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Spokane, Washington  Est. May 19, 1883

Bill would shift school maintenance costs

Associated Press The Spokesman-Review

BOISE – Advocates for education and low-income people are at odds with counties and industry over two measures headed for Senate debate.

The proposals would make the state responsible for half of what property taxpayers now pay toward school maintenance, and then increase the sales tax by a half-cent on the dollar to pay for the shift.

The Senate Local Government and Taxation Committee voted 6-2 Thursday to send the bills to the full chamber for possible changes.

Sen. Brent Hill, R-Rexburg, says amendments could include shifting to the state all the roughly $288 million that property taxpayers will pay toward school maintenance this year, and boosting the sales tax by a full percentage point to 6 percent to cover the cost.

Thursday’s two-hour session ended three days of Senate hearings on one of the 2006 Legislature’s most-contentious issues: property tax reform.

Owners of Idaho homes now pay two-thirds of Idaho’s $1.1 billion property-tax burden. Many think their rising assessments are unfair and some are demanding change.

“We’ve been careful, and we’ve sought to do a thorough evaluation,” said Sen. Hal Bunderson, R-Meridian, chairman of the committee.

“I feel confident, at least in the Senate, that after we get through reviewing the documentation, every senator will be able to make an informed decision.”

On Feb. 21, the House passed eight bills to Bunderson’s committee. Four were approved by the panel earlier this week. Two failed to win support.

Education groups including the Meridian School District, the state’s largest with 25,000 students, argued Thursday that making school funding more dependent on sales taxes was a dangerous move that upends a system based on stable property taxes.

United Vision for Idaho, which represents low-income residents, said raising the sales tax would increase costs for Idaho’s most economically vulnerable citizens.

“It makes Idaho’s property-tax system less fair,” said Judy Brown, an economist for the Boise-based group.

“The sales tax and the property tax are both regressive, but the sales tax is more regressive.”

Meanwhile, some business groups, along with the Idaho Association of Counties, favor shifting the entire school maintenance burden to the state.

They say that would relieve property owners – including homeowners, businesses, utilities and farms – of a quarter of their total property-tax burden.