The Idaho Freedom Foundation’s Wayne Hoffman has an interesting way to eliminate the state’s $130 million surplus.

Give it back to the taxpayers — all of it. Then, add another $70 million refund to the taxpayers. Happy New Year.

Of course, his idea isn’t going anywhere — at least, not to the tune of $200 million. Gov. Butch Otter said in his State of the State address that legislation to cut the base tax rate employers pay for unemployment insurance ($46 million in the coming year and $116 million over three years) is sufficient. The co-chairs of the Joint Finance-Appropriations Committee, Sen. Shawn Keough of Sandpoint and Rep. Maxine Bell of Jerome, don’t appear eager to make room for massive tax cuts as they work on the budget.

But in Hoffman’s world, there’s no need for reality to get in the way of a perfectly good political fantasy. He says that cutting taxes should be the Legislature’s top priority this year, and chides Otter for not joining the cause.

“Idahoans deserve the conservative government they voted for,” Hoffman said after Otter’s State of the State address. “The governor’s budget doesn’t deliver on that. His budget grows government by nearly 9 percent and offers zero tax relief.”

A year ago, when economic conditions were similar, “They spent every penny they could,” Hoffman said. “State employees got a pay raise. Their insurance cost increases were covered. Public schools and everyone else got big spending increases. You (taxpayers) got nothing.”

Giving money back, Hoffman says, would go a long way toward refueling the economy, while increasing the ability of companies to hire and invest.

Keough offers reasons why major tax cuts should not happen. While the revenue picture looks promising, she said, “We are only halfway through our fiscal year, and sometimes we get surprised in the second half.”

These “surprises” often lead to holdbacks, layoffs and other budget-cutting measures.

For now, the times are relatively good and Keough continues to hear plenty of noise from those wanting to beef up funding for education, fixing roads and bridges and improving the quality of state services overall. Hoffman is not without friends on the tax-cut side. Assistant Majority Leader Brent Crane of Nampa told reporters recently that cutting taxes will be the “first thing out of the box” during this session and House Speaker Scott Bedke agrees there should be some tax reductions. The Joint Finance-Appropriations Committee has at least two new members from North Idaho — Sen. Mary Souza of Coeur d’Alene and Rep. Sage Dixon of Ponderay — who are friendly to the idea of tax cuts.

“North Idaho is still struggling,” Souza said. “If we as a state can look more closely at how we are spending money, then maybe we can lower some of our taxes that keep businesses away.”

One area Souza will be watching is the hiring of additional full-time employees.

“It does get my attention, as a small-business owner for more than 32 years, that almost every appropriation had additional full-time people,” she said. “All small-business people know that adding employees is a big decision. You pay the benefits and training to go with it, and those positions will never go away. Yet, I see budgets with two, three, four and six additional employees for almost every appropriation. I’m not saying these positions are not valid — it’s just something that catches my eye.”

Dixon said a $130 million surplus is not all about spending more money.

“I would like to have more tax breaks,” he said. “I’d like to reduce the number of tax brackets and get to essentially a flat tax. The grocery tax is a big thing we keep talking about, but can’t seem to make it happen. Ending the grocery tax would have a substantial effect on a lot of people.”

Hoffman calls on legislators to have a different mindset going into the session. “Lawmakers of late have liked to frame tax relief in terms of what such relief would mean for the state,” he said. “But tax policy should be, first and foremost, about letting people keep the money they earn, not determining whether or how the government benefits.”

It will be up to the Legislature to determine if, or how much, society benefits from a well-funded government.

Let the wrangling begin.

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Chuck Malloy, a longtime Idaho journalist from the Silver Valley, is a columnist with Idaho Politics Weekly and an editorial writer with the Idaho Press-Tribune.