Tax Panel May Offer Changes In School Funding

The House tax committee has spent considerable time this legislative session talking about proposals to change the state tax system, but so far hasn’t passed anything of note.

That may change this week.

Members of the Revenue and Taxation Committee will decide today the fate of legislation that would shift major public school funding from local property taxes to sales tax. The measure is sponsored by Rep. Frank Bruneel, R-Lewiston.

At the same time Monday, the panel voted to decide local option tax bills sponsored by the Association of Idaho Cities and the Idaho Association of Counties. Both measures are given only the remotest chance of passage.

In the Senate, the Local Government and Taxation Committee sent to the full Senate a bill sponsored by Sen. Stan Hawkins, R-Ucon, to eliminate about $150 million per year in local property taxes for school operations. The Hawkins bill doesn’t specify how the cash is to be replaced.

Bruneel’s bill promises a $140 million property tax cut. But even so, committee members raised questions about his plan, and it’s uncertain whether it will get out of committee.

Bruneel said his legislation boils down to a simple question: Do lawmakers want to cut local school property taxes and have school maintenance and operations funded through the sales tax?

“It brings $140 million worth of property tax relief that would be immediate and permanent,” Bruneel said.

Although the tax shift would cut property taxes, it also would boost their federal and state income taxes, Rep. Dave Bivens, R-Meridian, noted.