Batt Gives Up On Further Cuts In Property Tax Governor Remains Firm About Highways’ Needs, But Won’t Commit To Specific Plans For More Cash

Idaho’s slowing economic expansion and continuing demands on increasingly restricted state resources prompted Gov. Phil Batt on Wednesday to abandon plans for any further state-paid cuts in property tax.

Batt also said that while he still believes more cash is needed to reverse the deterioration of Idaho highways, he currently has no plans to propose any kind of fuel tax or vehicle registration fee increase when he gives lawmakers his 1997 budget plan in January.

And he said he would press for bringing school districts under the consolidated election law that restricts balloting to four days a year. But the governor said he would not support reducing the two-thirds supermajority needed to pass school bonds, largely because he does not believe it would clear the Legislature. Simply moving school bond elections to one of the four major voting days each year, he said, should heighten their legitimacy and credibility with skeptical voters.

“During the campaign I had ambitions of going further with property tax relief,” said Batt, who pushed through a $40 million state-financed property tax cut last winter as partial fulfillment of a campaign pledge.

That reduction came in response to anti-tax activist Ron Rankin’s initiative threat for what critics said would be a severely disruptive property tax limitation. And it was supported by many lawmakers as the first phase of a four-phase program to shift basic property tax support for public schools to the state treasury.

But Batt, in accepting the final report of his Economic Stimulus Committee, said the state’s financial situation will not permit continuing the property tax-cutting program. He had previously said there would be no money in the 1997 state budget to implement phase two but had never indicated the assault on the property tax was over.

“The reality is there is not a lot of room for further state property tax relief,” Batt said. “Without raising some of the other taxes, I don’t see how we can do it.”

The governor said that did not mean he was no longer concerned about the resentment of property taxes - a resentment some maintain comes from a vocal but small minority of Idahoans. Because it comes from homeowners, he said he would consider increasing the benefits under the so-called circuit breaker property tax relief program, under which the state now pays up to $800 in annual property taxes for the elderly poor and disabled.

Batt also said he would introduce legislation recommended by the committee to use a three- or five-year rolling average for property evaluations if it is deemed constitutional. Using a rolling average, the committee said, would eliminate sharp upward spikes in annual property evaluations on which tax bills are based.

The governor’s position on the fuel tax was also somewhat unexpected after he said in his State of the State speech in January that he would address the problem of highway maintenance funds being eroded by inflation and two days later promised that action after departmental efficiencies and a more representative board were implemented.

He secured the expanded board and the department has been scaling back administrative and other expenses to put more cash on the roads, and Batt has repeatedly said over the past six months that there is a need for still more money to address a multibillion-dollar backlog of highway work.

His committee recommended a combination of higher fuel taxes and higher registration fees that exceed $20 million a year in revenue.

But on Wednesday, Batt said he would not prejudge what is necessary, mentioning instead the deliberations of a House-Senate committee on the highway needs question. That panel is expected to make a decision next week.