Archive for August 2006
How is it that Cabela’s, the sporting goods retailer, could have gotten a ruling from the Idaho Tax Commission that it doesn’t have to charge sales tax on its Internet and catalog sales to Idaho residents even though it now has a store in Idaho, which usually triggers the sales tax requirement? When there’s no such ruling for other Idaho retailers such as Coldwater Creek in Sandpoint?
Here’s how: A 1992 U.S. Supreme Court decision, Quill Corp. vs. North Dakota, laid out the standard that companies have to collect state sales taxes if they have a “nexus,” or a physical presence, in the state. Idaho Gov. Jim Risch, a lawyer, says based on that decision, some companies have set up their corporate structures to show no connection between their remote sales and their in-state retail stores. “They used the U.S. Supreme Court decision to construct entities,” Risch said. “They have been successful in disconnecting the nexus of catalog sales. I’m not saying that’s right, but that’s what they have done.” He added, “The solution … lies not within the state of Idaho, it lies within the halls of Congress and the Supreme Court.”
However, a 2005 appeals court decision in California, Borders Online vs. State Board of Equalization, narrowed the loophole. In that case, the court held that because Borders Online let its customers return or exchange merchandise at their local stores, there was, in fact, a “nexus” between the two companies, and sales tax had to be charged.
This whole area is in hot dispute these days, and only a new federal law or another U.S. Supreme Court ruling will put it to rest.
Gov. Jim Risch signed HB 1 into law this morning in his office, and he was all business – though an array of supportive legislators (plus state superintendent of schools candidate Tom Luna) were lined up behind him, Risch didn’t pause to provide them with souvenirs. (Former Gov. Dirk Kempthorne, in similar situations, often would sign just a part of his name with one pen, hand it to a supporter, and then do the same for the next supporter, so each got a pen that was used to sign the bill into law.) Risch just quickly signed the bill. “There it is,” he said. “There was concern about whether it would get a complete public hearing, or whether there would be a debate.” Turning to the legislators, who fought through a 15-hour-plus special session on Friday to finally pass the bill well after 11 p.m., Risch said, “Anybody here think there wasn’t a debate?”
Gov. Jim Risch plans to sign HB 1, the tax bill passed in Friday’s 15-hour-plus special session of the Legislature, tomorrow morning at 9 in his office. He’ll also be in Coeur d’Alene later in the morning.
Decorated Vietnam War veteran Max Cleland, a former U.S. senator and former head of the Veterans Administration, today endorsed Democrat Larry Grant for Congress and announced he’ll come to Idaho Oct. 16 for a Democratic Party campaign dinner and rally in Nampa at the Idaho Center. Cleland lost both his legs and his right arm in a grenade explosion while serving as a captain in the U.S. Army in Vietnam in 1968, then went on to become an outspoken advocate for veterans and youngest VA chief ever. His political career included many years as Georgia’s secretary of state, and then as a U.S. senator. He also served on the presidential commission that investigated the 9/11 terrorist attack.
“Larry Grant is the type of Congressman our nation needs at this critical time in its history,” Cleland said in a statement. “We’ve got to get the country back on track, back on the long and steady road to being the country we can be proud of.” Grant responded, “I’m honored that Sen. Cleland is endorsing me. His legacy of service to the country is one that we should all strive for. He’s a genuine hero. It is the example of leaders like Sen. Cleland, like Sen. Frank Church, and President John F. Kennedy that fostered my interest in public service. Each of us has to give something of ourselves in order to keep our country strong and moving forward.”
Cleland is the latest national figure to take a hand in campaigning in the hot 1st District congressional race. Already, Vice President Dick Cheney has appeared in Boise at a fundraiser for Republican Bill Sali, and U.S. House Speaker J. Dennis Hastert campaigned for Sali at a breakfast fundraiser in Post Falls.
The Idaho Supreme Court has ruled that a state agency can’t keep public records secret simply by handing them over to someone else and saying they’re no longer in the agency’s possession.
“These documents are clearly public records that are not expressly exempted by statute, regardless of whether ISDA (Idaho State Department of Agriculture) retains possession of them,” Justice Linda Copple Trout wrote in the court decision filed Monday. The 3-2 decision also noted that the court was “not persuaded by the ISDA’s attempts to circumvent these statutes.”
The case involved a lawsuit by the Idaho Conservation League against the state Department of Agriculture because the department refused to disclose nutrient management plans – plans showing how large quantities of manure and wastewater would be disposed of – for beef cattle feedlots. The department cited a law that requires its staff to give all copies of the required plans back to the feedlot operators after they’ve reviewed and approved them. “The department made a good-faith effort to comply with statute,” department spokesman Wayne Hoffman said Monday. “From time to time, courts hand down decisions that require agencies to re-evaluate how they do business.” Hoffman said the department still is reviewing the decision.
Justin Hayes, program director for the conservation league, said, “Average citizens just want to know that the waste that’s being generated is being disposed of properly, in a way that’s not going to harm their air quality or their water quality or result in blankets of flies smothering their grandchildren when they come over for a picnic.”
“When ISDA tries to hide these things from people, it makes people very angry at their government,” he said.
A district court had reached the same conclusion, but the state department appealed to the Idaho Supreme Court. The Supreme Court ordered the department to pay the league’s attorney fees for the appeal, concluding that the department’s appeal was “frivolously pursued” because it focused on who had possession of the records – not on whether the records were public or not.
The court wrote, “A state agency is expressly prohibited from preventing examination of a public record ‘by contracting with a non-governmental body to perform any of its duties or functions.’ … This statute indicates a clear policy by the Legislature that the public has a right to view and inspect records relating to the public’s business and this right cannot be denied by the expediency of having some other entity conduct the public’s business at some other location.”
The feedlots in question don’t include dairies, though mega-dairies and the waste they produce have been a hot issue in southern Idaho. Both Hayes and Hoffman said nutrient management plans for dairies have routinely been released to the public. Only feedlots for beef cattle were affected by the law about returning the plans to the operators.
Hayes hailed the court ruling. “A state agency and the Legislature tried to open up a huge hole in the Idaho Open Records Law by basically farming out documents,” he said. “That was a blatant attempt to make it hard for citizens to learn important information to protect their quality of life.”
Among those with predictably differing views on the special session of the Legislature on Friday are Gov. Jim Risch, who called the session and pronounced it a success, and former Congressman Larry LaRocco, Risch’s election opponent in November’s contest for lieutenant governor.
“Yesterday’s session was a body blow to democracy and it was a frontal assault on education,” LaRocco said on Saturday. “Our families are deeply concerned about the priorities endorsed in yesterday’s legislative action. … The education of our children was put on the back burner.” LaRocco added, “Today marks the official start of the race for Idaho’s Lieutenant Governor. I will be the champion for Idaho’s children. Jim Risch has pushed these young Idahoans to the back of the line. … He placed in front of our children out-of-state residents, property owners who have NOT been hammered by higher valuations, and high income folks who are not dramatically affected by higher sales taxes.”
Risch, in a press conference late Friday night with legislators, said, “I am overwhelmed by the two-thirds vote by both the House and the Senate for property tax relief. Difficult issues usually result in a close vote, but Idahoans saw that this plan provides immediate and permanent property tax relief while substantially helping education.”
Risch added, “In November, voters have the opportunity to cast their ballot in an advisory vote. I invite all Idahoans to join together and support property tax relief while protecting education. Idaho is a great state, and this legislation makes it even greater.”
The new law raises the sales tax from 5 percent to 6 percent on Oct. 1, while eliminating the $260 million property tax levy that now funds basic school operations in Idaho. The state would make up the lost education funding through a combination of the sales tax money and $50 million from this year’s state budget surplus. It also sets up a $100 million rainy-day fund for schools to hedge against future state revenue shortfalls. It does not increase education funding, seeking instead to maintain it at its current level.
After every delay possible – including the forced reading of much of the 29-page bill – the Senate has finally begun debating the tax reform bill – and it’s twelve and a half hours after this one-day special session started this morning.
Senators have been chewing over a protest by Democrats about the nature of the narrow call for the special session. Earlier, in the Senate Local Government & Tax Committee, Sen. David Langhorst, D-Boise, said the lack of consideration for other property tax relief bills “makes this process a sham.” But committee Chairman Hal Bunderson, R-Meridian, responded, “At least as far as this committee’s concerned, we’ve heard everybody who chose to testify.”
In addition to allowing public testimony, Bunderson allowed Langhorst’s motion to amend the bill as Democrats wanted to, though it was voted down. A similar motion also was allowed in the House committee meeting this morning, but only two members of the public were allowed to testify there.
The Senate’s Tax Committee has voted 6-3 in favor of Gov. Jim Risch’s plan to cut property taxes and raise the sales tax, sending it to the full Senate for final passage. The committee’s vote came after a 90-minute hearing in the Gold Room, the state Capitol’s largest hearing room. Among those testifying at the public hearing was Barb Bode, president of the Idaho PTA.
“The Idaho PTA understands the need for property tax relief, but the Idaho PTA cannot support the governor’s bill,” Bode told the panel. “Right now it does not say, other than for this next year, that the monies from the sales tax … will be dedicated to educational funding.” Other education leaders told the panel that while they appreciated the bill’s $100 million savings account for education, they’d prefer not to lose the stability of property tax funding, and would rather see this year’s budget surplus spent to boost education instead of just to ensure its funding stays at the same level in the future.
Latah County Commissioner Paul Kimmel spoke in favor of the bill, on behalf of the Idaho Association of Counties. “We’re the ones in the trenches,” he said. “We sit as a board of equalization each June.” He added, “We also recognize the need to fund education – education drives our communities, it drives our economies.”
The senators on the panel had probing questions for many of those who testified – Sen. Brent Hill, R-Rexburg, a CPA, grilled state Tax Commissioner Dewey Hammond about the bill’s impacts on income tax deductibility.
When former state Sen. John Sandy, the governor’s chief of staff, told the panel that Idahoans support the governor’s plan, Sen. David Langhorst, D-Boise, responded, “We hear from different people. My e-mails are 15-to-1 against this.”
Senate Tax Chairman Hal Bunderson, R-Meridian, opposed the bill, but said he’d made a commitment to Senate leaders not to block the bill in his committee or individually stand in the way of getting it out to the full Senate for a vote. That’s where the bill is headed now.
Senate Tax Chairman Hal Bunderson, R-Meridian, has scheduled a 90-minute hearing on the tax reform legislation, to begin shortly in the Gold Room on the 4th floor, the capitol’s largest hearing room. He has set strict time limits for committee discussion, weighing the pros and cons of the bill, and taking public testimony. Bunderson just briefed the full Senate about the plans, and then they went at ease for the committee hearing.
Senators said they hope to reconvene around 6 p.m. after the committee hearing.
Rep. Bill Sali, R-Kuna, who’s running for Congress, just spoke out in favor of the governor’s tax bill on the House floor. The bill lowers property taxes and raises the sales tax. “This is not exactly the way I would do it,” Sali said. “There is more that will be done in the next legislative session, but this measure is something that we can do today.” He said he “commends” the governor and legislative leaders for calling the session and bringing the legislation before lawmakers.
Sali’s Democratic opponent in the congressional race, Larry Grant, had called on him to oppose the bill as a tax increase. Grant backs the Democratic alternative plan, which would grant property tax relief to homeowners using this year’s surplus funds, but wouldn’t raise the sales tax.
The House debate on the tax reform plan is still going – and going. To listen in live, go to www.idahoptv.org. Among the highlights so far:
Rep. George Sayler, D-Coeur d’Alene, said, “It would be politically expedient for me to vote yes – it would probably ensure my re-election. But I cannot in good conscience vote for property tax relief that requires someone to pay for it every time they sit down for breakfast, lunch or dinner … especially when we could have provided the same relief without raising sales tax.” He added, “For me, this program represents a transfer of wealth from the less well-off to the better-off. It would be a failure of leadership for me to support this policy.”
Rep. JoAn Wood, R-Rigby, speaking in favor of the bill, said she may be forced to sell her “little 90-acre farm” because of taxes, water fees and other costs. “I really struggle,” Wood said, with the idea of giving “more relief to homeowners… and not to the little 90-acre farm.”
House Tax Chair Dolores Crow, R-Nampa, said the bill promises “immediate, meaningful, and permanent tax relief.”
Rep. Nicole LeFavour, D-Boise, was gaveled down by House Speaker Bruce Newcomb and cautioned to be respectful of the governor in her remarks, after she made reference to upcoming elections and the governor’s short-term status. She called the special session “not the most stirring moment in our Democratic process.”
Rep. Phil Hart, R-Athol, told the House, “The property tax is a mandatory tax, and the sales tax is a voluntary tax - you don’t have to pay unless you choose to spend your money.” Idaho does, however, charge its sales tax on food.
House Assistant Majority Leader Mike Moyle, R-Star, argued that the governor’s bill eliminates the one major property tax levy in Idaho that’s directly tied to escalating property values. “Is it really fair that because somebody moves in next to you and values go up, that you get taxed out of your home? I think not,” he said. “It’s vital that we do something, and we do it soon, because citizens are going to pay the price – and they shouldn’t have to pay that price because someone moved in next to them.”
Jerry Brady, Democratic candidate for governor, was smiling in the shade outside the state Capitol at the lunch hour today, as Ada County Democrats held a “Pork for the People” luncheon in protest of the tax legislation being enacted in today’s special session. “Pork to me means that the fat cats are getting more money,” Brady said. “My take is that the utilities, the large corporations, the for-profit hospitals ought to be paying their fair share for education.”
The lunch was in the Capitol Park, across the street from the state Capitol – where Gov. Jim Risch’s tax legislation is gliding toward enactment, over the bumps of the Democrats’ objections. Though they’ve been protesting it at every point, they hold just a small minority in the Legislature.
Democratic spokesman Chuck Oxley said the event was meant to illustrate “the idea that it’s pork to the special interests, corporations and out-of-state owners who are going to make so much money out of this sham.” The lunch menu included pork sandwiches, pork and beans and salad.
The House Revenue & Taxation Committee has just voted 13-6 in favor of Gov. Jim Risch’s tax reform bill. Those voting against were Reps. Leon Smith, R-Twin Falls; Janice McGeachin, R-Idaho Falls; and Democratic Reps. Nicole LeFavour, Wendy Jaquet, George Sayler and Elmer Martinez. All other members, including Rep. Jim Clark, R-Hayden Lake, and committee Chair Dolores Crow, R-Nampa, voted in favor.
Rep. Mike Moyle, R-Star, urged support. “This is a good bill for anybody in the state of Idaho who pays property taxes, and it’s fair across the board,” he said.
It was well after 8 a.m. by the time the House finally got rolling this morning – the House chaplain got stuck in traffic – but nevertheless, Speaker Bruce Newcomb started off the day with, “The hour of 8 a.m. having arrived…” Both houses went into session and went through the formalities before breaking, the House to await the 9 a.m. meeting of the Rev & Tax Committee on the governor’s tax legislation, the Senate for a State Affairs Committee hearing to confirm Mark Ricks as lieutenant governor. Ricks was there, presiding over the Senate in his new role for the first time.
There’s already a large crowd spilling out of the House Rev & Tax Room, where half of one of the three rows of seating has been blocked off, reserved for the committee chair’s family members.
House and Senate Democratic leaders Rep. Wendy Jaquet and Sen. Clint Stennett joined other Democrats at a press conference at the Boise Train Depot on the eve of the special session of the Legislature, and vowed to try to get their own tax reform bill introduced or to change Gov. Jim Risch’s bill during the one-day special session. “We have combed through the Constitution and the law,” Stennett said. “We’ll make every effort.” Asked if Democrats have enough votes in the Senate to block the two-thirds vote needed to suspend rules, Stennett said, “I’ve made a few calls.” Sen. Elliot Werk, D-Boise, said Democrats also want changes in the advisory ballot language that Risch has proposed, “to be straightforward without these kinds of leading statements.”
The proposed ballot measure now reads: “Should the State of Idaho 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%?”
Rep. Mike Mitchell, D-Lewiston, said he’s prepared two proposed amendments to the Risch tax bill, one to substantially increase the grocery tax credit and the other to take the sales tax off food. “I think these are two issues that might have been discussed, had we had an open process,” he said.
Jaquet called Risch’s bill “a temporary fix from a temporary governor,” and said, “We passionately feel that our bill is a better bill for the homeowner.”
But Democratic gubernatorial candidate Jerry Brady alluded to the big catch to all the Democratic plotting – Republicans control the Legislature with a huge supermajority, and hold every statewide elected office in Idaho except for superintendent of schools. “We need to take back the Statehouse so that we have a chance to have real debate to represent the people,” Brady said.
Democratic congressional candidate Larry Grant is calling on his GOP opponent, state Rep. Bill Sali, to vote against Gov. Jim Risch’s tax reform bill, which would cut property taxes and raise the sales tax. Grant favors the Democratic alternative plan, which would just trim property taxes for homeowners. “Mr. Sali prides himself on never having voted for a tax increase,” Grant said. “He has a chance, one last chance, as a state legislator to do it again.”
Sali hasn’t taken a position on the bill yet, but reportedly is leaning toward supporting it.
Senate Tax Chairman Hal Bunderson, R-Meridian, requested an Idaho Attorney General’s opinion more than a month ago on whether Gov. Jim Risch really could limit the special legislative session to just one bill – something former Idaho Supreme Court Justice Robert Huntley now is challenging. David High, chief of the civil litigation division for Attorney General Lawrence Wasden, issued a four-page opinion concluding that Risch can do it. “The governor would appear to have the authority to limit the special session to consideration of a particular bill,” High wrote in the July 7 opinion.
Accordingly, Bunderson has issued a letter to all senators stating that when his Local Government and Taxation Committee holds its hearing on the governor’s bill, any other bills or other topics “not specific to the House Bill presently known as RS 16445” will be considered “extraneous,” and committee debate on them will not be allowed. “We need full disclosure of the bill’s strengths and weaknesses. Let it pass or fail on its own merits,” Bunderson wrote.
He accompanied his letter with a draft “white paper” listing pros and cons of the legislation, which Bunderson opposes. “In my opinion, at the end of the day, if this bill passes, this session will be remembered not for the day we reduced property taxes or solved the property tax problem, it’ll be the day when we have structurally changed our education policy in a permanent way,” he said yesterday.
However, Bunderson also said he’d made a commitment to Senate leadership to not block the bill in his committee. “I think people have to be accountable,” he said. “I will not vote for the bill in committee unless we have a tie vote. Then I will vote to move it to the floor, with a proviso that I will debate against it and I will vote against it, but I’m doing it so that people can be accountable on this issue which is the sole purpose of the session. I think it’s inappropriate that one or two legislators stop this from progressing to a full vote on the floor.”
The Idaho Association of Commerce and Industry, the influential business lobby, announced today that when its president Steve Ahrens retires next month, he’ll be succeeded by Alex LaBeau, the current head of the Idaho Association of Realtors. Ahrens has held the post for 15 years.
Ahrens praised his successor, saying he’s worked with him on issues including property taxes, initiative reform, tort reform and the repeal of term limits. “Alex earned a reputation as a ‘finisher’ – when he promises to do a job, you can count on that job getting done, and done well,” Ahrens said.
LaBeau, 37, said his short-term goal is to “maintain IACI’s credibility as a resource for legislators,” and in the longer term, he wants to involve the business group’s members more in direct lobbying. “Grass-roots lobbying is the wave of the future,” he said.
Idaho Democrats have released a five-page legal opinion concluding that their property tax reform plan is constitutional – in response to continuing suggestions from Gov. Jim Risch that it’s not.
The Democrats want to eliminate the school operations property tax levy only for homeowners; Risch wants to eliminate it for all taxpayers, plus raise the sales tax. Only Risch’s proposal will be considered in a Friday special session of the Legislature.
Risch has been citing the state Constitution, saying the only way to give property tax relief is to give it to everyone. Article VII, Section 5 of the Constitution says, “All taxes shall be uniform upon the same class of subjects.” But the same section also says, “The legislature may allow such exemptions from taxation from time to time as shall seem necessary and just.”
C.A. Daw, a Boise attorney, expert in property tax law and former deputy attorney general for the Idaho Tax Commission, concluded that the Democratic plan creates an exemption, so it’s constitutional. State Democratic Party Chairman Richard Stallings said, “Gov. Risch is a lawyer, and by all accounts, a very good one. It is shameful that he would use the power of the governor’s office, invoking Idaho’s most cherished document, to mischaracterize the Democratic plan. It’s a crass use of power and he should apologize for misleading the people of Idaho.”
Waiting right now for Risch’s response…
Here’s an oddment reported by the S-R’s Meghann Cuniff up in Post Falls today: Though the Bill Sali congressional campaign said earlier that the fundraising breakfast this morning with U.S. House Speaker J. Dennis Hastert was closed to the press to comply with the Speaker’s policy for such events, Hastert said at a “media availability” afterward that he didn’t even know the media wasn’t allowed in. “I wasn’t aware that it was closed to the press,” he said, adding, “We’re happy to have you here and talk to you here.” When told that someone said it was his office’s policy to close such campaign breakfasts to the press, Hastert said, “Maybe it is. We don’t usually worry about it.” The Sali campaign initially said between 120 and 140 supporters turned out for the $35-a-plate affair, then put out a press release saying there were “over 150.” Which one is it? Well, there were no press folks there to count heads.
Current Gov. Jim Risch laid out an unusual suggestion for the format of his statewide televised debate against election opponent Larry LaRocco, the former congressman he faces in his bid for another term as Idaho’s lieutenant governor: Risch wants the two candidates interviewed separately for 30 minutes apiece, with the other nowhere in sight.
“The Governor suggests that you spend 30 minutes asking the questions of one candidate and getting the response to each question with a time limit for the response, and then asking the same questions to the other candidate with the same time limits,” is how his campaign put it. “The Governor has agreed that he would take either the first 30 minutes or the second 30 minutes. In any event, the candidates each should leave the set when not subject to their part of the questioning,” campaign representative Jason Risch, Risch’s son, wrote in an Aug. 17 letter to the organizers of the Idaho Debates, which air live each election season on Idaho Public Television and are co-sponsored by the League of Women Voters of Idaho and the Idaho Press Club.
Jason Risch wrote that the suggested new format was “due to the disruptive nature of previous experiences with the opposition.”
Elinor Chehey, debates coordinator for the League, wrote back politely declining the suggested format change. “We have a 30-year history of conducting debates in which candidates engage in lively conversations, where opposing views are aired in a polite fashion…,” she wrote in an Aug. 21 letter. “Any candidate who tries to disregard the rules of the debate or of common civility risks damaging his or her reputation with the voting public.”
Chehey noted that the three organizations involved in the planning the debates had discussed Risch’s suggestions. (Full disclosure here: I’m the president of one of those organizations, the Idaho Press Club.)
“We see no reason to conduct the Lieutenant Governor debate under rules different from those we use for other debates,” Chehey concluded.
When you play the new Idaho-themed Monopoly game, you don’t stay at pricey Boardwalk – you’re at Micron instead. Sun Valley Resort replaces Pennsylvania Avenue, and instead of Marvin Gardens, it’s Monsanto Corp.
St. Charles Place has been replaced by the Cataldo Mission, and instead of Connecticut Avenue, there’s the potato. And forget those four railroads – instead you’ll see Idaho’s four largest universities, the three state U’s and BYU-Idaho.
What kind of alternate Idaho universe is this? It’s a fundraiser from the Idaho/Eastern Oregon Lions Sight and Hearing Foundation, to benefit the group that works to provide sight and hearing assistance to those in need. It’s offered through USAOPOLY, a group that’s under license from Hasbro.
“We tried to create a game that would represent the whole state of Idaho and show off its beauty, which I’ve come to love,” foundation trustee Ron Gill of Idaho Falls said in a news release. “I really think we have succeeded with this unique game.”
The Idaho-opoly board that resulted is a mixture of “sponsored” and “non-sponsored” places and features – with corporations like Micron and resorts like Sun Valley competing in a silent auction for their spaces, with the donations going to the foundation. That’s why there’s a space for “Yellowstone Bear World,” Great Floors, and Rexburg-based Pinnacle Pensions (their spot replaces “Water Works”).
Even the playing pieces are either Idaho-ized, Lion-ized or sponsored – they include a popcorn bag sponsored by Reel Theatres, a Key Bank symbol, a Spuddy Buddy, a Lion, and a guide dog for the blind. The Idaho-opoly money, thanks to a “considerable donation,” bears the logo of Citi Group.
The center of the board features a scenic photo of the Sawtooths, and an array of Idaho photographers and artists donated their work to portray Idaho features, places and symbols. Due out Sept. 1, the game will be sold in gift shops and by order from the Lions at $27 a pop for pre-orders, or $35.95 later.
Idaho’s updated revenue forecast for the coming year was released today, and Gov. Jim Risch said it shows the state could end up with another $200 million-plus surplus at the end of the 2007 fiscal year, on top of the current $203 million it has in the bank from the last fiscal year. “Our economy continues to perform very well,” Risch said. “The projection of a surplus for this fiscal year is not overly surprising. The growth trend has not slowed down in Idaho. … This is very good news for our legislators when they come to town next January.”
Figures from July, the first month of the current fiscal year, showed revenues $12.8 million over official state projections. That included an overage in individual income tax of $3.6 million, corporate income tax of $5.3 million, and sales tax of $3.2 million. Product and miscellaneous taxes also were up slightly.
The numbers bolster Risch’s proposal, to be considered in a special session of the Legislature next Friday, to shift $50 million of the current surplus into ongoing school funding. “There isn’t anyone who will tell you there isn’t $50 million” in ongoing money, Risch said jubilantly. “It’s showed up two years in a row now.”
Mike Ferguson, the governor’s chief economist, said the latest forecast also includes other positive revenue news, including that an extra penny on the sales tax now is forecasted to bring in $219 million annually, up from the previous estimate of $210 million. Risch is proposing to raise the sales tax a penny while reducing property taxes that now go to fund schools, and shift the sales tax proceeds plus some surplus funds to schools to make up their lost property tax funding.
A month after a state study found serious problems with morale and communication at the Idaho Transportation Department, department Director Dave Ekern has resigned. The state Transportation Board today selected former department Director Dwight Bower, who headed the department for nine years until his retirement in 2002, as the interim director.
Gov. Jim Risch, in an impromptu press conference at his office, said he’d met with both Bower and board Chairman Frank Bruneel. “Both of them share the passion that I have to move the GARVEE bonding method of highway construction forward,” Risch said.
Idaho is in the early stages of a program to build roughly 25 years worth of highway projects in 10 years, using Grant Anticipation Revenue Vehicles, or GARVEE bonds, a financing method Congress created to allow states to borrow against future federal highway funding allocations. Risch said the first GARVEE project breaks ground tomorrow morning, on Highway 30 near Lava Hot Springs in Eastern Idaho, and five more are in the works.
“My objective is to move the department forward,” Risch said. “You always hope that everything you do improves the morale of the department.”
Ekern, who had held the post since 2003, said in a statement, “I have recently been approached with two potentially significant career opportunities and do not think it is appropriate to pursue these negotiations while fulfilling my duties as director.”
Ekern is using vacation time and will leave the state payroll on Aug. 25th. Bower will start work as interim director Sept. 5th. Until then, the department’s deputy director, Charlie Rountree, will oversee daily operations. ITD has 1,834 employees and an annual budget of $500 million. Ekern’s annual salary was $130,000.
The scene both inside and outside the Dick Cheney-Bill Sali fundraiser was both low-key and festive. Inside, Sali supporters in the specified “business attire” sipped wine, ate cheese and crackers and hors d’oeurves, hugged and laughed as they waited for the vice president to arrive. Among the crowd were U.S. Sens. Larry Craig and Mike Crapo, U.S. Rep. Butch Otter and Gov. Jim Risch.
Asked if he was endorsing Sali by his presence, Risch said, “Absolutely – I endorse every Republican candidate.” He added, “At stake here is the control of the U.S. House, and that rises above any personality issues.”
Outside the convention center, protesters with various signs lined busy Front Street, with messages ranging from “Bill Sali YIKES” to “Dick Cheney, 19% approval rating- Representative government?” Some held mock gravestones to protest the war dead in Iraq.
But as the afternoon wore on, both the protesters outside and the supporters inside were vastly outnumbered by folks gathering for Boise’s weekly downtown summer live-music festival, “Alive After 5,” which drew revelers, kids in bathing suits playing in a gushing fountain, and plenty of people relaxing in the shade with drinks and snacks and enjoying music from the live band, the Derailers.
Vice President Dick Cheney gave GOP congressional candidate Bill Sali his unqualified support at a Boise fundraiser this afternoon, calling Sali “a great candidate for Congress” and adding, to a crowd of about 160 supporters, “You all know Bill.”
The $125-per-person fundraiser offered Sali supporters a chance to mix, nibble, and hear the vice president’s speech – which included a grim update on the war on terrorism – while bigger spenders paid $2,100 per couple for both the reception at the Boise Centre on the Grove and a chance to pose for a photo with the vice president. Sali’s campaign had no immediate breakdown on how many paid at which levels.
Sali beamed as Cheney heaped praise on him. “He’s somebody you can count on to look out for the taxpayer, the property owner, the farmer and rancher and the entrepreneur,” Cheney told the appreciative crowd. “Bill is ready to make a difference in Washington. He’s going to make the kind of congressman who makes all of you proud.”
Sali got only 25.8 percent of the vote, however, in a bitter, six-way Republican primary in May. The controversial longtime state legislator, known for his strident anti-abortion stands, has made lots of enemies over the years in his own party, including GOP House Speaker Bruce Newcomb, who after clashing with Sali during the legislative session, sputtered, “That idiot is just an absolute idiot.” It wasn’t the first time Sali had clashed with his own party’s speaker – former speaker and current Congressman Mike Simpson once threatened to toss Sali out the third-story window of his state Capitol office.
Cheney was all positive. “Bill Sali is exactly the kind of person who belongs in Congress, and President Bush and I look forward to welcoming him to Washington come January,” Cheney said as he concluded his remarks, followed by a loud swell of recorded march music as he zipped out of the room.
Sali, clearly moved, told the crowd, “As he has so poignantly stated, there’s a lot at stake in this election.” Republicans must get their message out, he said. “If we don’t get that done, Democrats have a real chance to win.”
The state Tax Commission, sitting as the Board of Equalization, came up with a compromise plan for Bonner County taxable values today that will mean increases from 2005 levels, but not by as much as an earlier, disputed assessment that jumped values 62 percent countywide.
Tax Commissioner Dewey Hammond crafted the compromise plan, which he said would set the values “at the low end of acceptable.” He added, “My recommendation is to put Bonner County in the middle of all the other counties – not at the front end.” Hammond used a calculation to determine the percentage increases that set a goal of reaching 95 percent, rather than 100 percent, of current market value for each area. That resulted in numbers that still fell within legal requirements for matching market values – while the 100 percent target would have put Bonner County higher than most counties in its ratio of taxable values to actual sale prices.
Bonner County Commissioner Karl Dye welcomed the compromise, which the four tax commissioners approved unanimously. “I appreciate the board’s consideration,” he said. “I think this is a more just value that we can take back to our taxpayers and try to explain what’s going on, and go from there.”
Bonner County commissioners, besieged by tax appeals, had passed a resolution to scrap the 2006 assessment and roll values back to 2005 levels, because of inaccuracies in the 2006 assessment. But state law and the state Constitution require tax assessments to match current market values.
The Tax Commission’s compromise plan applies differing percentage increases to 2005 values for homes in various cities and neighborhoods around the county. For the most part, it calls for increasing residential lot values by close to 100 percent, but increasing values for improvements on the land – homes – by only about 30 to 50 percent. For most homeowners, a large majority of their total taxable value is due to the structure, rather than the land.
Here’s an example: A house in Priest River would see a 30 percent increase in the value of the structure, and a 100 percent increase in land value. If that’s applied to a $120,000 home for which $20,000 of the value is from the lot, after this year’s increased homeowner’s exemption, the owner would see an increase in total taxable value of 36 percent.
Other areas would see differing increases. In Dover, lot values would go up 320 percent, but home values wouldn’t rise at all, and instead would stay at the 2005 level. In some rural subdivisions, home values actually would drop while land values would double, all in an effort to more accurately match market prices.
Tax Commission Chairman Tom Katsilometes said, “We don’t have any heartburn with Bonner County or Bonner County commissioners. Frankly, I think this has been a good exercise, bringing this issue that’s facing Idaho to the forefront. It’s not going to go away.”
State Superintendent of Public Instruction Marilyn Howard is being treated for breast cancer, her office just announced, and is undergoing surgery today. “Once Howard recuperates from today’s surgery, she and her physicians will determine appropriate follow-up treatment,” said a statement from Jennifer Oxley, Howard’s new public information officer. “Howard said she anticipates a somewhat reduced work schedule over the next few weeks. During her absences, the SDE (state Department of Education) will be managed by Dr. Jana Jones, Howard’s chief deputy.”
Jones, of course, is running for Howard’s job after Howard retires from the post. Howard, currently the state’s only Democrat in statewide elected office, is completing her second term in office. In the November election, Jones faces Republican Tom Luna, a businessman who unsuccessfully challenged Howard’s re-election four years ago.
Howard is a longtime educator and an expert on early reading problems who brought her expertise to the office as the state was launching new efforts to focus on reading skills in the early years of school.
A split Idaho Supreme Court ruled today that a petition for a vote on whether the city of Boise should put a new 10 Commandments monument back in Julia Davis Park, where one was removed two years ago and given to a local church, should have gone to the voters. The city ruled that siting of park monuments was an administrative decision and not subject to review by initiative, and the 4th District Court agreed with the city. But now the state Supreme Court has held, in a 4-1 ruling, that it was too soon to say.
The measure should have gone to a vote first before any consideration of whether it was improper, the court ruled, because it was just a proposal or idea before that. “The benefits of public debate through the initiative process may be lost,” wrote Chief Justice Gerald Schroeder. “Just as the court would not interrupt the legislature in the consideration of a bill prior to enactment, the court will not interrupt the consideration of a properly qualified initiative.” In a dissenting opinion, Justice Linda Copple Trout noted that the majority opinion overturned three other Idaho Supreme Court cases on initiatives on administrative issues. That question is different from whether an initiative is constitutional or not, Trout wrote – a question that the court clearly won’t touch until after an initiative is enacted.
So the upshot is that the court held that the measure should go to the voters, and then if it passed, it could be overturned later if it wasn’t a proper topic for an initiative.
Just in case you’re wondering, we’ve developed an online calculator so you can find out for yourself. How much would you save from the proposed reduction in Idaho’s property tax? How much more might you spend with the proposed increase in sales tax? What’s the bottom line? Check it out and see. And read our report about how the plan affects some of your neighbors.
Gov. Jim Risch today named David Brasuell the new acting administrator of the Division of Veterans Services, replacing Joe Bleymaier, whom Risch’s office said resigned last week. The Veterans Affairs Commission – which Brasuell currently chairs – is charged with nominating a permanent director. Brasuell is resigning from the commission to take on the job.
Brad Hoaglun, Risch’s communicators director, said Bleymaier simply informed the governor’s office last week that he was resigning for personal reasons, so Risch made the interim appointment.
Brasuell is a colonel in the Marine Corps Reserves who served six months in Iraq, and has a combined 28 years of active and reserve service. He has served on the Idaho Veterans Affairs Commission since 2000. Brasuell has worked for the state Department of Corrections since 1992, most recently as program manager for the women’s prison in Pocatello.
The governor said in a press release that the new administrator’s goals are to “work to create a respectful workplace, be a good steward of tax dollars, nurture a positive relationship with veteran organizations, and continue to work towards a veterans cemetery in North Idaho.”
Risch, who is serving as governor only for seven months, already has named new heads for the state Health & Welfare Department, the Corrections Department, Insurance Department, the Division of Human Resources, and the Idaho Transportation Board.