6 Weeks In Office, Batt Wins Cuts In Property Taxes $40 Million Package Criticized As Favoring Business, Agriculture Over Homeowners

Senate Republicans easily approved Gov. Phil Batt’s $40 million property tax reduction plan on Thursday, handing the GOP’s first governor in 24 years a major victory six weeks into his administration.

“Today is the taxpayers’ day,” said Republican James Risch of Boise, former president pro tem who returned to the Senate last month after a six-year break.

“We’re going to limit government, and we’re going to have tax relief for the first time in a long time,” Risch declared.

The 24-11 Senate vote sends the bill to the governor for his signature. The legislation passed the House last week on a 57-12 vote.

Passage was a major lift for the new governor after a rocky opening five weeks.

And Batt kept the new momentum going by signing into law state payment of $12 million in catastrophic health care bills for the poor - bills that county property taxpayers otherwise would have had to finance.

In addition to paying those back bills that have been incurred since late 1993, Batt plans to have the state fund future catastrophic health care bills at a cost of about $7.5 million a year.

“As I campaigned around the state last year, far and away the biggest complaint was the extreme burden of property tax,” the governor said.

The $40 million package was at the heart of his successful campaign last year, and in addition to the permanent reduction achieved by cutting the basic school district operating levy 25 percent, the Batt plan imposes a 3 percent cap on the annual budget increases for property tax-financed governments - primarily cities and counties.

He believes that in the long term, the cap will generate far more property tax relief because it limits local governments’ ability to expand. Others fear it will hamstring local governments in their efforts to cope with growth, resulting in deteriorating services that can actually dampen economic growth.

Passage of the tax cut plan also left legislative budget writers little room to stray from Batt’s tightfisted 1996 budget plan - a plan that even some conservatives are not all that comfortable with despite its commitment to limiting the growth of government.

Still, 24 Republicans stood behind the tax package, sweeping aside complaints from eight Democrats and three renegade Republicans - Hal Bunderson and Grant Ipsen of Boise and Stan Hawkins of Ucon - that the bill offers no substantial tax relief to those really needing it - homeowners on low or fixed incomes.

Hawkins, who sponsored last year’s vetoed property tax cut, warned that under the complex tax reduction scheme some people will still see their tax bills rise.

Sen. Mary Lou Reed, D-Coeur d’Alene, called the bill “a cruel joke that has been played on the people of Idaho.”

“The mall developers of the world don’t need tax relief,” Reed said. “Average Idaho homeowners are the ones who need property tax relief.”

“Some of the critics,” Batt said, “have said that’s not enough, but I haven’t had anybody call and say, `Governor Batt, please don’t sign those property tax relief bills.”’

That, however, was at the heart of criticism from the opposition. It warned that rather than quelling what many perceive as a simmering property tax revolt the way the cut will be doled out could actually fuel anti-property tax sentiment.

“The cry for property tax relief came from the homeowners of Idaho, and this bill gives them very little of the relief,” Bunderson said.

Even its most ardent supporters did not dispute that just 30 percent of the reduction goes to resident homeowners while the rest - including an estimated $4 million to out-of-staters owning vacation homes or property in Idaho resort areas - goes to business and farmers.

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