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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">ADVISORY VOTE ON PROPERTY
TAX<o:p></o:p></FONT></FONT></B></P>
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</SPAN>In the August special session, the majority of <?xml:namespace prefix =
st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:State
w:st="on"><st1:place w:st="on">Idaho</st1:place></st1:State> legislators
approved a tax shift.<SPAN style="mso-spacerun: yes"> </SPAN>The 0.3%
property tax assessment for support of public school maintenance and operations
was dropped.<SPAN style="mso-spacerun: yes"> </SPAN>In an attempt to
replace the revenue lost, the sales tax has been raised from 5% to
6%.<o:p></o:p></FONT></FONT></B></P>
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">On November 7 YOU will be asked to weigh in on this
issue.<SPAN style="mso-spacerun: yes"> </SPAN>As your representative, I
have studied it closely. <o:p></o:p></FONT></FONT></B></P>
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<P><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">"Should the State
of <st1:place w:st="on"><st1:State w:st="on">Idaho</st1:State></st1:place>
keep the property tax relief adopted in August 2006, reducing property
taxes by approximately $260 million and protecting funding for public
schools by keeping the sales tax at 6%?".<o:p></o:p></SPAN></P></TD></TR>
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<P><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"><o:p> </o:p></SPAN></P></TD></TR></TBODY></TABLE>
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">The wording encourages you to say “of course!”<SPAN
style="mso-spacerun: yes"> </SPAN>But read on – there’s more to the
story.<o:p></o:p></FONT></FONT></B></P>
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Tax issues are very complex.<SPAN
style="mso-spacerun: yes"> </SPAN>A good visual image involves picturing a
balloon – when squeezed in one area, another part bulges.<SPAN
style="mso-spacerun: yes"> </SPAN>The maneuver adopted by legislators in
August is a <U>tax shift</U>.<SPAN style="mso-spacerun: yes"> </SPAN>It
provides no additional support for education.<o:p></o:p></FONT></FONT></B></P>
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">How are tax payers affected by this shift?<SPAN
style="mso-spacerun: yes"> </SPAN>Economists know there are winners and
losers.<SPAN style="mso-spacerun: yes"> </SPAN>Some citizens will see a
net tax increase – the affect of the increased sales tax will be greater than
the decrease in property taxes.<SPAN style="mso-spacerun: yes"> </SPAN>In
general, individuals in middle to lower income classes will be
losers.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Facts to be considered:<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Home renters constitute 22% of <st1:place
w:st="on"><st1:State w:st="on">Idaho</st1:State></st1:place> households.<SPAN
style="mso-spacerun: yes"> </SPAN>They will pay about $10 million more
sales tax, with little or no offsetting income or property tax
relief.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Other groups who will tend to be losers include low
income seniors and residents of rural communities.<SPAN
style="mso-spacerun: yes"> </SPAN><SPAN
style="mso-spacerun: yes"> </SPAN>Those who pay more are often the least
able to bear it.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">This is a concept that has been tried.<SPAN
style="mso-spacerun: yes"> </SPAN>It did not work.<SPAN
style="mso-spacerun: yes"> </SPAN>In 1996, legislators shifted $40 million
of school support from property tax to sales tax.<SPAN
style="mso-spacerun: yes"> </SPAN>The amount required for property tax
replacement grew each year. It was eventually capped because of the effect on
the state general fund.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Because of the complexities of the property tax, higher
assessments do not necessarily translate to higher taxes.<SPAN
style="mso-spacerun: yes"> </SPAN>Generally, tax <U>rates</U> may decline
when there are valuation increases. <o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">The additional $260 million state obligation causes k-12
and Higher Education to compete with Health and Welfare and Corrections for
state budget money.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">The tax savings advertised is overrated.<SPAN
style="mso-spacerun: yes"> </SPAN>The amount reported, $50 million, does
not consider the federal and state income tax effect for those who itemize.<SPAN
style="mso-spacerun: yes"> </SPAN>They will claim lower property tax
deductions.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Part of the legislation passed in the special session
puts $100 million in a public school “rainy day” fund.<SPAN
style="mso-spacerun: yes"> </SPAN>Supposedly, this will protect education
during economic downturns.<SPAN style="mso-spacerun: yes"> </SPAN>We can
be assured those downturns will occur.<SPAN style="mso-spacerun: yes">
</SPAN>Economists from our three major universities expect this.<SPAN
style="mso-spacerun: yes"> </SPAN>In the downturn of 2002, the state
emptied all stashes of money available.<SPAN style="mso-spacerun: yes">
</SPAN>Even that didn’t stop holdbacks, where schools and other agencies lost
important state support.<o:p></o:p></FONT></FONT></B></P>
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman"><U>Most of the money from this tax shift does not go to
relief for homeowners property taxes.</U><SPAN style="mso-spacerun: yes">
</SPAN>Primary homeowners received only 40% of the property tax relief provided
through this shift.<SPAN style="mso-spacerun: yes"> </SPAN>60% of the
property tax relief, about $156<o:p></o:p></FONT></FONT></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt 0.5in"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">million, goes to groups such as industry, speculators,
utility companies, and second homeowner investors.<SPAN
style="mso-spacerun: yes"> </SPAN><o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">It is important that our system of taxation be fair and
that it provide adequate revenue for important programs.<SPAN
style="mso-spacerun: yes"> </SPAN><st1:State w:st="on"><st1:place
w:st="on">Idaho</st1:place></st1:State> needs to work on both of these
issues.<SPAN style="mso-spacerun: yes"> </SPAN>There are millions of
dollars of tax exemptions and exceptions that have been given special interests
over the years.<SPAN style="mso-spacerun: yes"> </SPAN>These should be
evaluated, and many should be eliminated.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">It is doubtful that this tax shift helps with
fairness.<SPAN style="mso-spacerun: yes"> </SPAN>Middle class families
will be picking up the tab for breaks given to Micron, Avista Power, Simplot,
and some of the states biggest developers.<SPAN style="mso-spacerun: yes">
</SPAN>We should study the magnitude of breaks already in place for these groups
before enacting a tax policy that gives them even
more.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">We need to address property tax issues, and other aspects
of taxation.<SPAN style="mso-spacerun: yes"> </SPAN>There were attempts to
introduce a variety of ideas during the 2006 legislative session and during the
special session.<SPAN style="mso-spacerun: yes"> </SPAN>Republican leaders
seized upon this particular tax shift and showed no curiosity about anything
else.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">When a legislative committee held a public meeting in
<st1:City w:st="on"><st1:place w:st="on">Moscow</st1:place></st1:City> last
summer, the vast majority of those attending were more concerned about funding
for education than property tax changes.<SPAN style="mso-spacerun: yes">
</SPAN>Last summer, when your legislators from <st1:place
w:st="on"><st1:PlaceName w:st="on">Latah</st1:PlaceName> <st1:PlaceType
w:st="on">County</st1:PlaceType></st1:place> held a community meeting to hear
opinions of voters, the message was consistent.<SPAN
style="mso-spacerun: yes"> </SPAN>The concern was for funding education
and other programs rather than property tax
relief.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT
face="Times New Roman">Senator <st1:City w:st="on"><st1:place
w:st="on">Gary</st1:place></st1:City> Schroeder, Representative Tom Trail, and I
opposed the tax shift during the 2006 legislative session, and during the
special session.<SPAN style="mso-spacerun: yes"> </SPAN>We were in
agreement that it was not the best solution for <st1:place
w:st="on"><st1:PlaceName w:st="on">Latah</st1:PlaceName> <st1:PlaceType
w:st="on">County</st1:PlaceType></st1:place>.<SPAN
style="mso-spacerun: yes"> </SPAN>Of those who contacted us on the issue,
the majority asked that we oppose it.<o:p></o:p></FONT></FONT></B></P>
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style="mso-bidi-font-weight: normal"><o:p><FONT face="Times New Roman"
size=3> </FONT></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><FONT size=3><FONT face="Times New Roman">A
study of <st1:State w:st="on"><st1:place w:st="on">Idaho</st1:place></st1:State>
tax laws, and thoughtful modifications, should be a top priority.<SPAN
style="mso-spacerun: yes"> </SPAN>Please vote NO on the advisory
vote.<SPAN style="mso-spacerun: yes"> </SPAN>Tell <st1:State
w:st="on"><st1:place w:st="on">Idaho</st1:place></st1:State> legislators you
want a better system – one that is fair and adequate.<SPAN
style="mso-spacerun: yes"> </SPAN>(The Legislature is not obliged to act
upon the advisory vote, but this is an opportunity to send a
message.)<o:p></o:p></FONT></FONT></B></P></FONT></DIV></BODY></HTML>