The bill, brought by Rep. Dennis Lake, R-Blackfoot, will come forward again in the committee in the next week or two.

The crux of the debate rested on whether or not legislators are full- or part-time employees. Rep. Eric Anderson, R-Priest Lake, told members of the committee he would be “offended” if he is regarded as a part-time worker while serving in the Legislature. He believes that paring down pensions would mean fewer people would be willing to serve in Boise for three months each year.

“This is going to lead down a road where the retired and wealthy can serve in the Legislature and the rest can’t,” said Anderson.

Rep. Erik Simpson, R-Idaho Falls, echoed Anderson’s feelings. “Quite frankly, it costs me a lot of money to be here,” Simpson said, explaining that he loses wages by serving in the Capitol.

The issue stalled, however, when Rep. Lynn Luker, R-Boise, queried the committee how legislators would accrue Public Employee Retirement System (PERSI) credit going forward and how past service would be handled. Lake was forced to leave the hearing to attend another committee meeting and wasn’t able to answer Luker’s questions.

As law stands, PERSI calculates pension benefits based on an employee’s highest consecutive 42 months of pay, but also takes into account a worker’s total span of service.

That means lawmakers can log many years in the Legislature at a pay rate of about $16,000, then take a high-paying state job and have their legislative time count at the increased wages.

Lake’s bill would end pension-spiking by averaging out wages rates over a legislator’s full career, instead of basing payouts on just the highest 42 months. If it’s eventually cleared, the measure would take effect July 1, 2012.

There are several examples of pension-spiking in the Idaho Legislature’s immediate past. Late last year, former Sen. Joe Stegner, R-Lewiston, took a job as the head lobbyist for the University of Idaho, a post paying $124,000 annually.

If Stegner had simply retired at the end of 2012—his 14^th year in the Legislature—he would receive a pension payout of about $373 per month, or $4,480 annually. If Stegner stays with the school 42 months at his starting wage, his pension payout will increase to approximately $3,410 a month, or $40,920 annually.

Former Rep. Debbie Field, R-Boise, retired as head of the Office of Drug Policy last year, just 43 months after being appointed to the job by Gov. Butch Otter. With her $70,000-a-year salary counting in her pension calculation, Field is set to bring in about $23,052 annually. If she had not been appointed to the post after losing her House election in 2006, her pension would be approximately $5,316 a year.

Former Senate Pro Tem Bob Geddes, R-Soda Springs, resigned during the 2011 legislative session to take a commissioner spot at the Idaho State Tax Commission, a job paying more than $85,000 annually. If Geddes stays with the commission at least 42 months, his pension will jump more than $2,500 each month or $30,000 each year.

He might be right.

In short order Tuesday, the House Commerce and Human Resources Committee approved Lake’s bill unanimously, sending it on to the House floor.

Lake’s legislation is seeking to create retirement equality among Idaho lawmakers. The way the state is conducting its per diem gives lawmakers within 50 miles of the Idaho Capitol larger pensions than those outside the 50-mile radius.

The problem is that lawmakers living within 50 miles of the Idaho Capitol have their per diem payments included in their paychecks and the payments are regarded as taxable benefits. The Public Employee Retirement System of Idaho (PERSI) then uses the salary rates to compute a legislator’s retirement payment.

Lawmakers outside the 50-mile radius do not have per diem included in salaries and are issued a check during the months of the legislative session.

Two lawmakers doing essentially the same amount of work each year could have entirely different pension payments simply because of where they live. Lake estimates per diem inclusion results in pension payments about 25 percent higher than they should be, depending on the length of legislative session.

Two senators caught up in a separate per diem controversy last year illustrate the discrepancy.  Republicans Curt McKenzie, Nampa, and John McGee, Caldwell, have salaries much higher due to the per diem calculation than those senators living outside the 50-mile radius. Records show McGee earned $32,986 in 2009, some $27,842 in 2010, and $29,052 in 2011. McKenzie earned the same amounts as McGee in each of the three years.

For comparison, Senate Majority Leader Bart Davis, R-Idaho Falls, earned a little more than $18,000 in each of the past three years.  Davis, out of the 50-mile radius, received his per diem payments in the form of a reimbursement check from the Senate administration.

Lake’s legislation will likely be heard on the House floor by the end of the week.

Lake introduced the bill late in the 2011 session, but it never received a hearing because some lawmakers thought the bill would have unintended consequences. The new version of the legislation, Lake said, addresses only legislative pensions.

As part of their compensation, lawmakers participate in the Public Employee Retirement System of Idaho (PERSI) for their pensions. After a lengthy career in the Statehouse, lawmakers typically receive a few hundred bucks each month in retirement.

Occasionally, however, a lawmaker retires and then is appointed to a high-paying state job. All it takes  is 42 months in that high-paying post and a lawmaker could spike his pension by several thousand dollars each year.

Lake said he believes it’s “unconscionable” for the Legislature to allow this perk to go on. “We don’t believe this is quite right,” he told his colleagues on the House State Affairs Committee.

Lake’s bill would end that practice and change the law so that legislative pay   rates, about $16,000 a year, and wages of higher-paying state jobs are averaged out in pension calculations.

There are several examples of pension-spiking in the Idaho Legislature’s immediate past. Late last year, former Sen. Joe Stegner, R-Lewiston, took a job as the head lobbyist for the University of Idaho, a post paying $124,000 annually.

If Stegner had simply retired at the end of 2012—his 14^th year in the Legislature—he would receive a pension payout of about $373 per month, or a $4,480 annually. If Stegner stays with the school 42 months at his starting wage, his pension payout will increase to approximately $3,410 a month, or $40,920 annually.

Former Rep. Debbie Field, R-Boise, retired as head of the Office of Drug Policy last year, just 43 months after being appointed to the job by Gov. Butch Otter. With her $70,000-a-year salary counting in her pension calculation, Field is set to bring in about $23,052 annually. If she had not been appointed to the post after losing her House election in 2006, her pension would be approximately $5,316 a year.

Former Senate Pro Tem Bob Geddes, R-Soda Springs, resigned during the 2011 legislative session to take a commissioner spot at the Idaho State Tax Commission, a job paying more than $85,000 annually. If Geddes stays with the commission at least 42 months, his pension will jump more than $2,500 each month or $30,000 each year.

The bill passed the House State Affairs Committee unanimously and will likely receive a hearing next week. This is the second bill Lake is pushing to fix some elements of PERSI. The first, set for a hearing in the House Commerce Committee Tuesday afternoon, would require PERSI to exclude per diem payments from retirement calculations.

If the coalition behind Lake pushes the bill, the group will ask for a hike of $1.25 per pack. Idaho’s tax on cigarettes is the eighth lowest in the nation at 57 cents per pack and the lowest in the Inland Northwest.  The nationwide average sits at $1.45 per pack in state taxes.

If the tax is successfully raised, it would put Idaho at $1.82 per pack, good for 15^th-highest in the country.

Lake told IdahoReporter.com Monday that is he serving as an “errand boy” for ACS and will bring the bill if the group asks him to do so. The potential legislation comes with a dual purpose: to reduce youth smoking rates and pay for some of the societal costs of tobacco use.

“Smokers don’t pay anywhere near the cost of their tobacco use,” Lake said, adding that instead of a tax hike, the potential legislation could instead be viewed as a user fee.

Heidi Low, government relations director for ACS, said that evidence in other states shows that youth smoking takes a large hit when taxes are hiked. (See the coalition’s data sheet on the cigarette tax hike here.)

It’s estimated that use of cigarettes and other forms of tobacco cost Idaho’s Medicaid at least $83 million annually. Overall, analysts say tobacco use costs Idahoans as much as $319 million in health-related costs each year.

Idaho could raise more than $50 million in new money annually if the plan successfully makes its way through the Legislature. Lake says there is no definite plan for spending the money, but says it won’t go to the general fund because some lawmakers don’t want the government to have any more money than is absolutely necessary. “They want to squeeze down government and the only way they can do it is by starving it,” Lake said.

Low said that she would like to see the money primarily dedicated to smoking cessation and health care-related programs.

How likely is it that tax hike advocates get the plan through both chambers of the Statehouse and onto the governor’s desk in 2012, which is an election year? “It’s a difficult challenge,” Lake warned, but noted that the coalition supporting the plan has some clout with legislators. “They also vote and have some political muscle.”

Low wouldn’t comment on the politics of the matter, but said that there is support for the tax increase. “We as a coalition know this is good for Idaho and its youth,” Low explained.

But a hike in the tax could mean low-income Idahoans pay more for their cigarettes. The Heritage Foundation, a conservative think tank based in Washington, D.C., notes that poor or low income people make up at least half the total smokers and would bear a significant share of the cost of a tax hike. “A tobacco tax disproportionately burdens low-income Americans,” the group wrote in a 2007 editorial.

Lake says he’s unsure of when the group might decide if it wants to bring the legislation. “It’s their decision, not mine,” he explained. Low said the group will continue working with lawmakers and decide at some point in the future.

The Blackfoot Republican was poised to bring the bill earlier this year, but eventually declined because he felt it wouldn’t have enough votes to make it out of his own committee.

As it turns out, all lawmakers living within 50 miles of the Capitol benefit extra from per diem payments.

Terri Franks-Smith, finance chief for the Idaho House, said that any lawmakers living within 50 miles of the Capitol have their per diem payments taxed, included with salary, and counted toward retirement benefits.  Legislators outside the 50-mile radius receive their per diem money in a simple reimbursement that is not taxed, nor is it counted in pension calculations.

Franks said the determination comes from a federal law passed in 1981.

The determination creates an inequity among Idaho lawmakers.  Due to the per diem money, lawmakers within 50 miles of the Capitol get a spike in their salaries that can result in higher pensions than their counterparts outside of the radius.

It can be a big and expensive problem.  The two senators under fire, Republicans Curt McKenzie, Nampa, and John McGee, Caldwell, have salaries much higher due to the per diem calculation than those senators living outside the 50-mile radius. Records show McGee earned $32,986 in 2009, $27,842 in 2010, and $29,052 in 2011. McKenzie earned the same amounts in each of the years.

For comparison, Senate Majority Leader Bart Davis, R-Idaho Falls, earned a little more than $18,000 in each of the past three years.  Davis, being out of the 50-mile radius, received his per diem payments in the form of reimbursements from the Senate.

That means that when the senators eventually retire, McGee and McKenzie will receive a higher amount than Davis for what could be considered the same amount of work assuming the same years of service.

That inequity doesn’t sit well with Rep. Dennis Lake, R-Blackfoot, who heads the House Revenue and Taxation Committee.  “Everyone should be treated equally when it comes to PERSI benefits,” Lake told IdahoReporter.com Wednesday.

The issue, Lake says, is something that must be addressed in the 2012 legislative session. “I’d tackle that in a heartbeat,” the Blackfoot Republican said.

While the state cannot alter the accounting practices dealing with the federal 50-mile limit, the state can prevent per diem payments from being counted in retirement calculations with a change to a single line of code.

Idaho Code 59-1302(31)(A) defines how salary is to be defined for pension considerations.  The section defines salary as “The total salary or wages paid to a person who meets the definition of employee by an employer for personal services performed and reported by the employer for income tax purposes, including the cash value of all remuneration in any medium other than cash.”

But will lawmakers go for a change?

Rep. Marv Hagedorn, R-Meridian, who sits on the powerful Joint Finance-Appropriation Committee, says the issue must be dealt with by the Citizen’s Committee on Legislative Compensation, which won’t meet until September of 2012.  “That’s their job and … if they decide we need to run legislation, they will need to come to us,” Hagedorn said.  “These are things they will need to decide what’s right and what’s not.”

It looks like others outside the Gem State have taken notice of PERSI’s performance; the National Institute on Retirement Security, a Washington, D.C.- based think tank, named Idaho’s retirement system as one of the best and most sustainable in the country.

Just a few years ago, due to the financial collapse of 2008, the state’s retirement account dropped sharply and found itself underfunded by more than $2.9 billion.

Fast forward to July 2011 and the fund’s losses have mostly been erased, thanks to high investment returns. In a document released last week by PERSI, the agency announced an overall investment return rate of 20.9 percent, this the highest rate in 25 years.  The fund is valued at about $12.25 billion, though it is only about 90 percent funded.

Investment managers attribute the success of the partial recovery to “losing less” than the markets by making key choices in planning.

The National Institute on Retirement Security, a group that believes pensions create jobs and stave off poverty, recognized the PERSI fund for its stability.  Dianne Oakley, head of the group, praised Idaho for creating a strong program that can be seen as a model for other states.

“States like Idaho with strong sustainable pension plans are wise to ensure their workforce is well positioned for retirement,” said Oakley. “Otherwise, this could become a financial risk or burden to the Idaho taxpayers should its older workers find they are unable to retire or must turn back to the state for assistance to make ends meet.”

The group also recognized select plans in New York, North Carolina, Illinois, Delaware, and Texas.

Oakely’s group believes that Idaho’s defined-benefit plan – a program through which participants contribute through their careers and then receive a set monthly payment for life upon retirement – keeps elderly residents out of poverty.

But her praise for that plan may fall on the deaf ears of at least one state lawmaker.  Rep. Jeff Thomspon, R-Idaho Falls, told IdahoReporter.com that he intends to explore moving the state to a defined-contribution plan  - a program that is similar to a 401(k) and pension payments are based on market returns – or a hybrid of the two.  ”I believe this is an issue we need to deal with,” Thompson said.

A switch to a defined-contribution plan would mean more risk for public employees, but could save some programs from being pinched at budget times. Earlier this year, thanks to the high investment returns, PERSI delayed a request for $15 million in state money to shore up retirement accounts due to the slumping economy.  If it hadn’t been delayed, funding for public schools or health and welfare programs could have taken deeper cuts than ones lawmakers proscribed this year.

The closer the PERSI account comes to fully-funded status, the more lawmakers can discuss making a switch to another retirement system.  Regulations prohibit lawmakers from changing plans until all obligations can be met.

Some lawmakers are opposed to any changes of the program, however.  Rep. Dennis Lake, R-Blackfoot, believes PERSI is doing just fine. “I think PERSI is working quite well,” he told IdahoReporter.com.  Rep. Fred Wood, R-Burley, agrees and says that the Legislature should avoid making changes to the program.

In the announcement, Otter said Field wants to spend more time with her family. Field, who served for 12 years in the Idaho Legislature before taking the post as Otter’s drug czar, worked just long enough to more than quadruple her publicly-funded pension.

According to Public Employee Retirement System of Idaho (PERSI) guidelines, pensions are based on the months worked by a public employee, along with the highest 42 months of pay during that time.

While she was, in fact, employed by ODP from January of 2007 until June 10, 2011, Field took off nine months in 2010 to run Otter’s re-election campaign.  Records show she took a leave of absence from her post from March 1, 2010, until Dec. 1, 2010.

With her campaign months subtracted from her total service record, she worked 43 months as the head of ODP, just enough to meet the PERSI threshold for a spiked pension.

In her retirement calculation, Field gets to count 120 months in the Legislature, making about $16,000 a year, and her time as drug czar, with a yearly salary of about $74,000.  But due to her accrual of 43 months at the higher rate of pay, she gets to retire with a pension much higher than if she had simply retired from the Legislature.

Had she retired when she lost her re-election race in 2006, her pension from her years in the Legislature would have amounted to about $443 per month, or approximately $5,316 a year.

With her legislative and drug policy months combined in the retirement system, her pension will be more than four times higher at $1,921 a month, or $23,052.

In line with PERSI rules, the leave of absence to run Otter’s campaign does not interrupt with her accrual of months of service.  That means that while the months she was not working for ODP and therefore was not being paid or garnering more retirement, the months surrounding the leave still count.

When Field was contacted about the retirement situation, she said she didn’t realize her time in office barely cleared the full retirement bar.  “I had no idea about that,” Field said.  Her resignation came, she explained, in order to help her pregnant daughter while her son-in-law is serving in the military in Afghanistan.

“I knew this would not come around again, so I knew I needed to be home,” Field said of the opportunity to aid her pregnant daughter.

Field says the 42-month service with ODP was not a factor in her decision. “I would’ve have done the same thing had it not been (over the threshold),” she said.  “There was no motivation here other than doing the right thing.”

Field is hardly the first to go this route.

Former lawmaker Bill Deal, who served in the Idaho Legislature as a Republican from Nampa, is heading this direction thanks to his 2007 appointment to head the Department of Insurance, a position that carries with it a $97,000-a-year salary.  According to IdahoReporter.com’s calculations, Deal’s monthly retirement payment has already been spiked by at least $2,600 a month.

The most recent example is former Senate Pro Tem Bob Geddes, who resigned from the Senate in February after being appointed to the oversight board of the Idaho Tax Commission.  Geddes will make $85,000 annually and will hike his pension by about $2,500 a month if he stays only 42 months.

Rep. Dennis Lake, R-Blackfoot, introduced legislation earlier this year to end the practice and separate legislative service from timed worked in other government jobs.  The bill never received a formal hearing.

Lake was unaware that Field had resigned and that she had cleared the 42-month threshold.  He plans on bringing his bill back in 2012.

Idaho operates on a defined-benefit program, which means that public employers and employees contribute certain amounts to the investment pool. Upon retirement, employees receive a set monthly pension based on months of on the job and highest salary levels over 42 consecutive months of employment with a particular government agency.

Under a defined-contribution plan, public employers and employees would pitch in a set amount to retirement accounts on a monthly basis.  The money then would be invested by PERSI and the investment returns would fund an employee’s retirement, but there would be no set amount that a beneficiary would receive upon retirement. If investments perform well, more money is available for retirement.  If investments crash, so do defined-contribution plans.

Idaho’s neighbor to the south will, as of July 1, offer new state employees the option of choosing a strictly defined-contribution plan or a new hybrid model that includes a little of both systems.

The architect of the plan, Utah Sen. Dan Liljenquist, R-Bountiful, has been noticed by major news bureaus, including the Wall Street Journal and the New York Times, and has also received praise from interest groups like Freedom Works, a national entity dedicated to the principles of limited government.  The GOP senator is working with lawmakers in 18 states across the country to devise Utah-like plans for them.

Liljenquist said that even with the changes implemented in his state, the program is still competitive.  “Nobody in the private sector gets a retirement deal like this,” Liljenquist said of the pension benefits.  “Nobody.”

One of the most noticeable alterations for Utah is that the state employees have the option to choose a defined-contribution plan they can take with them should they leave state employment.  Advocates for this option say employees not planning lifelong government careers can take retirement accounts with them to new jobs.  Employees are able to direct their own investments and put money where they wish, but they can receive investment help and advice from Utah Retirement System advisors.

The Beehive State caps contributions to this plan at 10 percent, but employees can contribute more if they wish.

Utah still makes a defined-benefit plan an option for all employees, but it is believes they will most likely be utilized by those employees whose career paths keep them employed by government entities, like firefighters, teachers, and law enforcement officials.

Perhaps the biggest difference in the new defined-benefit plan is how the fund is handled when markets collapse.  Under the new system, if investments slump, it’s the employees themselves who have to fork over more money to close the gap, not taxpayers.

Like the defined-contribution plan, Utah pays up to 10 percent of each employee’s salary into the defined-benefit plan and no more, even in hard financial times.  If more than 10 percent is needed to maintain the system – it’s only happened once in Utah history, Liljenquist says – workers have money taken straight out of their checks.

If the rate required to maintain the defined-benefit program drops below 10 percent – it’s sitting at 7.5 percent now – the state pays the difference into a 401(k) account for employees.  That means that if the plan was active now, Utah would put 7.5 percent into a defined-benefit account and 2.5 percent into a 401(k) plan.

Another change is that a key multiplier used in the final determination of the amount paid upon an employee’s retirement is lowered from 2 percent to 1.5 percent, thereby reducing the liabilities incurred by employees and lowering retiree payouts.

Liljenquist says that the issue boils down to equality.  “Should taxpayers be on the hook for higher taxes to fund pensions for government employees?” he asked.  “That’s a fairness issue.”

One member of the Idaho House budget-setting committee, Rep. Fred Wood, R-Burley, told IdahoReporter.com that the Legislature can only change the retirement system structure when the fund reaches complete solvency. But he feels there will be discussion about possible changes to the system in anticipation of the time when full solvency is realized.

House Revenue and Taxation Committee Chairman Dennis Lake, R-Blackfoot, concurred with Wood that there could be discussion about pension

Idaho State Rep. Dennis Lake, R-Blackfoot

reform. “It’s easier to switch if we are fully-funded,” Lake said.  “We could switch in a heartbeat if we are fully-funded.”

Lake isn’t thrilled that some lawmakers are looking to reform the pension program.  “I think PERSI is working quite well,” he stated.

The fund, administered by PERSI, is worth about $12.1 billion and is 90.9 percent funded as of April 28.  It still needs an additional $1.15 billion to close the funding gap. The program has recovered from market losses in the last few years that drove the unfunded liability as high as $3.2 billion at the end of fiscal year 2009.

Utah State Rep. Holly Richardson, R-Pleasant Grove

One of Liljensquists’s allies in the Utah House, Rep. Holly Richardson, R-Pleasant Grove, told IdahoReporter.com that the pension reform plan is simply bringing the public employees in line with their private sector counterparts.

She said that pension reform, while not a high-profile issue, “has real impacts on real people” because shifting state funding to close shortfalls in retirement accounts can hurt other legitimate government programs.  “When the state budget is squeezed by deficits, that money has to come from somewhere,” Richardson said.  “It squeezes education. It squeezes corrections. We don’t have a magic pot of money.”

In Idaho, the state and local governments were almost forced to pay an extra $40 million in program contribution rate hikes in the next fiscal year to help close the unfunded pension gap.  The state’s portion of that figure would have amounted to $15 million.

If the PERSI oversight board decided not to delay the contribution rate hikes a year, it’s possible that the budgets of the two biggest spending items for the Idaho Legislature, public schools and Medicaid, could have taken larger hits than they did.  The budget for public schools was cut by $47 million, while Medicaid saw an overall reduction of $34.7 million this year.

That scenario was not lost on Thompson, who helps write department budgets each year. In referring to the $15 million, Thompson said, “If that payment hadn’t been postponed, the money would have come from those accounts (Medicaid or public schools).”

The Utah plan also makes one other small but important change.  Monthly pension payments will be based on the highest rate of pay for 60 consecutive months, not 36 months like the old system.  This alteration prevents state employees from spiking pensions toward the end of lengthy careers.

Idaho bases its pension benefits on 42 months of highest consecutive pay.

If the Idaho Legislature decides to take up the issue, the change would likely be challenged. The Idaho Public Employee Association, a voluntary union for state and local government employees, is on the record as being firmly against defined-contribution plans.  The group favors defined-benefit programs, which it feels are more economically-sound and provide greater returns on investments than defined-contribution systems.

Wood says he is mostly comfortable with a defined-benefit plan, but he does have some concerns about the plan going forward.  If future legislators and PERSI board members are able to fend off “human greed,” Wood said, by not giving retirees large cost-of-living adjustments annually – they are entitled to a 1 percent increase each year – then he feels the program is likely fine.

Utah has taken care of that aspect of pensions, too.  Liljenquist’s plan caps yearly cost-of-living-adjustments at 2.5 percent, even if the consumer price index says inflation would justify a greater amount.

In the end, Liljenquist says that pension reform must happen, regardless of which party is bringing it.  Democratic lawmakers in New York are preparing a Liljenquist-inspired pension reform plan of their own, which the Utah lawmaker says shows the importance of the issue.  “This is an issue for all of us,” Liljenquist said. “Not a partisanship issue.”

Thompson plans to begin work on the issue as early as next week in meetings with House leadership.  He says he will “reach out” to Liljenquist and will likely invite the Utah senator to meet with Idaho lawmakers in coming months.

All changes to state revenue collections must start in the Idaho House, and such changes generally go through the House Revenue and Taxation Committee, which is led by Rep. Dennis Lake, R-Blackfoot. Lake, who’s led the committee since 2007, announced late last year that he backed a plan to increase Idaho’s cigarette tax by $1.25 a pack. That plan, which would’ve raised more than $50 million, was never introduced in Lake’s committee, due to a lack of support from the rest of the GOP committee members.

“I thought that by the end of February, the first of March, we’d be looking for additional revenue, yet the Legislature seemed more willing to make the cuts,” Lake said.

House Democrats repeatedly called for a hearing on the tobacco tax increase, saying it could thwart tobacco use and prevent reductions in state services. Democrats in both the House and Senate also called for additional revenues to prevent a reduction in total state and federal funding for public schools.

Lake told IdahoReporter.com that the issue will come back in 2012, but he’s not sure there will be a different result unless economic circumstances change.

Predicting the future of Idaho’s economy the past few years has proven difficult for both lawmakers and economists, but if conditions worsen, the tobacco tax and more could be on the table next year. Rep. Ken Roberts, R-Donnelly, the House Republican caucus chair and spokesman, said that if conditions worsen and lawmakers run out of ideas for spending cuts, lawmakers would consider raising more sin taxes than just tobacco.

Lake said that, as evidenced this year, changing taxes on specific industries can be difficult. Lawmakers would be sure to hear from opponents to tax increases on cigarettes, beer, wine, and alcohol. “They all have a very strong lobby behind them,” Lake said.

Lake agreed with Roberts that Idaho’s economic situation will drive any talk of tax increases.

He said that if the state economy far exceeds expectations — growing at 8 to 10 percent, rather than the budgeted 3 percent – talk of lowering taxes could gain steam. A plan by some House Republicans to reduce Idaho income tax rates, which currently top out at 7.6 percent for individuals and 7.8 percent for businesses, could also get consideration again next year.

However, Lake said that loss to state revenues would need to be made up somehow. “Quite frankly, our corporate tax is too high,” Lake said.

Efforts to get rid of some sales tax exemptions and start taxing some services are also likely to come back, though Lake feels taxing services is unlikely.

“Unless the state comes in dire straits, I don’t see us going there for a long time,” he said.

House Speaker Lawerence Denney, R-Midvale, is one of those who is proud lawmakers showed fiscal restraint and opted to cut programs instead of raising taxes. “I think the most significant thing is that we balanced the budget,” said the speaker.  “I think a lot of people don’t understand how important that is.”

But Senate Democrats characterized this session as one of the worst in recent memory. Denney says session enjoyment comes down to ideology.  “If you want to increase taxes and increase spending it was a terrible session,” said Denney.  “Everybody that depends on government will feel some pain, but in the long run, I think we did what is right for Idaho.”

House Majority Leader Mike Moyle, R-Star, is another legislator happy to give the citizens a balanced budget without tax hikes.  “While not everybody’s happy, I think we got the best results we could with the cards we were dealt,” said Moyle.

Rep. Janice McGeachin, R-Idaho Falls, was one of the major players of the legislative changes, pushing through legislation to cut $35 million from the state’s Medicaid funding, one of the key measure to ensure a balanced budget for the Gem State.

But even she, as the originator of that crucial bill, says that 2011 was about fiscal restraint, as she says was demanded by Idaho voters. “I think the Republicans that were re-elected in the last election, most all us of ran on the ticket – when the economy tanked – that we were committed to cutting spending rather than raising taxes,” said McGeachin. “The outcome of that election was a pretty big affirmation of that.”

Not all House members were thrilled with some of the choices made, however.  Rep. Grant Burgoyne, D-Boise, told IdahoReporter.com that the Legislature as a whole didn’t listen to the will of the people in considering legislation. “You can’t really lead effectively if you are not listening,” Burgoyne warned.  “To lead effectively, you really have to listen to a lot of folks. Our problems are so difficult in the state … that none of us alone are going to have all the answers.”

He says that he concerned that the Legislature isn’t representing the interests of the state, but instead being lead around by a few powerful leaders with agendas already set.

The Boise Democrat, who voted against all three of Luna’s reform bills, says the package will be the legacy of the 2011 legislative session and that only time will tell if lawmakers made the right choices in that area.   “Whether it turns out to be a good legacy, or an underperforming legacy, or a bad legacy, the jury is out on that,” he mused.  “We don’t know what’s going to happen.”

Rep. Dennis Lake, R-Black, agrees that legislators will be remembered by their votes on Luna’s bills. “I think the biggest thing is that we’ve given citizens education reform,” said Lake.  “It’s controversial, and we know it is, but it sets us on a new track.”

But even Lake – who voted for all three proposals on the House floor – will be keeping a close eye on what comes now that reforms have passed into law.  “I think it all depends on how it’s implemented,” he said.

Rep. Wendy Jaquet, D-Ketchum, said 2011 was a “tough session,” but feels, even though she was on the losing side of some of the biggest votes this year, that she represented her district well.  “I think I have given my constituents a strong voice for their views,” said Jaquet. “I was on the losing side on most votes, but stayed true to my core values and the values of my constituents.”