Lawmakers’ actions to hit home

BOISE – From your property tax bill to your morning commute to your child’s classroom, the 2006 legislative session made changes that will touch the lives of Idahoans.

And residents will have an opportunity next month to say if they like those changes – by voting in the May 23 primary election. Every seat in the Legislature is up for election.

The session saw funding for major upgrades on U.S. Highway 95 approved; starting school teacher salaries raised to $30,000; and sweeping reforms OK’d for the Medicaid program that provides health coverage for the poorest and disabled Idahoans.

Lawmakers agreed to a constitutional amendment to ban gay marriage, tighter disclosure rules for lobbyists, and longer prison terms for sex offenders. They rejected statewide day care regulations including background checks, and an attempt to mount a legal challenge of a voter-approved Indian gaming initiative. They backed park improvements and increased field-burning.

But the issue that dominated the session was property tax. With people across the state – and particularly in North Idaho – crying out for property tax relief, lawmakers debated an array of proposals in a hard-fought debate that lasted into the final hours of the 93-day session.

In the end, the Legislature agreed to expanding the homeowner’s exemption, plus several other reforms – though not the huge shifts in the state’s tax system that some had sought. “Some good steps have been taken,” said Sen. Shawn Keough, R-Sandpoint, who co-chaired an interim committee on property taxes and pushed hard for reforms.

Throughout this session, The Spokesman-Review has tracked the “Big Six” issues each week on its Sunday legislative page. Here’s how all six came out in the end:

Property tax

With growing concerns about rising property taxes, a legislative interim committee held a dozen public hearings over the summer and recommended major reforms.

What happened: Major property tax relief bills, especially for homeowners and the poor and disabled, won approval, but not without an extended fight. An array of proposals to eliminate the property taxes that now fund public school operations, and replace them with a higher sales tax, failed to win approval from both houses – but may be back next year.

North Idaho lawmakers pushed hard for tax relief, often in the face of opposition from representatives of slow-growing eastern Idaho areas who said it wasn’t needed.

Among the bills that passed were HB 676a, to eliminate a tax loophole for some rural developers and land speculators, and HB 680, allowing some low-income seniors and disabled people to defer their property taxes until they die or sell their homes.

Lawmakers also approved HB 422, a measure to expand the “circuit breaker” tax break for the low-income elderly and disabled. And they backed HB 780, a measure quietly pushed by Reps. Frank Henderson, R-Post Falls, and Bob Nonini, R-Coeur d’Alene, to simplify Idaho’s impact fee law to better allow local governments to cope with the costs of growth.

They fought long and hard over HB 421a, the bill to increase the homeowner’s exemption, which hadn’t been adjusted for inflation since voters enacted it by initiative in 1982. In the end, the bill passed both houses overwhelmingly – with the final House vote coming in the final hours of the session.

The biggest beneficiaries initially will be those with $150,000 homes, who will be able to take a $75,000 exemption from property tax instead of just $50,000; and those with homes valued below $100,000, who will be able to count their land value to increase their exemption. Over time, as the amount rises with housing prices, all homeowners will benefit.

Though the benefit will vary widely, homeowners on average will see a $300 tax break. With fast-rising home values, that could just slow the increase in some tax bills – but the indexing will keep the tax break growing in future years as values grow.

Gov. Dirk Kempthorne praised the five-bill property tax package. “There is now property tax reform, property tax relief,” he said. “I’m satisfied with the outcome.”

School construction

The Idaho Supreme Court in December declared the state’s system for funding school construction unconstitutional, and ordered lawmakers to fix a system that now relies on local property taxpayers.

Where things stand: The House and Senate passed a GOP leadership bill, HB 743, to put about $5 million in new money into school maintenance, fully fund a bond matching program that was approved three years ago, and set up a $25 million loan fund to replace unsafe schoolhouses. Kempthorne signed the bill into law without comment.

However, to access the loan fund, a school district would have to be taken over by the state, a supervisor appointed who could fire its superintendent, and a no-vote property tax hike imposed on its patrons after they’d twice voted specifically against the increase.

“I don’t know how the Supreme Court is going to look at this – I think at best it probably buys us a year,” said Sen. Gary Schroeder, R-Moscow.

Keough helped negotiate the bill. “There are parts of the bill I don’t like,” she said. But, she said, “The bill today is a lot better than where it started in January. … It’s more inclusive.”

As for the $25 million loan fund, she said, “Now we’ve got a $25 million pot of money roped off. We can come back next year and take one or two of those ropes off. … Those are significant steps, I think – given where I started in 1997.”

Keough long has pushed for more state aid to school districts struggling with construction and repair costs – bucking her own party leadership on the issue for several years – and opposed the state’s repeated court appeals.

The Idaho Supreme Court, which retained jurisdiction over the case, will now review what lawmakers did. Depending on the court’s review, legislators could have to come back and do more – next year or even earlier in a special session.

Prisons/crime

Idaho prisons are overflowing, and were forced this year to ship more than 300 inmates out of state at a cost of $6 million a year. Meanwhile, Idaho lawmakers and state officials want to crack down on sex offenders after several high-profile cases, and impose much longer sentences.

Where things stand: The Joint Finance-Appropriations Committee approved a budget for the Department of Corrections that contains a more than 17 percent increase in general funds, a $20 million hike. The funding includes contracting with a private provider to build a new 400-bed treatment facility. Another $16 million was approved separately for a 350-bed medium-security prison expansion.

Meanwhile, tough bills lengthening sentences for an array of offenses flew through the Legislature and became law, including everything from sex crimes to drunken driving to gang membership.

Among the bills that became law was SB 1301, sponsored by Attorney General Lawrence Wasden, to set mandatory minimum life prison terms for designated violent sexual predators who re-offend, and mandatory minimum 15-year terms for other registered sex offenders who re-offend. The bill passed both houses unanimously.

None of the legislation that passed this year, however, addressed lifetime parole for designated “violent sexual predators,” though several lawmakers pushed for that before the session started. Unlike Washington, which incarcerates its designated violent predators for life, Idaho turns them loose with no supervision beyond more-frequent address registration.

Rep. Jim Clark, R-Hayden Lake, proposed a bill, but withdrew it after legal problems surfaced.

Lawmakers also didn’t designate new levels of registered sex offenders in Idaho, leaving the state with just two classifications: Violent predators, of whom there are just over 30, and all others, of whom there are more than 2,000.

However, lawmakers did pass legislation to remove some statutory rape offenders from the registration list, if they were 19 or 20 at the time of the crime and close in age to their victim.

Road construction/bonding

Last year, Kempthorne pushed lawmakers to approve his $1.2 billion “Connecting Idaho” plan, which seeks to do 30 years worth of highway construction in the next 10 years, financed by borrowing against future federal highway allocations. The first round of bonding was up for approval by this year’s Legislature.

Where things stand: Lawmakers approved a bonding plan totaling $200 million for the next 18 months, a compromise with the governor that also restores $35 million in right-of-way acquisition and engineering for a new freeway from Coeur d’Alene to Sandpoint. The compromise plan allows the state Transportation Department to shift money from one project to another if necessary.

The issue threatened to embroil lawmakers and the governor in another standoff like last year’s, in which the governor vetoed eight unrelated bills before House members agreed to pass his bonding plan. But this year, legislative budget writers, who at first had approved a more-restrictive plan that didn’t include the North Idaho freeway, compromised with the governor and added it back in. The measure also includes funding to complete upgrading the section of U.S. Highway 95 from Worley to Setters, south of Coeur d’Alene.

The bill became a legislative bargaining chip, held up until the final hour of the session as lawmakers and the governor negotiated about an array of issues.

Budget

Idaho had a projected $214 million budget surplus to start off its budget-setting decisions this year, a marked contrast to recent tight years. However, many urgent needs have been delayed during the budget crunch of recent years, from building maintenance to state employee raises.

Where things stand: Legislative budget writers set a relatively generous state budget, a 5 percent increase, including the first $1 billion-plus public school budget. For the first time in years, inflation costs were funded.

State employees got merit raises averaging 3 percent in February – an unprecedented decision to give raises immediately, rather than in the next budget year.

Sen. Dick Compton, R-Coeur d’Alene, praised the move to “get it in the hands of our well-deserving state employees as quickly as possible.”

Lawmakers also approved some additional funding to raise the pay for certain jobs where wages are lagging far below market levels, including prison guards and nurses.

A scaled-down, $11.5 million version of the governor’s $30 million-plus parks initiative was funded. As part of the plan, deteriorating buildings at Heyburn State Park will be renovated and reopened; and gravel mining at Eagle Island State Park west of Boise will pay for improvements there.

The budget also includes $4 million to battle Eurasian water milfoil, a particular problem in Lake Pend Oreille.

Overall, funding for all education programs went up by 4.3 percent, funding for health and human services was up 6.4 percent, public safety programs increased 8.4 percent and natural resources funding was up 3.6 percent. Economic development funding rose more than 6 percent, while funding for general government went up only 0.4 percent.

Education

The State Board of Education wants to require more math and science for high school students, along with a senior project and other new requirements, as part of a “redesign” of the state’s high school curriculum. State Superintendent of Schools Marilyn Howard wants more money for public schools, including pay raises for teachers. An annual poll of Idahoans found education funding was their top priority for this year’s Legislature.

Where things stand: The high school curriculum redesign failed. An outpouring of public concern over students’ ability to take elective courses prompted lawmakers to hold off, saying the plan needs more study.

The governor’s plan to expand community college services to unserved areas of the state – including the Boise area, the largest metropolitan area in the nation without a community college – ran into flak in both houses.

Senate Education Chairman John Goedde, R-Coeur d’Alene, pushed for “equity” in funding – people in Kootenai County pay property taxes to help support North Idaho College, and if new classes elsewhere in the state would be fully state-funded, Goedde wanted tax relief for his home county.

In the end, the governor failed to convince lawmakers to enact anything beyond an interim study of the issue slated for next summer – a surprising loss for Kempthorne, who let few of his initiatives slip away like that.

The school budget approved for next year includes funding for 3 percent raises for all school district employees and an increase in the minimum teacher salary to $30,000.

Overall, public schools got a 4.6 percent funding increase, and colleges and universities got 4.1 percent more in general funds.

Education funding played a major role in the debate over property tax reform, with some lawmakers raising concerns about protecting school funding while easing the burden on local taxpayers. Many noted that polls show Idahoans want property tax relief, but also make adequate funding for education their top priority.

“My goal has been to provide tax relief,” said Rep. George Sayler, D-Coeur d’Alene, a retired teacher. “I didn’t want to do harm to the schools in the process, and I hope we haven’t done that.”