NIC budget uses foregone taxes

North Idaho College trustees Wednesday approved a budget that includes $1 million in foregone taxes, despite the concerns of Trustee Mic Armon and testimony from a local business group.

Armon was the only member of the five-person board to vote against the college’s proposed general fund budget of $33.1 million for the 2005-2006 fiscal year. The trustee has been vocal in his opposition to using foregone taxes – taxes that could have been collected in the past but chosen not to – since budget discussions began earlier this spring.

NIC’s general fund budget is almost 9 percent higher than last year’s.

The budget includes the maximum-allowed 3 percent annual increase over current property taxes, a total of $167,182, and nearly $350,000 in taxes from property new to the tax rolls, Rolly Jurgens, NIC’s vice president for administration, told trustees Wednesday.

Armon said he believed the college could have looked more closely at spending before opting to collect foregone taxes.

“There are other things inside the budget that could have been reviewed,” Armon said. “I’m not saying they could be cut. They could be cut or reviewed. They could be addressed before you say, ‘We got a million bucks out here – let’s go and get them.’ “

Kelly Richards, executive director of Concerned Businesses of North Idaho, was the only member of the public to comment on the budget at Wednesday’s meeting. The nonprofit tax-watchdog organization includes about 40 local businesses.

Richards applauded the college for accruing $3.5 million in foregone taxes and asked trustees to leave the full balance.

“This is not a $1 million proposal,” Richards said. “When a taxing entity uses foregone, it then inflates their budget by that amount.”

Once the base budget is increased, Richards said it can be included in the budget of each following year, along with a 3 percent increase in taxes plus property taxes on any growth in the county. The college would also have about $2.5 million in additional foregone taxes it could collect.

“It is not a practice we support,” she said.

Because the most recent information from the county reflected a larger property tax base than the college anticipated, Jurgens said the college was able to make some changes to the proposed budget before Wednesday’s meeting.

About $100,000 of the money NIC will receive through taxes from new property will go into the college’s property acquisition fund.

Trustee Judy Meyer voiced support for increasing the property acquisition fund, saying she wants the money to be available when the opportunity arises for the college to expand.

Jurgens cautioned against building up too much money in the property acquisition fund without a clear idea of where the money would be spent.

Taxpayers might think the college is overtaxing them without a purpose, he said.