Tax Would Pump Millions Into County Jail, Recreation Commission Must Approve Measure First; Then Local-Option Sales Tax Would Go Before Voters

Kootenai County voters could be asked in May to increase their sales tax to 5.5 percent to expand the county jail and create more recreational opportunities for young people.

The local-option sales tax is being considered as a way to improve county services.

County officials said between $4 million and $6 million could be raised yearly by such a tax. The tax measure would require 60 percent voter approval.

“I would like to see us buy into a program that would benefit everybody in the county,” Commissioner Dick Panabaker said. “The intent is to do something for the children of this county so we don’t need any more jails.”

Commissioner Ron Rankin said he also supports the local-option sales tax as a way to expand the jail. But he hasn’t decided how he feels about using it to increase other services.

“To me, it’s a terrific option,” Rankin said of the sales tax. “This is one way of weaning our capital expenditures, getting those off the property tax and onto an alternative tax form.”

Any tax measure placed before the voters would need to be adopted first by the commissioners.

Commission Chairman Dick Compton was not available for comment.

Kootenai County residents, along with the rest of the state, currently pay a 5 percent sales tax. The local-option tax would allow Kootenai County to increase its sales tax by one-half of 1 percent to 5.5 percent. On a grocery bill of $100, for example, people would pay an additional 50 cents.

According to state law, half of the money raised would be used to reduce property taxes. After the county sets its budget for the year, whatever money was due from property taxes would be reduced by half the amount collected from the sales tax.

The other half of the sales tax money would be used to improve county services.

If the county decided to pursue a local-option sales tax, the commissioners would write an ordinance detailing the rate of the tax, its purpose and its duration. The tax can be imposed for up to 10 years.

In 1996, the cities of Coeur d’Alene and Post Falls joined the county in lobbying the Legislature to approve the tax, which is only available to Kootenai County. The idea was to dilute the impact of tourism on local services by levying a tax paid by both residents and visitors.

Opponents of the measure said the higher sales tax hurts low-income residents, many of whom rent their homes, while only property owners would be rewarded with reduced taxes.

County Administrator Tom Taggart said Kootenai County was viewed as a “test case” for the local-option tax with the idea that if it worked, it could be expanded to other counties.

Coeur d’Alene City Council President Nancy Sue Wallace said any use of the local-option tax should benefit everyone.

“I would hate to see the money go only to a jail, Coeur d’Alene and Post Falls,” Wallace said. “There has to be something for Hayden, Spirit Lake, Rathdrum - everyone should benefit because everyone is paying into it.”

Though the City Council has not discussed the issue, Wallace said building a community center with a swimming pool, performing arts center or expanding the library would be high on the city’s wish list.

“If we can help the youth find alternate activities, maybe that would help decrease the population in the jail,” she said.

The city of Post Falls would like to see some of the tax money go to building a community center and more ball fields.

“We do see that we could benefit from this. We’re hoping we can take a share of that and provide some additional recreational facilities for the community,” said Jim Hammond, city administrator.

In the 1997-1998 fiscal year, Kootenai County generated more than $40 million in sales tax, said Joe Randall of the Idaho Tax Commission. According to those figures, the local-option sales tax would produce slightly more than $4 million yearly.

However, Taggart said, sales tax figures are not accurately tracked by county. If a business operates in more than one county, such as Boise-based Albertson’s, the sales tax figures do not show up as coming from Kootenai County, he said.

“About one-third (of sales tax figures) are not identified by county,” said Taggart, who believes the county would generate between $4 million and $6 million yearly using the new tax measure.

This sidebar appeared with the story: AT A GLANCE Local-option sales tax Who would benefit? The money would be used for: Expanding the Kootenai County jail. Increasing recreational opportunities, which could include building more ball fields in Post Falls (pictured above). Lowering property taxes.

When will a decision be made? Kootenai Commissioners first must decide whether to put the proposal before voters. If they do, 60 percent voter approval would be necessary.