Alltus’ Plan For Sales Tax Distribution Spurned

Rep. Jeff Alltus got slam-dunked Monday when he tried to push legislation to give fast-growing counties a fairer share of state sales tax.

Alltus, R-Hayden, didn’t get a single vote in the House Revenue and Taxation Committee, which dismissed his proposal as an attack on rural areas.

“If there seems to be an inequity, I don’t see it,” said Rep. Lenore Barrett, R-Challis.

“We don’t want to be messing with the distribution formula,” said Rep. Celia Gould, R-Buhl.

Alltus’ proposal concerned a chunk of state sales tax that now is divided among local governments on the basis of what those areas’ business inventories were in 1965.

That so-called business inventory replacement tax was directed to those areas back when Idaho first enacted its sales tax, because it replaced a business inventory tax that those counties relied on at the time.

“We’re talking about an issue of fairness here,” Alltus said.

Many things have changed since 1965. And the counties that have grown the most since then - like several in North Idaho - are being penalized by receiving the tax money only on the basis of 1965 figures.

“We need the money to be able to keep up with the growth,” Alltus said. “The only mechanism that is available to do that is increasing the property taxes.”

Alltus said the division of state tax proceeds shouldn’t rest on “some antiquated formula that is based upon something that was happening 30 years ago.”

His bill proposed leaving the $9 million now distributed through the formula at the same distribution used today. But if there is any additional money generated, it would be divided on the basis of current population.

That way, he said, no county would lose money because of the change.

Barrett admonished Alltus that “rural counties are just as important as the urban part.”

And Gould said, “I guess every session there’s a bill that you love to hate.”

This one was hers, she said.

Growing areas can generate more property tax, Gould said.

Rep. Frank Bruneel, R-Lewiston, said he recognized that the bill would die, but wanted committee members to bear in mind that counties with less population and growth have fewer needs for state tax funds.

“They don’t have some of the same growth problems that we’ve been experiencing with their school buildings and so forth,” Bruneel said.

Alltus said afterward that he had asked for weeks to have at least a week’s notice of the hearing, but was just told Friday that his bill would be up Monday. He had planned to have Kootenai County officials and others come testify, but he was the only one at Monday’s hearing.

“I gave it my best shot,” said Alltus, who called the business inventory-based distribution “terribly unfair.”

Kootenai County Administrator Tom Taggart said county officials backed the bill. Taggart proposed similar legislation two years ago, and it narrowly died in the same committee.

Taggart said Monday he hoped the Legislature would look into studying the fairness of its distribution formulas.

Rep. Hilde Kellogg, R-Post Falls, hinted she might have something in the works along those lines.

Early in the legislative session, Gov. Phil Batt said he has opposed the business inventory replacement tax approach since he served in the Legislature.

“I not only voted against it, I held hearings against it,” Batt told the Idaho Press Club. “I believe that needs to be revisited from time to time.”

, DataTimes