A House bill that aims to spur economic growth through tax cuts and incentives for businesses would cost the state nearly a billion dollars when fully implemented in 2017, according to a report by legislative budget analysts.
The measure, H2250, which passed the House on Jan. 28, would reduce individual and corporate income taxes on a staggered basis starting in 2012. It also would phase out the state property tax.
According to the Joint Legislative Budget Committee, the total loss by 2017 would be about $940 million. Reducing the individual income tax by 10 percent will cost the state $361 million. A reduction in corporate income taxes will cost about $200 million. Eliminating the state property tax will cost about $302 million.
The Joint Legislative Budget Committee said the report reflects a “static” analysis that doesn’t account for new business that the tax cuts will spawn.
A model used by other states showed the economy will generate between 5 and 18 cents for every $1 in tax cuts.
The report was made public on Feb. 12. The House had tried earlier in the week to tack H2250 to a budget bill being considered during special session. But Senate President Bob Burns said the bill would not get a hearing in the Senate until all budget work was finished.