[Vision2020] Fw: Additional Information on the Advisory Vote

[Sue Hovey]

MessageI just received this piece from a school board friend of mine and it seems to me to provide legitimate reasons to vote against the Advisory Vote on tomorrow's ballot.  

Sue Hovey

Subject: ATTENTION: Additional Information on the Advisory Vote


Greetings Trustees:

One more day until the elections. Per previous correspondence and the position taken by the ISBA Executive Board in September the ISBA urges you to get out the vote on the Ballot Initiative.  Our position and message.  VOTE NO.

In addition to the efforts of your association, below please find information assembled by Boise Independent School District Trustee, Orndorff.   ISBA has received a request from Dan Hollar, Boise School District PIO, to have the document distributed to all superintendents and trustees statewide.  As a courtesy to the Boise School District and Region III Boards, we request that you take a moment to review the information and disseminate as you see appropriate.

Thank you for your time and consideration in these regards.

Sincerely, 

 

Dr. Clifford L. Green

ISBA Executive Director

 

Effect on Taxpayers, State Budget and Education

Effect on Taxpayers - It is a major shift in tax policy with no net overall tax benefit.

·       Lowers property taxes [$260 million] 

·       Increases sales taxes [$219 million] 

·       Increase in income taxes - Property tax reduction will increases Federal and State income taxes on individuals and business $63 million.  Business can deduct sales tax (individuals cannot) for a $26-30 million income tax offset to business's sales tax increase.  Net overall effect - nil. 

·       Winners and losers: 

1.    A Clear Winner - Federal government will get more income taxes. 

2.    A Clear Winner - Out-of-state property owners - they get a tax windfall.  

3.    Winner - Large property owners who pay less sales taxes - subject to their buying practices on taxable goods each year. 

4.    Small loser, small winner or break-even - Covers most Idaho taxpayers.  When they make a major taxable purchase, they are A Clear Loser. 

5.    A Clear Loser - 28% of Idaho households (home renters).  They pay a 20% increase in sales tax with no property tax reduction offset. 

Effect on the State Budget - It creates a budget imbalance - squarely pits Public and Higher Education against fast growing Medicaid and Prisons for funding. 

The new law will cost $437 million to implement, 19% of the state budget, ($260 school M&O replacement, $100 stabilization fund and $77 million shortfall in FY07 sales tax collections because the cash flow will not start until December). This will be paid with: FY05 carryover of $100 million, FY06 surplus of $203 million [$133 million is one-time money] and FY07 sales tax collections of $142 million.  It saps all of the state's funding flexibility with little net benefit.  

Thereafter, it will cost $260 million annually with only $219 million new sales tax replacement money, $41 million short.  The $41 million will be paid from future surpluses (hoped-for), budget cuts or another tax increase.  

Effect on Education - It's a profound change in state and local education policy with little analysis and debate.

Except for property tax override elections, 100% of all school M&O will become the sole responsibility of the state - Some probable "unintended" consequences are as follows:

·        De facto statewide school district - shifts local control to state control

·        Shifts stable funding source to uncertain (Legislature's Joint Finance Appropriations Committee to decide future funding)

·        Funding competition with Medicaid and Prisons - education may suffer

·        Promote rich vs. poor districts - rich pass property tax overrides, poor cannot

·        Statewide teacher contract negotiations

·        Encourage spending uniformity between districts, or 

·        Encourage litigation to stop discriminatory spending practices

 



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