Kootenai County officials Wednesday decided not to ask voters to raise sales taxes - five months after persuading state lawmakers for the right to do so.
A proposed optional 1 percent sales tax will not go before voters this November - in part, county and city leaders admitted, because the political climate is not right.
Initial interest in the tax among business leaders and other organizations was lukewarm at best, they said.
“You’ve got a One Percent Initiative on the ballot to limit property taxes,” said Post Falls Mayor Jim Hammond. “At the same time we’re asking people to raise their sales tax. It’s too much to absorb.”
Commissioner Dick Compton also pointed out that many questions had not yet been answered.
With three months until the election, they had not even decided exactly how the extra $11 million would have been spent. And most officials agreed the tax is complicated enough that voter education would be difficult.
“I think they ran out of time to put it forward,” said Steve Judy, leader of the Concerned Businesses of North Idaho. “It sounds like a prudent decision.”
His organization supported lawmakers’ efforts to give the county the option of seeking the tax, but hadn’t decided if the tax increase should be approved.
From the beginning, local officials pitched the tax as a way to collect more money from tourists to help pay for county improvements like a new jail, more court space and road improvements.
While residents, too, would pay the higher tax for 10 years, they would get some or all of it back. At least half - and probably closer to 75 percent - of the $11 million collected would go toward cutting property taxes.
Critics, however, said a sales tax increase would hit the poor hardest, while property tax reductions benefit wealthier landowners. And One Percent Initiative author Ron Rankin, who is running for a seat on the county commission, said tourists would pay less than some think.
“The tourists will be paying that extra tax about three months a year and residents will be paying it 12 months,” Rankin said, adding that residents would get hit for big-ticket items. “Tourists don’t buy cars or refrigerators or go to gun shops.”
“Anyway you slice it and anyway you look at it, it is a tax increase,” he said, adding that property tax dollars would still go to operate new facilities after they’re built. “Half of reducing taxes is reducing government spending.”
Rankin suggested the sales tax proposal might have been withdrawn in part so he could not capitalize on it in his own campaign for his property tax limiting initiative. The initiative would cap property taxes to one percent of the assessed value, with some exceptions.
“I’m sure they knew I was going to be campaigning against it,” he said. “Sometimes fast guns don’t get drawn on.”
But Compton said Rankin didn’t factor “one iota” into the decision. Officials said they will probably try next year to take the proposal to voters.
“I still think it’s a good idea and makes sense,” Compton said.