The big combo property tax reform bill, HB 876, just cleared the Senate Local Government & Tax Committee on a 5-4 vote, after more than an hour-long hearing in a surprisingly packed Gold Room – the Capitol’s largest hearing room – despite just moments of notice before the meeting began.

“There’s a little bit of something in there for everybody,” said Sen. Stan Williams, R-Pingree. The bill includes raising the homeowner’s exemption to $75,000, removing the $3 per $1,000 property tax levy for school operations, and raising the sales tax to 6.25 percent to cover the lost school funding plus set up a $12 million school emergency fund to hedge against short revenues in the future.

Sen. Curt McKenzie, R-Nampa, said he was supporting moving the bill out of committee and to the full Senate without recommendation to let the full Senate vote – partly because there are no senators from the Panhandle on the committee. “My friends in the northern part of the state have asked me to let them vote on this issue,” McKenzie said.

Sen. David Langhorst, D-Boise, opposed the bill, saying it would result in an overall tax increase for lower-income taxpayers. “It seems like a hoax,” he said. “The people we are trying to offer relief to are the ones who will see a tax increase, and I can’t vote for that.”

Committee Chair Hal Bunderson, R-Meridian, opposed the bill, saying lawmakers don’t know the full, long-term impact of the changes it makes in the state’s tax structure. Plus, he said, it would reduce local control of schools. “We have taken a significant step away from local control when we make these kinds of financial decisions for our schools,” Bunderson said.

The Senate may vote on the bill in the morning.

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