February 24, 2013 in Idaho

Eye on Boise: Business tax’s end ‘devastating’ to public schools

By The Spokesman-Review
 

BOISE – The draft bill released last week by Idaho Gov. Butch Otter to phase out the state’s personal property tax on business equipment would have a “devastating” impact on the state’s public schools, according to a new analysis by Mike Ferguson, the former longtime chief state economist who now heads the Idaho Center for Fiscal Policy.

“Other state programs (colleges and universities, health and human services, public safety, etc.) would be adversely impacted, but none to the degree of public schools,” Ferguson writes.

The reason: The bill would give partial replacement funding for the lost property tax revenue to most local governments and taxing entities on a permanent basis, but schools would get replacement money only until their current voter-approved levies expire. A growing number of Idaho school districts now rely on supplemental levies, which last only one or two years, for basic operating expenses. Even if voters renew those levies or new ones are passed, there’d be no replacement funds for those.

“Public schools end up the big loser in what amounts to a three-pronged hit,” Ferguson writes. First, $90.5 million would be removed from the state’s general fund, roughly half of which now goes to public schools. Second, up to $41.2 million in property taxes would be shifted from business equipment to real property, including people’s homes and businesses; that would make school levies for the same dollar amounts more expensive for property taxpayers, and thus less likely to pass. Third, the lack of replacement money would cut into school districts’ property tax bases in future years, with some districts losing more than 50 percent.

Overall, Ferguson says, the draft bill is “notable for the adverse impact it will have on Idaho’s ability to provide funds for public education.”

Heavy trucks could roll statewide

With legislation already pending to make a decade-old pilot project permanent, new legislation was introduced Friday to expand the use of 129,000-pound semitrucks statewide, at the discretion of local highway districts. Districts would make the call based on road and bridge structural integrity standards and public safety, according to the bill.

It was introduced at the request of the Idaho Forest Group and will be referred to the Transportation Committee for a possible hearing. Already pending in the Transportation Committee is SB 1064, backed by the Right Truck for Idaho Coalition, to allow the heavier rigs permanently on the 35 designated Southern Idaho routes where they’ve been allowed for the past 10 years as a pilot project. Idaho truck weights otherwise are limited to 105,000 pounds.

Hearing put off

The hearing that had been set for Monday on a bill proposed by 16 House GOP freshmen to require more legislative oversight in the state insurance exchange legislation has been put on hold, at least for a day or two. House Speaker Scott Bedke, R-Oakley, said House leaders are examining whether it and SB 1042, the governor’s health insurance exchange bill that passed the Senate on Thursday, should be combined into one bill or left separate.

The House freshmen, led by Rep. Luke Malek, R-Coeur d’Alene, have pledged to support the governor’s bill only if theirs passes too.

Charter school funding bill emerges

Controversial legislation introduced in the House Education Committee on Thursday would siphon off a share of the state’s public school budget to pay for school buildings at Idaho charter schools, doling out payments to all charter schools through a per-student formula. Idaho traditionally has relied on local voters to raise their own property taxes to fund school buildings. The move clears the way for a full hearing on the bill.

Democrats decry initiative limit

House and Senate Democrats are decrying SB 1108, the bill proposed by the Idaho Farm Bureau Federation to make it tougher to qualify an initiative or referendum measure for the Idaho ballot. “This bill is part of a troubling trend that makes it easier for lawmakers and government officials to ignore the will of the people,” Sen. Michelle Stennett, D-Ketchum, the Senate minority leader, declared at a Statehouse news conference. The Democrats are calling on Idahoans to contact their legislators to oppose the bill.

The measure would require signatures from 6 percent of the voters in 18 of Idaho’s 35 legislative districts to qualify a measure for the ballot. The current requirement is 6 percent of voters statewide. Had it been in place in past years, the three referendums that overwhelmingly passed in November to repeal Idaho’s controversial school reform laws would not have qualified for the ballot, given where the signatures were gathered.


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