Legislation pushed by House Majority Leader Mike Moyle, R-Star, cleared the House Revenue & Taxation Committee yesterday on a party-line vote over objections from cities, counties, library districts and others, to address “foregone” revenue for local governments, the amount that builds up and is available for possible future tax increases when a city, county or other local government agency increases its budget by less than the maximum allowable 3 percent. Idaho Falls Post Register reporter Bryan Clark reports that this is the second run Moyle has made at the issue of foregone revenue in two years. Last year, he introduced and successfully passed a bill that requires cities and counties to hold a public hearing if they plan to dip into foregone revenue.

Local governments have long argued that without the ability to bank the “foregone” balance for unforeseen future costs or emergencies, they are penalized when they don’t raise taxes by the full 3 percent each year, even if they’d rather not.

HB 103 would permit local governments to pass a resolution voluntarily reducing the amount of foregone revenue the state Tax Commission records on its books, Clark reports. Doing so would limit the ability of local governments to raise taxes in the future. “This bill is nothing more than giving the locals control to choose their own destiny,” Moyle said.

Among those testifying against the bill was Pocatello Mayor Brian Blad, who said it could hamstring local governments and force them to cut services. Blad said a $3 million foregone balance for Pocatello had been used to rescue the city after it lost a $2 million court judgment. Using foregone revenue, the city was able to pay off the judgment without cutting city services, he said. Clark’s full report is online here.