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NIC’s reliance on property taxes draws questions

BOISE – Lawmakers brought up a longtime sore spot during North Idaho College’s budget hearing at the state Legislature on Tuesday: Why does the Coeur d’Alene community college get so much of its funding from property tax, compared to the state’s other two community colleges, and why do only Kootenai County residents pay that tax, when NIC serves all five of the North Idaho Panhandle counties?

“Why do we continue to expand to those counties if they’re not covering the cost of the expansion?” asked Sen. Steve Vick, R-Dalton Gardens.

NIC President Joe Dunlap responded, “First of all, we have been charged by the Legislature to serve those five counties. … We have populations that need to be served in those northern counties. And so, from an ethical perspective, we as a college, from my point of view, have an obligation to serve those students.”

That could be by online courses and distance learning, he said, or with outreach centers. “But asking students to come from Bonners Ferry to NIC to attend is not practical – the distance is too long, especially in the winter,” Dunlap said. “So the question becomes, how do we serve those students, regardless of whether it’s a cost benefit to us to serve them?”

Sen. Shawn Keough, R-Sandpoint – who is from Bonner County - said, “That’s been an ongoing question from Kootenai County legislators for a long time.”

Though only Kootenai County pays property tax to support NIC, all counties in the state whose students attend the college pay $500 per academic student per semester to the college from their share of state liquor funds. That’s a 1982 formula, however, and some counties – including Benewah and Shoshone counties in North Idaho – don’t get enough in liquor funds to cover the cost, so they have to dip into their county budgets.

“It certainly may be time for our counties to re-evaluate what makes the most sense,” Keough said. “Bonner County might be better served by a property tax, as opposed to the liquor tax.”

Dunlap said he and the heads of Idaho’s two other community colleges, the College of Western Idaho west of Boise and the College of Southern Idaho in Twin Falls, are working with the Idaho Association of Counties on possible revisions to the liquor tax distribution formula.

Vick lauded the move. “It would seem like 40 years is probably long enough to go without seeing whether it’s correct or not,” he said.

NIC has outreach centers in Sandpoint, Bonners Ferry and the Silver Valley, and also provides services in St. Maries and Plummer.

Dunlap, who also addressed the Senate Education Committee on Tuesday, told senators, “NIC is the only college that has one county supporting its tax base. The other two have two counties. … It’s a tension-filled issue, there’s no question about it, but I believe we’ve got a moral obligation to provide that access to our citizens.”

The College of Western Idaho charges property taxes in Ada and Canyon counties, but its service area also includes all or part of eight other counties. The College of Southern Idaho gets property taxes from Twin Falls and Jerome counties, but also serves all or part of eight others.

In 2012, NIC collected $13.4 million in property taxes, 36 percent of its $35.8 million budget from all funding sources. Dunlap said the amount has risen recently due to a mill site purchase. CWI collected $5.5 million in property taxes, 21 percent of its overall $26 million budget; and CSI collected $5.2 million, 17 percent of its overall $31.2 million budget.

Gov. Butch Otter has recommended an 8.9 percent increase in state funding for community colleges next year, to $30.2 million, but the colleges have requested a 41.2 percent increase to $39.2 million. Nearly all of the increase Otter recommended would go to fast-growing CWI, which has only been open a few years and has seen explosive growth.