Kootenai County sales tax drops half-cent

Kootenai County residents are getting an early holiday present as the sales tax drops to 5 percent today.

More than 6,000 businesses changed their cash registers this morning so they no longer charge customers an extra half-cent per dollar on goods ranging from groceries and clothes to cars and boats.

“If our computers are networking properly it’s easy,” said Sara Ripley, co-owner of Sweetpea Home Interiors on Sherman Avenue, about recalibrating the cash registers. “If not, it’s kind of a pain.”

The tax reduction comes because the county made its last payment on a $12.5 million jail expansion, which voters approved in 2000. Voters agreed to use the additional half-cent sales tax to pay for the jail while putting an equal amount toward property tax relief.

The Kootenai County Commission wanted the extra half-cent sales tax to remain – paying for a new $50 million jail expansion. Yet voters in November rejected the idea, meaning the extra tax goes away – but so does the reduction in property taxes.

“For the consumer it means at the Christmas holiday every $100 you spend you save 50 cents,” Kootenai County Commission Chairman Gus Johnson said.

But he said that’s not a good tradeoff because the jail still needs more cells. He added that county residents would have to spend $20,000 on taxable goods a year to make up for the loss of property tax relief.

Johnson said a property owner with a $200,000 home was saving about $100 each year on property taxes because of the tax relief that came with the extra sales tax.

Now that the half-cent sales tax is gone, so is the property tax relief – meaning property taxes will increase by $2.5 million in fiscal year 2006 and by another $2.5 million the following year.

It’s likely the county will come back in November and ask voters again to approve a half-cent sales tax to pay for more cells, especially those to house and segregate the most high-risk inmates. But perhaps this time the county won’t ask for $50 million.

The county’s jail expansion citizens advisory committee met Wednesday to pinpoint why they only got 62 percent of the 66.6 percent votes needed to continue the tax.

“We goofed in some areas,” said Commissioner Katie Brodie, who also serves on the jail committee. “Probably in the area of education.”

The committee should have explained the costs more clearly and why such a large expansion was needed, she said.

Committee members still believe the sales tax is the best way to pay for jail expansion but realize that the $50 million price may have been too high, Brodie said.

The group also discussed expanding to include more of the people who opposed the measure – namely the editorial board of the Coeur d’Alene Press and Concerned Businesses of North Idaho.

While the county is revising its plan to pay for a jail expansion, Sheriff Rocky Watson said the time is coming to bus inmates out of state to alleviate overcrowding and segregation problems. Watson didn’t know when the busing to jails in Eastern Washington and Western Montana might start.

“We’re not hauling them yet,” Watson said.

This isn’t the first time this year that retailers have had to change their registers in Kootenai County because of a sales tax reduction. In July, the sales tax dropped 1 percent, after the sunset of a temporary, two-year increase.

The Idaho sales tax, which started at 3 percent in 1965, went up to 4 percent in March of 1983, jumped to 4.5 percent three months later, and then fell back down to 4 percent in July of 1984. Two years later it went up to 5 percent where it stayed until 2003 when it jumped to 6 percent because lawmakers approved the temporary increase. Yet in Kootenai County the tax was actually 6.5 percent because of the voter-approved local option tax.