Legislation from House Majority Leader Mike Moyle would shift half of the roughly $20 million a year in property taxes from new construction that’s now collected by counties, cities, local highway districts and others to local school districts for bond repayment and addressing building safety issues. “It’s bonus money, it’s outside of the 3 percent cap … and it grows those budgets,” Moyle told the House Revenue & Taxation Committee yesterday. “When I was a fire commissioner we loved it, we took all that money and we paid off bonds with the money. Every time a new house was built we got a check."

The panel agreed to introduce Moyle’s bill, HB 173, but not without raising concerns. Rep. Mat Erpelding, D-Boise, asked Moyle, “So is there a feeling that the counties and the cities and the transportation departments, that they’re overly flush in resources, so rather than having the state do its constitutional responsibility … we should move money from local counties, cities and local units of government to pay for this?”

Moyle said, “I would remind you this is new money. ... We’re not raising anybody’s taxes. It’s coming from the new growth that’s having an impact on the schools.”

Rep. Clark Kauffman, R-Filer, who is also a local highway district commissioner, said, “It seems to me like we’re just robbing Peter to pay Paul. I mean, everybody has needs. … So I guess I’m trying, if you could explain to me why the schools have more of a need than local governments.” Moyle said, “I think it’s a fair way of handling it. ... You’ll get that money back, it’s just a timing issue.” He said the following year after the new construction is built, its full value would be taxed by the local units of government.

Moyle’s bill, HB 173, is co-sponsored by Senate Tax Chairman Jeff Siddoway, R-Terreton. Moyle said the problem is that schools don’t get any additional revenue when new construction occurs in their area, even though they immediately have to serve the kids who move into the new homes. Schools previously did share in that revenue, until the Legislature in 2006 eliminated the basic property tax levy for school maintenance and operations, shifting schools to a reliance on state sales taxes, which then tanked during the economic downturn. Since then, schools have sought authority for impact fees or real estate transfer fees to cope with growth, but have been rebuffed by the Legislature. Idaho Education News has a full report here.