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Panel Will Hear ‘Resort County’ Bill Tax Legislation Is Tailored Specifically For Kootenai County Economy

By Betsy Z. Russell betsyr@spokesman.com(208) 336-2854

Coeur d’Alene, Post Falls and Kootenai County won a small victory Tuesday when a powerful legislative committee agreed to introduce their local sales tax bill.

Lobbyist Chuck Lempesis gave the House Revenue and Taxation Committee a brief outline of the bill, which allows “resort counties” to ask voters to approve a special local sales tax. At least half the proceeds from the tax would go directly to property tax relief.

The bill’s definition of a “resort county” is one that has more than 80,000 residents, is within 50 miles of a county with a population of more than 350,000, and derives “a major portion of its economic well-being” from tourists and travelers.

Kootenai County is the only such county in Idaho.

Before the committee could discuss the bill, Rep. Hilde Kellogg, R-Post Falls, moved to introduce it. A quick unanimous vote followed.

Now the bill will come back to the committee for a full hearing.

Kootenai County Administrator Tom Taggart, who attended the hearing, said Kellogg’s support was key. “She’s well thought of on that committee.”

Kellogg is also the committee’s only member from the Panhandle. The powerful committee, where all tax legislation must start, is heavily dominated by representatives from rural southern districts.

The committee last week killed a bill that would have let “resort cities” throughout the state hold votes on local sales taxes. Idaho now allows such taxes only in resort cities with populations of less than 10,000.

Rather than pin their hopes on that bill, North Idaho officials had one tailor-made.

“This legislation would not work for everyone,” Lempesis told the committee.

But a small sales tax hike in Kootenai County to relieve property taxes might make sense, he said. Residents of adjacent Spokane County pay 8.1 percent sales tax, and are unlikely to notice the difference if Kootenai’s 5 percent tax gets a tiny hike.

Kootenai County’s problems are unique, Taggart said after the meeting.

If you look at who goes through the county jail and court system, “a huge percentage are not residents.”

Tourists and people passing through also put pressure on Kootenai County’s law enforcement, firefighting, roads, parks and other services. And the local property taxpayers have to pick up the tab.

The legislation comes right out and says “The Legislature finds that it is both equitable and desirable to shift this tax burden … to those visitors.”

“I think it’s a better-written bill than we’ve seen before,” Taggart said.

Rep. Wayne Meyer, R-Rathdrum, attended the meeting and said he’s supporting the bill. “It’s good for Kootenai County,” he said.

During the same meeting, the committee killed bills to:

Freeze residential property values for five years, then phase in increases. Rep. Marvin Vandenberg, D-Coeur d’Alene, the sponsor, said, “The public out there is getting tired of the smoke and mirrors that we’re giving them and saying it’s tax reduction. Homeowners only saw 30 percent of the tax relief”’ from last year’s $40 million property tax relief bill.

Committee members said Vandenberg would either shift the taxes to commercial and farm property, or force hikes in other taxes. “It’s not going to help the problem,” said Rep. Donna Jones, R-Payette.

Let the homeowner’s exemption from property taxes rise with inflation. That bill was killed on a 9-8 vote. The exemption is now limited to $50,000.

Repeal all tax exemptions, from property, income or sales tax, after 10 years, unless the Legislature specifically re-enacts them. Rep. John Alexander, D-Pocatello, said tax exemptions are investments of the taxpayers’ dollars and should be reviewed. But Rep. Celia Gould, R-Buhl, said, “If you see some exemptions that shouldn’t be there, then bring in a bill.” Alexander’s approach sounds like a back-door way to eliminate important exemptions that benefit a large segment of the population, she said.

, DataTimes MEMO: This sidebar appeared with the story: THE BILL The bill introduced Tuesday for Kootenai County would: Allow county residents, by a 60 percent vote, to approve a local sales tax. The tax would apply to everything now subject to the Idaho sales tax and likely would be a penny or less per dollar in sales. Require at least half the proceeds to go directly to property tax relief. County Administrator Tom Taggart said he thinks the county could do more - as much as 75 percent or 80 percent going to property tax relief. Voters would decide. Stipulate that the vote be during general or primary elections. There would have to be at least one year between such elections. Require the ballot question to state the proposed tax rate, the purpose and the duration, which could not exceed 10 years.

This sidebar appeared with the story: THE BILL The bill introduced Tuesday for Kootenai County would: Allow county residents, by a 60 percent vote, to approve a local sales tax. The tax would apply to everything now subject to the Idaho sales tax and likely would be a penny or less per dollar in sales. Require at least half the proceeds to go directly to property tax relief. County Administrator Tom Taggart said he thinks the county could do more - as much as 75 percent or 80 percent going to property tax relief. Voters would decide. Stipulate that the vote be during general or primary elections. There would have to be at least one year between such elections. Require the ballot question to state the proposed tax rate, the purpose and the duration, which could not exceed 10 years.