Budget Writers Pare Tax Support For Schools Financial Move Doesn’t Affect Amount Received By The 112 Districts This Year

Legislative budget writers followed the lead of Republican Gov. Phil Batt on Tuesday and cut the state’s general tax support for public schools by $4.1 million.

With almost no discussion, the Joint Finance-Appropriations Committee voted unanimously to divert only $9.2 million from the budget reserve account. That would offset the $13.3 million Batt ordered withheld from schools last summer in response to Idaho’s slowing economy and lower than expected tax collections.

The panel completely eliminated nearly $1 million originally earmarked for school improvement and then approved transferring an extra $3.1 million to schools this year from the special public school endowment fund - cash the schools were constitutionally entitled to anyway.

State aid to public schools, as much as half of all general tax spending just a few years ago, will still equal 49.2 percent in the current year. But the governor’s new 1996-1997 budget reduces the share to 48.8 percent.

The financial maneuvering does not affect the actual amount of state support directly received by the 112 districts this school year. That achieved Batt’s goal of averting financial problems, since school budgets were based on the original aid package or the automatic property tax increases a state aid shortfall would trigger.

But it does reduce the cash from the endowment that the districts could receive in the future, while politically it makes the proposed general tax support for next year appear to be increased by a larger percentage.

Batt’s proposed aid plan for the 1996-1997 school year totals $689.5 million. That is a 4.5 percent increase over the newly reduced general tax support amount of $659.9 million while only a 3.8 percent increase over the original $664 million allocation.

The diversion from the reserve leaves the balance of the so-called rainy day fund at $23.6 million.

As far as cash from the public school endowment fund, education traditionally received all the money generated in the fund annually. But the budget committee decided to cap the annual allotment from the endowment during the tight budget times of the 1980s.

The panel decided that underestimating endowment revenue was leading to a financial windfall for the school districts that lawmakers were getting no credit for.

Some lawmakers are now voicing the same complaint about the $42 million in public school property tax payments the state picked up in 1995 under Batt’s tax relief program. That dramatically increased the amount of state general tax revenue going to public schools, but the Legislature has received no recognition for that.

Because of that, there has been some discussion of changing the property tax relief legislation. It would change from the straight, dollar-for-dollar state payment of the tax liability in each specific district, to running the additional state support through the complex formula used to equalize general state education aid payments between so-called rich and poor districts.