Episode № 2 · House Bill 40 · 2025 Session
Idaho lawmakers passed the largest tax cut in Idaho history and handed the average Idaho family $127 a year. That’s $2.44 a week. $2.44 doesn’t buy a gallon of gas. It doesn’t buy a gallon of milk.
Meanwhile the state takes 33 cents out of every gallon of gas at the pump. Nobody mailed you a credit for that.
The Receipt
Result
| Bill | H0040 |
| Session | 2025 |
| House | Passed 63–7 |
| Senate | Passed 27–8 |
| Signed | Mar 6, 2025 |
District 1 Votes
| Woodward | NO |
| Sauter | YES |
| Rasor | YES |
+2
IFF Freedom Index
The Problem
Idaho used to build things and pay for them. We had good roads, schools, water systems, and a university a working family could afford. We had solid government financials with healthy surpluses. Then, the IFF got involved and drained those surpluses.
Idaho voted in a series of “largest in history” tax cuts. Five of them. They cut too much. They had to unfund $1.3B in transportation projects. They cut firefighting funds. Rural hospitals took heavy hits on reimbursement rates. Already underfunded schools took another hit. Our legislators did not do the math. And we got stuck making up the difference.
Idaho takes in more money today than ever. It gives away about a billion dollars a year in income tax it used to collect. For the average Idaho family, costs that far outweigh any tax benefit. And:
- Your kid’s school gets cut
- The wildland firefighter fund gets gutted
- Your local hospital closes its doors
- The potholes get deeper
- Property tax and rents go up
While Idaho lawmakers cut the income tax year after year, the price of a house here doubled. Income only rose half that much (inflated by the incomes of new residents). The cut lawmakers bragged most about gave the average Idaho family $2.44 a week back to their pockets.
Pressure and propaganda from the Idaho Freedom Foundation (IFF) pushed these bills through. And it wasn’t for our benefit. Twenty-seven senators voted for House Bill 40. Two Republicans voted no. One of them was Jim Woodward, of Sagle.
Woodward warned that the decades-long efforts to build rural water systems, roads and schools would be cut short “because the Legislature got too aggressive cutting taxes.” Turns out he was right.
What House Bill 40 Did
- Pretended to put money in Idaho pockets while removing critical services.
- Took $1B from state revenue for mostly wealthy Idahoans.
- Pushed costs onto cities and counties where they show up as levies or parking meters.
- Made across the board cuts in agency budgets despite higher costs and growth.
How the IFF Influenced the outcome
The Freedom Index has an agenda. Legislators get points for cutting spending, even when that spending saves money.
The IFF originally scored HB 40 at +3. But they took away a point for the military pension exemption. They didn’t want to help veterans on fixed incomes? That’s a demerit by IFF rules.
There is no way to earn a good grade from the IFF and still keep the hospitals open. That is not a flaw. It’s the point of the scorecard.
The Pattern
Since 2018
| House costs | ▲ 99% |
| Incomes | ▲ 45% |
| Wealthy moving in | ▲ UP |
YOU PAY MORE
The net result
Anticipated Effects on District 1
The gap between the poorest and the wealthiest grows. The effective tax rate climbs for the poorest and drops for top earners.
- People who work here cannot afford to live here.
- Our infrastructure becomes less resilient. Transportation corridors become more congested. Maintenance is neglected.
- Our local economy becomes less diverse as AG, Timber, and other businesses are squeezed, replaced by developers.
- Local wealth is drained off by companies and people who don’t live here.
- Local nonprofit capacity is weakened. We stop funding the future because we are too busy funding emergencies.
- Governor Little announced that Idaho preserved its AAA credit rating, While true, a AAA measures only whether Idaho can pay back what it borrowed. Idaho lowered expectations and ordered agencies to spend less, and we met those lowered expectations. The creditors got paid back. Doesn’t mean we are healthy.
- The state budget grew by 60%. Part of that “spending” is tax relief and rebates passing through the state budget back to taxpayers. Idaho is experiencing crazy growth. Prices went up. Even the Gem State Chronicle, using IFF numbers, says the 60% figure doesn’t account for inflation and population growth. What did we spend it on and did we get our money’s worth?
Sources: House Bill 40 text and roll calls — Idaho Legislature, 2025 session; House Journal Feb. 3, 2025 and Senate Journal Mar. 4, 2025. “Low taxes” and “2nd Lowest Property Tax in the Country” — Idaho Department of Commerce. 43.03% of improved residential parcels not owner-occupied — Bonner County Assessor, March 2023, in the Bonner County Comprehensive Plan housing chapter, adopted July 2023. IFF score of +2 and the military pension deduction — Idaho Freedom Foundation, Parrish Miller, Jan. 27, 2025. “Take the natural growth in sales and income taxes at the state level…” — Idaho Freedom Foundation, “Zero Property Tax Would Be a Good Look.” State party platform adopting property tax elimination — Idaho Capital Sun, June 24, 2026. Agency budget cuts of 4% and 5% — Idaho Capital Sun, April 2, 2026. FHFA All-Transactions House Price Index for Bonner County (series ATNHPIUS16017A) and BEA per capita personal income for Bonner County (PCPI16017), both via FRED. Federal, free, and permanent links.
You’re the boss. Vote like it.
Make a plan to vote — November 3, the whole ballot, all the way down. My name, Larson, can be found near the bottom. Don’t succumb to voter fatigue syndrome.
When the political mailers come in the mail, don’t swallow the hogwash. Follow the money. Read the small print. See who paid for it.
Paid for by Larson for Idaho.
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