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.

The deadline to apply was Monday night, though the other House member in the district, Rep. Darrell Bolz, R-Caldwell, told the Idaho Statesman that the GOP Central Committee in the area will ultimately decide who could be in the running for the spot, meaning someone who didn’t apply could be recommended.

The committee will meet Wednesday night to decide three names to send to Gov. Butch Otter, who will choose one of the three to replace Takasugi, who passed away Nov. 6 after a prolonged fight with appendix cancer. His term ends in December 2012.

There are at least two well-known prospects for the job: Gayle Batt, who held Takasugi’s slot during the 2011 legislative session while he battled the cancer, and Kent Marmon, who most-recently lost a race for Caldwell City Council. Marmon has also run for the Legislature and the U.S. Senate in the past.

Also applying were Tom Tingey of Caldwell, Scott Syme of Wilder, and Jim Rice of Caldwell.

Otter will have to make at least one more legislative appointment prior to the 2012 session. Sen. Joe Stegner will resign Dec. 1 after being chosen as the University of Idaho’s chief lobbyist.

The position will pay $124,000 annually to Stegner and has the possibility to spike his public pension at least tenfold if he meets certain time requirements.

Nellis, in a statement issued by the school, said that while the small pool of candidates was impressive, Stegner was the most qualified of the bunch. “We were pleased that so many strong candidates recognized the importance of working with Idaho’s flagship university in serving residents throughout the state,” Nellis said. “However, Joe’s breadth and depth of experience in the legislature and business, as well as his commitment to education made him stand out from many other capable leaders.”

Gov. Butch Otter’s budget chief, Wayne Hammon, was also in the running for the post, as was the head of the Idaho Grain Producer’s Association.

Marty Peterson, who retired after holding the lobbying post for 20 years, made $51.90 an hour, annualized to be about $108,000 each year. Stegner is receiving $16,000 more than Peterson in accepting the position.

Stegner made a little more than $16,000 each year during six-and-a-half terms in the Idaho Senate.

The position – and its accompanying salary – could also spike his publicly-funded pension if he meets certain guidelines.

The state pension program, known as the Public Employee Retirement System of Idaho (PERSI), bases monthly payouts on the highest 42 consecutive months of a worker’s earnings, but it also takes into account how long that person has been employed by the state.

That means Stegner, paid a part-time salary during 13 years in the Legislature, will enjoy a pension based not on his legislative pay, but on the higher wage paid by the lobbyist position if he stays 42 months on the job.

If Stegner had simply retired at the end of next year – 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.

Not all university employees are on PERSI. If they wish, some workers can take part in the Optional Retirement Program, a defined-contribution system, rather than Idaho’s defined-benefit system. But Stegner and others are already vested in PERSI – meaning that they have a certain amount of time in the system – can remain on the state’s pension program. Lawmakers must be on PERSI five months before becoming vested, while other state workers must be on for five years.

Stegner isn’t the first one – even this year – to benefit from the 42-month provision. Former Senate Pro Tem Bob Geddes 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.

Former state lawmaker Debbie Field retired in June after spending 43 months as head of the Office of Drug Policy, a post paying $74,000 annually. It is estimated Field jumped her pension by about $1,500 a month, or $18,000 a year.

Rep. Dennis Lake, R-Blackfoot, introduced a bill to prevent pension-spiking by state legislators, but it never received a formal hearing. Lake has pledged to bring the bill back in 2012.

The vote on the alternative energy tax credit was the final piece of legislation the Senate voted on before adjourning sine die for the year.

The compromise had been worked out in the final days of the session, and Senate committees approved two plans that would extend the sales tax rebate and lower the maximum energy production level for energy projects to get a guaranteed rate from utilities.

Sen. Curt McKenzie, R-Nampa, carried the extension of the tax rebate, calling it good policy that furthers the goal of diversifying Idaho’s energy resources. He received the support of almost half of the senators.

“As I weigh what is best for the state of Idaho as we move into the future, I’m going to err on the side that this is good for our long-term energy policy,” Sen. John McGee, R-Caldwell, said during the committee hearing on the tax rebate.

Sen. Joe Stegner, R-Lewiston, voted against the rebate both in committee and on the floor. He said the state shouldn’t use tax incentives to subsidize an industry that can’t survive on its own. He was also concerned about the process of the compromise plan.

“This has been crafted by the people that will enjoy that rebate,” Stegner said on the floor.

“Something doesn’t just sit right when we vote to suspend the grocery tax and extend this tax,” said Sen. Steve Vick, R-Dalton Gardens, who opposed the plan.

McKenzie said the no vote could end future possibilities of an alternative energy tax rebate and shutter some existing wind farm projects. Roy Eiguren, a lobbyist for wind companies and board member for the energy utility Avista, said wind projects for clients he represents could end as the tax credit expires.

Stegner said that companies have already invested millions in wind farms and federal tax incentives remain, so he thinks the companies won’t scuttle their projects.

Lawmakers considered other legislation on wind energy, including a moratorium on new projects or tighter regulations for siting new projects. The tax rebate became part of the budget discussion for a short time when it appeared that it would cost the state almost $50 million . It was later revealed those rebates wouldn’t impact the state budget.

Eskridge has sponsored at least five different versions of a bill that would give renewable energy projects a sales tax rebate until the end of 2014.  Most versions of the bill were held in committee, but one managed to pass committee and the House floor.

The bill hit a roadblock in the Senate Local Government and Taxation Committee.  The chair of that panel, Sen. Joe Stegner, R-Lewiston, said that the measure might run afoul with the Idaho Constitution, because it contains language about tax policy and energy policy.  The constitution states that legislation should focus on a single subject.

The new bill, House Bill 347, focuses only on the tax rebate for renewable projects. If the bill passes the Senate and is signed by the governor, most projects would have until Dec. 31, 2014, to claim rebates.  Those who do claim rebates must have projects in production of electricity by the deadline.

Wind projects, however, would have to have all contracts signed by Oct. 31, 2011.  That provision was inserted into the legislation because stakeholders wanted to allow 18 contracts pending before the Idaho Public Utilities Commission (IPUC) finish the approval process.  A lobbyist for wind energy developers said that the 18 projects were crafted with the tax rebate in mind and that yanking the rebate could lead to some projects being cancelled.

Eskridge told colleagues that providing the incentive for projects will bring investment and additional tax dollars in to the state.

Rep. Ken Andrus, R-Soda Springs, said the state’s subsidy of wind energy should end and that the free market should be allowed to function.  “Let’s not incentivize an industry that has grown bigger than its need,” said Andrus.

Several lawmakers complained that wind energy projects would increase power rates, but one legislator said that’s not the concern of the Legislature.  “We are not in the ratepayer business,” said Rep. Bill Killen, D-Boise, adding that the IPUC is tasked with dealing with power rates.

The measure passed 47-29 and will receive a committee hearing in the Senate Wednesday and will likely be fast-tracked to help legislators end their work by the end of the week.

“I think this is the kind of legislation that will kick start our economy and get us headed in the right direction,” said Sen. John McGee, R-Caldwell. He said the lawmakers who support the plan can tout their work creating jobs, which can be a key campaign issue. “You can go to your constituents and say ‘I did something. I did something about creating more job opportunities in the state of Idaho.’”

The refundable tax credit won’t impact the state budget lawmakers are currently setting, but would affect the following year’s budget. It’s expected to shift $7.9 million in tax dollars back to employers, with the new jobs bringing in $25.3 million in tax revenues.

Sen. Joe Stegner, R-Lewiston, said the legislation has been improved from earlier attempts at a tax credit for job creation, but said he still sees logical flaws with the idea. He called the plan a bonus to businesses, not an incentive.

“The question is whether government can create and buy new jobs,” Stegner said during debate. He also raised a concern that there’s no maximum limit on how much the state would need to give back to employers, and that if a new hire earns a six-figure salary, the state could be out tens of thousands of dollars in taxes.

McGee said the approved version of the tax credit fixes many concerns, even if it doesn’t resolve Stegner’s philosophical disagreement. McGee also said those high salary workers would benefit state tax collections. “Keep in mind that a person who would be paying that much would be paying more in taxes,” he said.

Employers could get a tax credit of between 2 percent and 6 percent of their new workers’ salaries, depending on how many former employees had received state unemployment benefits. Those new hires would need also to earn at least $12 an hour and receive benefits. New workers in counties with less unemployment would need to make at least $15 an hour, plus benefits.

The tax credit would only apply to workers hired after April 15 who work for nine months, so employers wouldn’t get the tax credit until they file their 2012 income taxes. The credit would expire at the end of 2013.

The tax credit legislation heads back to the House for its approval of the Senate amendments.

The Senate Local Government and Taxation Committee agreed to send the proposed tax credit to the amending order to tweak when companies could start claiming the tax bonus for hiring new employees. The House already approved the plan.

Mark Warbis, the governor’s communications director, said the tax credit is needed because creating jobs and lowering unemployment are the top priorities of state government.

The tax credit made it farther than an earlier version, which was killed by the committee. “They’ve restructured it so that it rewards current employers that have maintained their labor force,” said chairman Joe Stegner, R-Lewiston.

Stegner said the credit would be changed so that the impact of the tax credit wouldn’t affect the state budget lawmakers are currently setting, but would hit the following year’s budget. The plan would also change so that it would apply to a new hire who works for nine straight months, rather than nine months in one calendar year.

Warbis stressed that the new version of the plan has changes based on the concerns of senators. He also will be working on the amendments that will be considered by the full Senate.

The new version would reward companies that have found ways to retain employees during tough economic times of the past few years. Companies that have a positive balance in the state’s unemployment trust fund, meaning that the company has put more into the fund than its laid-off workers have received in jobless benefits, would get a 6 percent refundable tax rebate of the employee’s salary.

Companies that have an equal showing in the unemployment fund would receive a 4 percent tax credit, while companies with a negative balance would be eligible for a 2 percent credit on new hires.

The old version gave companies a flat refundable tax credit amounting to 4 percent of a newly-hired employee’s salary, as long as the employee received wages of $12 an hour or more and health benefits.

The new plan would also require that employers in Idaho counties with high unemployment – more than 10 percent – pay workers at least $12 per hour and offer health benefits to qualify for the credit. Employers in counties with less unemployment would need to pay at least $15 an hour, plus benefits.

“This legislation is about creating jobs today and jump starting Idaho’s economy,” said Don Dietrich, the director of the Idaho Department of Commerce.

The amendments recommended by the Senate mean that if an employer hires an employee as soon as the tax credit becomes law, the employer wouldn’t be able to claim the credit until filing its 2012 income taxes. Warbis said the governor wants to get the tax credit to employers as quickly as he can.

Some of the senators questioned the value of the tax credit. Sen. Elliot Werk, D-Boise, said the state could be giving a bonus to employers who are already planning to hire new workers.

“It is what I think is a consensus piece of legislation not just for the Senate but the entire Legislature,” said Sen. Joe Stegner, R-Lewiston. He chaired the Senate committee that called for combining parts of three of the four urban renewal plans that passed the Idaho House into the amended legislation, which cleared the Senate unanimously.

The legislation now heads back to the Idaho House to approve the Senate’s changes. Stegner said the debate on urban renewal issues will likely continue for years to come.

The dozens of urban renewal agencies (URAs) across Idaho fund development and business projects by diverting some property tax money from traditional spending areas such as schools and local government. Those projects are intended to reduce blight and spur economic growth, though critics say URAs can waste tax dollars and don’t allow citizens to vote on tax policies. URAs collect $52 million a year in property taxes for their projects.

Proponents of urban renewal, including city officials who work closely with URAs, say they create much-needed jobs in Idaho.

The legislation approved by the Senate mostly adds limits to new URAs, not existing agencies. They would have a 20-year lifespan for issuing bonds on collected tax dollars. It also limits districts to expanding in size just once, with the new land being connected to the rest of the district and no more than a 10 percent size increase.

Other senators, including Democrats Diane Bilyeu of Pocatello and Michelle Stennett of Ketchum, called the plan a compromise. However, it leaves out some of the changes in other legislation passed by the House, including a provision that could let schools and other taxing districts opt out of URA plans.

Stegner’s committee considered another change to urban renewal that would require more public meetings on URA projects, but that plan was held in his committee. Two other plans that passed the House weren’t considered by the Senate, though small portions were included in the legislation that passed the Senate and now heads back to the House.

The legislation passed the Senate 27-8.  Sen. Joe Stegner, R-Lewiston, was the only Republican to join with all seven Senate Democrats in voting against the bill.

The measure, formally House Bill 260, is one piece of legislation that is critical to finalizing budgets and closing shop in Boise. The measure, already passed by the Idaho House, now heads to Gov. Butch Otter for consideration.

The proposal, sponsored by Sen. Patti Anne Lodge, R-Huston, is the trimmed-down result of an earlier measure considered in the House.  An older version of the bill would have cut about $39 million in spending.

Due to the federal matching funds for Medicaid, overall spending for the health program will be reduced by about $100 million.

Lodge told senators that the changes in the bill will help move Idaho from a fee-for-service structure to more of a managed-care plan.  Her bill would mandate that the Idaho Department of Welfare study managed care options and see what Idaho could do to move even further in that direction.

Some of the savings will come by freezing automatic payment rate increases to some health service providers.  Other funds will be saved by cutting some non-emergency Medicaid dental funds, reducing allowable chiropractic visits each year from 24 to six, altering payment rates for prescription drugs, and eliminating audiology benefits altogether.

Lodge told colleagues that instead of slashing a few programs, bill crafters decided to tweak benefit levels of many programs to blunt the impact of cuts.  “No individual receiving Medicaid benefits will lose eligibility under House Bill 260,” she explained. “Most will experience small adjustments in the amount of benefits received.”

There are no changes to services for children because the state is limited in that area by federal regulations. “Children’s programs will not be impacted by this legislation,” said Lodge.

One of the most controversial pieces of the old plan was the so-called “retirement” of those with disabilities from psychosocial rehabilitative services at the age of 45, when they would have been moved to a less-costly care program. Those testifying on the plan said that the loss of services for disabled citizens would land them in more costly intensive-care facilities, ultimately costing Idaho more money.

By removing that provision from the legislation, lawmakers reduced cuts by about $2.6 million.

The other measure axed from the original plan also dealt with cutting off services for some of the more capable – yet still disabled – citizens in Idaho.  The services are for those who are independent and can live on their own, but might still need some skill-building help from service providers.

The original plan would have completely cut the services to the more-capable citizens.  The new plan will leave the funding as is, which means about $1.8 million less in savings.

Some of the debate against the bill by Senate Democrats centered on the impact the cuts will have on Idaho’s economy.  Sen. Les Bock, D-Boise, said that the measure could cost as at least 1,000 private sector jobs. Sen. Michelle Stennett, D-Ketchum, said that Medicaid spending and the federal money involved helps sustain Idaho’s economy.

Sen. John McGee, R-Caldwell, said that Medicaid’s mission is not to ward off unemployment.  “Providing jobs is not the role of Medicaid in Idaho,” said McGee.

Bock also said that cutting some maintenance health services will mean more visits to costly emergency rooms for some.  “Why do we choose to shoot ourselves in the foot when we don’t have to?” said Bock.

Sen. Steve Vick, R-Dalton Gardens, said that slumping tax revenues from the poor economy forced legislators’ hands.  “Changes must be made,” said Vick.  “We are on an unsustainable path with the direction Medicaid is going. I wish that we could do more, but this is a step in the right direction.”

Sen. Dan Schmidt, D-Moscow, disputed Vick’s assertion, saying that the plan is nothing new.  “It is truly just more of the same,” said Schmidt, who added that the bill will lead to less care for the most vulnerable of Idaho’s citizens.  “We have choices. I cannot support this choice.”

The Senate Local Government and Taxation Committee agreed to make amendments on two pieces of urban renewal legislation, and while the committee didn’t formally adopt the changes, it did discuss them during its Wednesday meeting.

Idaho has dozens of urban renewal districts across the state that divert some property tax money from traditional spending areas such as schools and local government to fund development and business projects. They’re intended to reduce blight and spur economic development, though critics say they can waste tax dollars. URAs collect $52 million a year in property taxes for their projects.

The Senate committee agreed to move forward with House Bill 110, which would require districts to have public meetings, and House Bill 95, which would let voters approve giving urban renewal agencies the power to act. It would also limit the use of farming or forest land in urban renewal districts and prevent URAs from adding land to a district once the district is formed. Both pieces of legislation head to the amending order for changes.

However, the committee won’t consider plans passed by the House that would require URAs to provide detailed outlines before starting projects and allow some taxing districts, including schools, fire departments, and highway agencies, to opt out of URAs taxing districts. Chairman Joe Stegner, R-Lewiston, said he didn’t support those ideas and neither did the committee.

Some of the small changes in those two stalled plans could be part of the amendments to House Bill 95, including asking districts to provide more information before starting to finance a new project. The plan could also be changed to allow URAs to increase the size of their district once, as long as the new land is connected to the district and the district size doesn’t grow by more than 10 percent.

Sen. Jim Hammond, R-Coeur d’Alene, said the one-time increase would allow districts to react to events, but not keep growing during their lifespan.

House Bill 110 could be changed to clarify the purpose of the public meetings for when a URA is planning a new project and after it has finalized plan.

“I don’t think there’s anything wrong with having a public hearing, as long as there’s clarity about what that hearing is about,” said Sen. Elliot Werk, D-Boise.

The whole Senate will vote on any amendments to the plans before moving forward with the urban renewal legislation. During the amendment process, any new changes can be considered, including potentially adding more parts of the other urban renewal legislation that has stalled in the Statehouse this year.