 2022 are listed below:

Idaho income tax brackets for tax year 2022
Tax rate	Single filer bracket	Married filer bracket
1%	> $0	> $0
3%	> $1,588	> $3,176
4.5%	> $4,763	> $9,526
6%	> $7,939	> $15,878

As of February 2022, 43 states tax individual income—41 taxed wages while New Hampshire taxes only dividend and interest revenue and Washington taxes the capital gains income of high earners. The remaining seven states did not tax personal income. Of the 41 states with an income tax, nine states have a flat rate, and 32 states have graduated rates that varied depending on different income brackets. The number of income tax brackets ranged from three in Kansas to 12 in Hawaii.

The tax rate applied to income within the highest bracket across the 43 states with income taxes ranging from 2.9% applied to income above $445,000 in North Dakota to 13.3% applied to income above $1,000,000 in California.

Corporate income tax rates

As of September 2022, Idaho's corporate income tax rate is 6%. In 2022, it was reduced by House Bill 436 (HB 436) from 6.5%.

As of 2022, 44 states levy a state corporate income tax. The lowest rate was 2.5% in North Carolina and the highest rate was 18.28% in New York. Nevada, Ohio, Texas, and Washington imposed gross receipts taxes. South Dakota and Washington were the only states that do not levy a corporate income or gross receipts tax. Under Proposition 1, Idaho would have tied with Massachusetts for the twelfth-highest corporate income tax rate at 8%.

Education funding in Idaho

Public schools in Idaho are funded through the state general fund, state dedicated funds, federal dollars, and local funds. In 2022, the Idaho State Board of Education voted to allocate state K-12 funding based on enrollment rather than the default of average daily attendance.

As of August 2022, Idaho ranked 50th for K-12 spending. The state funded on average $6,212 per pupil ($1.93 billion total), and local governments funded on average $2,266 per pupil ($703.7 million total). The state received $891 per pupil ($276.7 million) from the federal government.

Previous attempt to place the initiative on the ballot

See also: Idaho Income Tax Increases for Education Funding Initiative (2020)

In 2019, Reclaim Idaho, which also sponsored the 2018 ballot initiative that expanded Medicaid in the state, filed a similar initiative as Proposition 1 (2022) for the 2020 ballot. In March 2020, the campaign reported collecting more than half of the required signatures. On March 16, 2020, petitioners asked Idaho Governor Brad Little (R) to allow online signature gathering due to the coronavirus pandemic. Marissa Morrison Hyer, a spokeswoman for the governor's office, said, "Idaho statute does not allow for the suspension of rules regarding the physical collection of signatures, even in times of emergency."

The campaign filed a lawsuit regarding the use of online signature gathering that was appealed all the way to the U.S. Supreme Court. On July 30, 2020, the U.S. Supreme Court ruled in favor of Gov. Little and the secretary of state arguing the "State is likely to suffer irreparable harm absent a stay. Right now, the preliminary injunction disables Idaho from vindicating its sovereign interest in the enforcement of initiative requirements that are likely consistent with the First Amendment."On July 31, 2020, the campaign announced it would suspend its campaign in light of the court's ruling.

Education funding ballot measures in 2022

Five ballot measures related to education funding were certified for the 2022 ballot in five states.

State	Measure	Description	Outcome
California	Proposition 28, Art and Music K-12 Education Funding Initiative	Requires funding for K-12 art and music education
Colorado	Reduce Income Tax Deduction Amounts to Fund School Meals Program Measure	Reduces the allowable state income tax deduction amounts; creates and funds the Healthy School Meals for All Program
Idaho	Income and Corporate Tax Changes and Education Funding Advisory Question	Advising the legislature to enact a flat income and corporate tax rate structure, send tax rebates to qualifying taxpayers, and dedicate $400 million annually to education
Massachusetts	Question 1, Tax on Income Above $1 Million for Education and Transportation Amendment	Creates a 4% tax on incomes that exceed $1 million for education and transportation purposes
New Mexico	Constitutional Amendment 1, Land Grant Permanent Fund Distribution for Early Childhood Education Amendment	Funds devoted to early childhood programs from the Land Grant Permanent Fund

Path to the ballot

See also: Laws governing the initiative process in Idaho

The state process

In Idaho, the number of signatures required to qualify an initiated state statute for the ballot is equal to 6 percent of the registered voters as of the state's last general election. Petitions can be circulated for up to 18 months. Idaho features a distribution requirement that signatures equal to at least 6 percent of registered voters in 18 of the state's 35 legislative districts be included in petitions. Signatures for initiatives must be submitted by May 1 of the year in which the measure is to go on the ballot.

The requirements to get an initiated state statute certified for the 2022 ballot:

• Signatures: 64,945 valid signatures were required.
• Deadline: The deadline to submit signatures was May 1, 2022.

Initiative petition signatures are verified by county clerks and then sent to the secretary of state for certification.

Details about this initiative

• The initiative was filed by Reclaim Idaho.
• On February 3, 2022, the campaign announced that they had collected more than 50,000 signatures.
• On April 18, the campaign reported collecting 86,090 signatures.
• On May 2, Reclaim Idaho submitted more than 95,269 signatures for verification. The secretary of state's office gave campaigns until May 2 to turn in signatures since May 1 fell on a Sunday.
• On July 22, 2022, the Idaho Secretary of State announced that the initiative had qualified for the ballot.
• On September 7, 2022, Proposition 1 was withdrawn by sponsors from the ballot.

See also

2022 measures

• 2022 ballot measures
• Taxes on the ballot
• Education on the ballot

Idaho

• Idaho ballot measures
• Idaho ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Full text
• Idaho 2022 proposed ballot initiatives