[Vision2020] Governor Risch's Press Conference

[Tom Trail]

I received a call from Governor Risch's Office late today.  He will make a
major announcement in Coeur d" Alene tomorrow.  I suspect it will be to
announce that we will have special session on August 25th with the major
issue being discussed to be that of property taxes.

We hope that the Governor will fill in some of the details of the proposal.
 From what I've heard it is almost the same proposal that was defeated toward
the end of the last session.  The basic proposal appears to shift the
3 mil levy for school districts for M & O operations to be replaced by
a 1 % increase in the sales tax.   This will still not be enough money to
replace the money needed for schools so about $40-$60 million is being
proposed to make up the difference from the $200 million surplus.  One
must remember that this is only one time money, and the legislature has
not been known for it's outstanding support for public education.  The vast
majority of school districts are opposed to this ideas because it would
severely limit financial flexibility at the district level and also stability
that is provided under the current system.

The Idaho Tax Commission ran the figures on the proposal toward the end of the
last legislative session.   The figures indicated that only 5% of 
Idaho citizens
(those earning more than $90,000/year) would benefit from the proposal and
95% would not.  The Tax Commission also pointed out that under the proposal
that as the income level went down then these citizens lost even more from
the proposal.

The proposal is aimed at helping some upper level value homeowners, business,
agriculture, forestry, and mining with property tax relief.  One must remember
that businesses, industry, agriculture, forestry, and mining already receive
over 70 major tax exemptions in Idaho totaling some $1.6 billion/year.  These
exemptions shrink the stream of tax revenue flowing into the state and the
exemptions are in essence paid by the Idaho taxpayers.  On another note
business, agriculture, and industry receive over $140 billion in U.S. tax
exemptions a year from the federal government.

I have very serious concerns that a proposal with no public hearings is
ready to be presented to the Legislature to approve in a one day special
session.  Many of my concerns are:

   1.  Is the proposal fair and equitable to all?
   2.  What is the guarantee that if the shift to state funding is approved
       that the state will continue to fund to the level that will replace
       the 3 mil levy on school M & O?
   3.  Don't we have other legislative priorities that may be even more
       important that the property tax reform proposal?
   4.  Shouldn't we take a look at reforming our entire Idaho Tax Structure?
       (this can only be done through a series of public hearings and
        legislative debate and not in one day)

I proposed a major tax reform proposal last session (it got drowned out
in the flurry of 30 or more property tax bills).   The idea was to tax
services except for health and medical services at the 4% level.  The
elimination of several tax exemptions coupled with the taxing of services
would raise about $300,000,000 and we could still keep the sales tax at
5%.  We could use these funds for tax relief, reduce the sales tax on
groceries, and further support education--all without disturbing our
present 3 mil level for M & O.

In addition, I have legislation drafted that proposes to form a citizens
commission working with Fiscal Management, the Governor's Office, and
the Legislature to form a Citizen's Tax Exemption Review Committee.  None
of the 70 or more tax exemptions have been reviewed since 1965.  The
review process would need to take time over perhaps a three year period.
I would probably exclude production exemptions from the process.  Citizens
of Idaho need to know if the tax exemption which is a privilege granted to
an organization is worth the benefit accured to the state.  A tax exemption
is not a "right" as many organizations seem to think.

Rep. Tom Trail
-- 
Dr. Tom Trail
International Trails
1375 Mt. View Rd.
Moscow, Id. 83843
Tel:  (208) 882-6077
Fax:  (208) 882-0896
e mail ttrail at moscow.com