[Vision2020] taxes

[Mark Solomon]

Beyond the bond specific issues, the action of the Legislature to 
shift property tax burdens from industry/ag/timber to homeowners 
compounded by their deliberate action to de-fund state government, 
including employees salaries, are (in my opinion) major contributing 
factors to the bond's defeat. Idaho Statesman political columnist Dan 
Popkey captures the property tax part well in the following article. 
Please let us not forget as we discuss the school issues that if the 
state was living up to its constitutional duty to provide a thorough 
education for Idaho students the primary motivating factor for people 
to vote "no" on bond/levy issues, their pocketbooks, would diminish 
significantly. The school bond was defeated by about the same vote as 
the county courthouse remodel bond was two years ago.

Mark Solomon

Homeowners are brewing up a property tax revolt
Dan Popkey
Idaho Statesman
Edition Date: 04-24-2005


Forget about water, debt for roads and tax breaks for big 
corporations. The hot new issue is tax relief for homeowners.

The prospect of a property-tax revolt like the one that swept from 
California to Idaho in 1978 has lawmakers spooked and looking to calm 
angry taxpayers.

The nut of the problem: Property taxes have shifted to residential 
taxpayers from commercial, agricultural and other sectors. 
Residential taxpayers pay nearly 62 percent of property taxes - a 
record. The figure was 47 percent in 1990.

Residential taxes increased an average of 10 percent for the 2004 tax 
year, according to an Idaho Tax Commission study.

"We've got a grass-roots rebellion on our hands," said Sen. Shawn 
Keough, R-Sandpoint, who represents a district where taxable 
valuations on homes jumped as much as 30 percent last year.

"They're angry, they don't think their elected officials are 
responsive, and they think they were stonewalled by the House Revenue 
and Taxation Committee last session," Keough said. "They're talking 
about two things: throwing us out and passing an initiative."

Leaders of a coalition that began in Sandpoint and Lewiston were in 
Boise last week shopping a new 1 Percent Property Tax Limitation 
Initiative. The plan would cut taxes by an average 25 percent 
statewide, but with wide local swings.

Annual revenues for schools and local government would drop $290 
million from $1.14 billion collected in 2004, according to a 
preliminary estimate by the Tax Commission. That translates to a 39 
percent cut for Boise City and Ada County, where the overall average 
levy is 1.6 percent. Boise schools would lose 32 percent, but 
Meridian schools would stay whole.

House Speaker Bruce Newcomb responded with a committee to bring 
reforms to the 2006 session. Newcomb took notice while on a campaign 
trip in North Idaho last year but, distracted by water issues, he let 
the House Rev & Tax committee kill seven relief bills and create the 
study panel.

"There are strong feelings, and rightly so," Newcomb said. "We're 
going to get an initiative."

An initiative would take lawmaking out of the hands of the 
Legislature and give it to voters in November 2006. Backers plan to 
begin gathering the required 47,881 signatures by June 1, said Chuck 
Cline, chairman of Idaho Property Tax Reform. Cline, a former Nez 
Perce County commissioner, met with supporters in the Treasure Valley 
last week.

The coalition includes taxpayers in Bonner County who drew 200 people 
to the Panida Theater in Sandpoint for a rally in March.

"We're moving," said Bob Chenault, a retired TV producer who moved 
from California in 1994 and helped form Sensible Taxation of Property 
(STOP). "I don't trust the Legislature. They only do things when they 
begin to feel the jaws close around them."

Lawmakers have granted relief to other sectors with good lobbyists to 
push through complex tax breaks. Senate President Pro Tem Bob Geddes 
told me the residential tax revolt has been stoked by publicity about 
new property-tax breaks for Micron, Albertsons and other companies.

An earlier and less-publicized break - the qualified investment 
exemption - cut taxable value on industrial property by $200 million. 
Agriculture and timber also have gotten recent cuts.

Meanwhile, the homeowners' 50/50 exemption, enacted by initiative in 
1982 to account for inequities in assessments, has never been 
adjusted for inflation.

That's how residential taxpayers have come to carry 61.6 percent of 
the burden, the highest since the Tax Commission began tracking in 
1980. Agriculture (4.2 percent), mining (0.3 percent), timber (0.9 
percent) and utilities (4.4 percent) are at record lows. Commercial 
property (28.7 percent) is paying its lowest share in 21 years.

House Democratic Leader Wendy Jaquet welcomes an initiative because 
it pressures the Legislature. "There's been a huge tax shift, and the 
people need a lobbyist," she said. "The initiative will be their 
lobbyist."

There's talk of raising the sales tax a penny or more to cover school 
maintenance and operations budgets. But that does nothing to reverse 
the tax shift from business to ordinary folks. In fact, it makes 
things worse, in part because we tax food.

Rep. Dennis Lake, R-Blackfoot, is likely to co-chair the interim 
committee with Sen. Brent Hill, R-Rexburg. Lake wants to look at the 
spending side and discuss capping growth on school revenues, which 
are not subject to the same restrictions as other local governments.

Rep. Bill Deal, R-Nampa, will be named to the 14-member committee 
when it's formed in May. He proposes a constitutional amendment that 
would cap annual growth in assessments at 3 percent or less.

Local governments, saddled with growth-related expenses, will resist. 
But House Assistant GOP Leader Mike Moyle of Star said they'd better 
play ball because they'll like what lawmakers do far better than an 
initiative.

"Cities and counties are going to have to put up and help us solve 
this issue or they're going to get an initiative shoved down their 
throats they won't like at all," he said. "It's the No. 1 thing I 
hear about. People are ticked."

They should be. Policy-makers have twisted the tax knife into the 
backs of homeowners who are paying for corporate breaks.

As lawmakers scrutinize the property tax shift they've engineered, 
they would be well-advised to remember the power of the American 
dream of home-ownership. Big business has leftover cash to pay 
lobbyists to influence government, but they're no match for the 
people once they figure out they've been wronged
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