Anti-property tax forces on Friday filed an initiative petition to eliminate $140 million in local property tax support for public schools over three years and shift the burden to the general state treasury.
The Incremental Property Tax Relief Initiative is patterned after legislation proposed by Republican Rep. Lenore Barrett of Challis last winter but never advanced in the Legislature.
Submitted to the Secretary of State’s office by Laird Maxwell of Idahoans for Tax Reform, the proposition now goes to the attorney general’s office for review within the next four weeks. Maxwell will have three weeks to react to any criticism the attorney general might deliver before resubmitting the initiative so it can receive a ballot title and signature gathering can begin.
Maxwell, a strong supporter of the 1996 initiative that attempted to accomplish the same shift and limit remaining property taxes to 1 percent of taxable value, must gather 41,335 registered voter signatures by July 6, 1998, to win a spot on the ballot that November.
Last fall’s initiative was rejected overwhelmingly by voters, as was a similar proposal in 1992.
But proponents, including Kootenai County Commissioner Ron Rankin, contend the new initiative will get greater support.
Rankin said it all but mirrors a bill that was passed by the Legislature a few years ago, but vetoed by then-Gov. Cecil Andrus.
“If they voted in this before, it will be hard for them not to vote for it again,” Rankin said. “Everybody has come out for getting the schools off the property tax.”
He also contends the change would be even more satisfying to homeowners than his failed 1 Percent Initiative.
“The way the assessments have been for the last couple of years, rural property is taxed at $11.20 per $1,000 in value,” Rankin said. “If we take three mils off, which this would do, that will put us down to $8.20 per $1,000 - way under 1 percent.”
As with past tax-limiting propositions, the new initiative offers no general tax revenue source to cover the 15 percent of the public education budget still financed by local property owners.
It says only that school operations should be financed by the state’s share of sales tax revenues, which already are totally dedicated to education along with a portion of other taxes.
But the measure does delay the initial phase of the shift until the state budget year that begins on July 1, 1999, giving lawmakers the 1999 session to handle the problem should the initiative be approved the previous fall.
Gov. Phil Batt ran on a platform of tax relief in 1994 and won approval of shifting a quarter of the local property tax for schools to the general treasury during his first year in office. But the governor has adamantly opposed any additional property tax cuts since then because of the state’s tight revenue picture.
Advocates of property tax cuts have maintained that natural economic growth and cuts in other government spending would make the shift feasible, but the governor has vigorously disputed those claims.
Despite checking growth in many areas of government spending, Batt has imposed across-the-board budget cuts the past two years because of the state’s slowing economic expansion and the escalating spending demands of the state prison system.
In fact, a combination of circumstances has some policy-makers fearing a major state tax increase could be needed after the 1998 election to keep Idaho in the black.