September 3, 2010 in City

Allred’s tax reform role attacked

Democrat in Idaho governor race urged Senate to change 2006 bill
John Miller Associated Press
 
Associated Press photo

Democratic gubernatorial candidate Keith Allred, left, and Idaho Gov. Butch Otter debate in Idaho Falls last month.
(Full-size photo)

BOISE – Democratic gubernatorial candidate Keith Allred in 2006 played a major part in boosting a tax break for Idaho homeowners that’s reduced their annual payments, despite a Republican attack Thursday contending his role was minimal.

House Speaker Lawerence Denney, R-Midvale, and Senate President Pro Tem Bob Geddes, R-Soda Springs, accused Allred of taking too much credit for efforts to reduce property taxes in 2006, a year when home prices were skyrocketing and many residents were up in arms.

Allred, who at the time led the nonpartisan group The Common Interest, is now running against Republican Gov. Butch Otter.

“We think he (Allred) is basically claiming credit for something we did,” Denney told the Associated Press. “The impetus for that all came from the interim committee.”

But records from the 2006 Legislature, as well as interviews with other Republican lawmakers, show Allred was pivotal in linking a state homeowners tax exemption for owner-occupied homes to the Idaho Housing Price Index, instead of the federal Consumer Price Index.

Making that switch has saved Idaho homeowners millions, because the Housing Price Index has risen faster than the CPI, even taking into account the recent downturn in home values.

Allred declined to criticize Geddes and Denney following their attack, distributed to media outlets across the state.

“I think the errors in today’s press release were honest mistakes,” Allred said of the leaders’ release, which also includes several misspellings – and the contention Otter signed the final 2006 bill.

In fact, the expanded tax exemption was signed into law by then-Gov. Dirk Kempthorne; Otter became governor only in 2007.

The move by Denney and Geddes to take up arms for Otter is emblematic of the GOP’s fierce desire to retain the state chief executive’s seat that’s been firmly in Republican hands since 1994.

Nonetheless, an analysis by the Associated Press shows that linking Idaho’s homeowners exemption to the Housing Price Index, as Allred pushed for, has resulted in the exemption rising from $75,000 to $104,471 in 2009. It fell to $101,153 in 2010 and is due to drop again, to just over $92,000 for 2011, amid the moribund housing market, according to Idaho Tax Commission estimates.

Had the Consumer Price Index been used, however, the exemption would hover at $80,000.

Sen. Brent Hill, R-Rexburg, supports Otter’s re-election but remembers it was Allred who suggested the Housing Price Index during a presentation to the Senate Local Government and Taxation Committee.

“The rationale was, the Idaho Housing Index … was an index that would give a truer reflection of what house values were doing, either decreasing or increasing over time, than just the federal Consumer Price Index,” Hill said.

The expanded exemption finally passed 28-7 in the Senate and 60-8 in the House – though not with Denney’s and Geddes’ support.

In fact, they opposed the final bill – in part due to the changes Allred helped get the Senate to adopt.

At the time, there was concern the Housing Price Index could be too volatile, said former state Rep. Dolores Crow, R-Nampa and at the time head of the House Revenue and Taxation Committee.

Crow also opposed the changes.

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