House pushes for tax relief
BOISE – The Idaho House tried a last-ditch attempt Monday to force the Senate to go along with a plan for $104 million in annual property tax relief.
“Whether the Senate will consider it, of course, is a real question,” said Rep. George Sayler, D-Coeur d’Alene. “If it goes through, we have achieved a fairly significant tax-relief program, and if it doesn’t, we have more work to do.”
The House decided to amend an unrelated Senate bill, SB1404, to include removing half the property tax levy that funds basic school operations. Earlier, it had passed a bill, HB678, to do the same thing. But it is bottled up in a Senate committee.
“We walked in the door with a $222.6 million surplus, and if we can’t find some dollars in there to give some peo-ple some property tax relief in this state, we have gone awry,” said Rep. Ken Roberts, R-Donnelly, the measure’s sponsor. “It’s time that we do this. … We need to honor the taxpayers of this state and give some property tax relief.”
The vote was 53-16 – with every Panhandle legislator in districts 1 through 5 voting in favor – but some lawmakers spoke out against the move.
“I don’t like the idea of trying to fund property tax relief on the backs of the schools,” said House Minority Leader Wendy Jaquet, D-Ketchum.
The measure, in addition to eliminating half the school property tax levy, would cap growth in the remaining half at 3 percent a year. It also would direct all state revenues over an 8 percent growth factor into a fund for increased property tax relief.
If the bill were passed by both houses, the Joint Finance-Appropriations Committee would have to reconvene to fund the $104 million shortfall for public schools.
HB678 envisions that part of that shortfall would be made up by a half-cent increase in the sales tax, contained in a companion bill, HB679. That bill also is sitting in the same Senate committee as HB678 is.
Senators could choose to revive it, or lawmakers could fund the school shortfall by shifting money from the $105 million budget stabilization fund, or “rainy day” reserve fund, which they filled earlier in the session. They also could tap into state tax revenues that have been coming in ahead of projections to the tune of as much as $47 million.
Sayler said, “If it goes through, we’ll have to be vigilant in protecting the schools.”
Sen. Shawn Keough, R-Sandpoint, who drew a crowd of House members when she went to the chamber after the vote to find out about the new bill, said, “I don’t want to short the schools in any way. I won’t do that.”
Keough said she is hearing an outcry from constituents who want major property tax relief and are worried that lawmakers won’t come through with it this year. She said she planned to study the numbers and the bill overnight before deciding how to proceed.
Rep. Frank Henderson, R-Post Falls, called the House’s latest attempt “an excellent first step.”
Henderson said the real problem is how Idaho values residential property when prices are rising quickly. “The problem is so complex, it isn’t solved by one stroke,” he said.
Still pending in the House is HB421a, legislation to raise the homeowner’s exemption from its $50,000 maximum to $75,000 and index it to inflation. Sayler said that bill offers significant property tax relief for homeowners in the long term because of the indexing.
The homeowner’s exemption bill has passed both houses with strong votes; it awaits only a final House vote to concur in Senate amendments.
Sayler told the House there are things he doesn’t like about the newly amended SB1404, but he said he’ll support it. “We’ve hit a dead end on other options,” he said.
The House vote Monday came on the 92nd day of the legislative session – a session that now is the third-longest in state history, exceeded only by the 95-day session in 1983 and 2003’s record-breaking 118-day session.