Bill Would End ‘Unfair’ Distribution Of Sales Tax

Kootenai County should be receiving $1.5 million more a year in state sales tax money than it’s getting, state Rep. Jeff Alltus told a House committee Monday.

“It’s just too unfair,” said Alltus, a Hayden Republican.

Alltus presented legislation to the House Revenue and Taxation Committee that would use population, rather than outdated business inventory figures, to divvy up a chunk of sales tax money that the state sends back to cities and counties.

The committee agreed to introduce the bill on an 11-6 vote.

The proposal would change the distribution of a 6 percent chunk of the state sales tax. That money now is distributed on the basis of business inventories in the mid-1960s.

Continued use of those outdated figures has penalized counties that have grown since the ‘60s, according to Kootenai County Administrator Tom Taggart.

Under Alltus’ legislation, all counties would get the same amount of money that they collected in the 1996 fiscal year, but any extra money would be divided by population. Counties with a higher population would get higher returns.

While the legislation wouldn’t recoup the entire $1.5 million, “it would mean an extra $138,000 a year for Kootenai County,” said Alltus.

Kootenai County is getting $15.50 per person per year in money collected from this portion of the sales tax, said Alltus. But some counties are getting up to $300 per person.

“A lot of counties have dramatically changed, and this (current law) doesn’t have provisions for any kind of change,” said Taggart.

Many other fast-growing counties, including Bonner, also would gain if the bill is passed.

And slower-growing counties would not be harmed by this bill, said Alltus, because they would collect at least as much as they did in 1996.

“It’s not a big-vs.-little issue,” said Taggart. “The counties that have grown at a faster rate have lost out in current provisions.”

Because of the provision protecting current funding levels for all counties, the faster-growing counties still would be ceding some money to the slower-growing ones, Alltus said.

“This is a compromise,” said Taggart. “The correct solution would be to scrap the whole idea completely.”

, DataTimes