BOISE - The biggest surprise in Gov. Butch Otter's State of the State address last week was his target for tax cuts to spur job growth.

"He kicked it to the Legislature, basically saying, 'Here's your box of Legos,'" said House Assistant Majority Leader Scott Bedke, R-Oakley, who also sits on the House Revenue & Taxation Committee. "I'm not telling you what it looks like, but build something."

Revenue & Taxation Chairman Dennis Lake, R-Blackfoot, had advance word there would be a target but said, "I was surprised it was that high."

The $45 million ante was good news for the Idaho Chamber Alliance, a group of 22 chambers of commerce with almost 11,000 business members across Idaho.

"That was manna from heaven," said alliance lobbyist John Watts, adding that he had been working on a revenue-neutral plan to trim exemptions and lower corporate and individual income tax rates.

As welcome as Otter's endorsement was, Watts fears opening the toy box could have a downside. "Do we lose an opportunity to do something really effective because there are so many ideas out there?"

Senate President Pro Tem Brent Hill, R-Rexburg, said that fear is unwarranted. A former chairman of the Senate tax committee, Hill said the target is a blessing.

"There were numbers all over the board, from raising taxes to cutting them by $250 million," Hill said. "I think it's going to let us focus on the method rather than spending all this time arguing about how much it should be."

The House is traditionally more hawkish on tax cuts, in part because of three former skeptical Senate tax chairmen: Hill, Hal Bunderson of Meridian and Joe Stegner of Lewiston.

Hill named a new chairman last month to replace Stegner, who resigned to become a lobbyist for the University of Idaho. The new chief is Sen. Tim Corder, R-Mountain Home.

Corder still wears the skeptic's robe but is reaching out to the House. He said he seeks to "repair all those impediments to good policy discussions," and proposed a joint hearing with the House committee.

Though the House jealously guards its constitutional power to start all revenue bills, Lake agreed to the hearing. The session - with testimony from invited groups - will be held after the Legislature sets revenue estimates.

In 2008, the Idaho Association of Commerce and Industry, which packs a big punch for big business, tried to defeat Corder with an independent campaign. IACI found Corder's views on tax policy hostile to business. That unpleasantness is the past, Corder said: "I have a large agenda, and vendetta isn't on it."

Rep. Wendy Jaquet, D-Ketchum, is a veteran of House-Senate tax committee disharmony, with the House inclined to cut taxes and the Senate aiming for broader reforms, including ending some exemptions. She said a joint meeting may help. "It's a big deal and I commend House leadership and Chairman Lake for being willing to do it."

Senate GOP Caucus Chairman John McGee, R-Caldwell, is a member of the tax committee and was an aide to former Gov. Dirk Kempthorne. He said the House-Senate relationship is warming and that Otter was wise to leave details to lawmakers. "He knows that sometimes we have to fight these battles amongst ourselves."

Otter's office produced the most popular document of the Legislature's first week, a single page known as the "Green Sheet."

It outlines the cost or gain of making four tax changes: eliminating the personal property tax; lowering individual and corporate income tax rates; killing the investment tax credit; and eliminating the grocery sales tax credit.

"There are those who would like to take a holistic approach and make major changes," Lake said. "Maybe get into exemptions and use this $45 million as part of the grease to facilitate it."

Ending the grocery tax credit would free up $126 million in income-tax rebates now used to offset the sales tax on food. But it's politically dicey because it benefits low-income taxpayers most, and Otter is passionate about increasing the credit.

Still, Hill said that idea should be on the table as a means to lower rates. He added that bringing in another $50 million from a cigarette tax increase could make a relief package larger.

Whatever the mix, Republicans say stimulating jobs is the top priority. "I want to see which idea will gain us the most as far as bringing businesses in and building and expanding existing business," said House Speaker Lawerence Denney, R-Midvale.

House Majority Leader Mike Moyle, R-Star, is a longtime advocate of big tax cuts. In 2010, he and Rep. Marv Hagedorn, R-Meridian, proposed cutting corporate and individual income tax rates by a third over a decade, with a cost of $250 million annually in the 10th year.

They did so even as revenue had fallen 15 percent, saying the cuts would stimulate business. Critics countered that tax hawks would win either way: If revenues rose, great; if they fell, their aim to shrink government would be nourished.

Moyle is playing things close to his vest, as are many key House leaders, including Bedke and GOP caucus Chairman Ken Roberts, R-Donnelly.

"I'm not going to say anything for a while," Moyle said, as Roberts gestured to put tape over Moyle's mouth. "You don't tell everything when you're strategizing."

Moyle said he hoped that he, Roberts and Bedke - all tax committee members - could agree on a plan. "Right now this is very fluid. We've got to give it time for the water to seek its own level."

Democrats are unconvinced that tax cuts mean jobs. They say restoring infrastructure, including schools that suffered unprecedented cuts in recent years, is more important. Otter's budget boosts general-fund spending by 2.6 percent. But for all funds, he recommends an overall cut in K-12 spending of 1.5 percent.

"I'm waiting for somebody to explain how cutting the top income tax rate by two-tenths of 1 percent makes jobs happen," said House Minority Leader John Rusche, D-Lewiston.

Chairman Corder said he wants relief that doesn't risk repeating the experience of 2001. That year, lawmakers cut income taxes. Two years later, amid the post-9/11 recession, they raised the sales tax by a penny to stave off cuts to schools. "I want to see those things that can prove (they) will bring sustainable business and sustainable jobs."

With a surplus for the first time in four years, Otter proposes earmarking $60 million to restore depleted state savings accounts. He also suggests 3 percent one-time pay increases, contingent on the state hitting revenue targets.

Lawmakers' doubts about Otter's revenue projections may be the biggest impediment to tax relief. The governor predicts 5.8 percent growth in fiscal 2013, a figure many find too optimistic.

The Joint Economic Outlook and Revenue Assessment Committee was to have voted Thursday to set a benchmark for budget writers. The 18 members had already submitted their estimates: The median was 3.5 percent growth. Revenue growth at that level would not produce the $45 million earmarked by Otter.

The meeting was canceled with one day's notice. "We just wanted more time to see what the governor wants to do," Speaker Denney said. "What's he really want us to budget to?"

Denney said he's pleased to see Corder and Lake working together but cautioned against reading that as an assurance that tax cuts will happen this year.

"My confidence is not very great," he said. "I'm not sure that there will be."