Bill Would Change Sales Tax Distribution

A plan to update the way Idaho divides up sales tax proceeds was introduced Monday by a unanimous vote in the powerful House Revenue and Taxation Committee.

Rep. Hilde Kellogg, R-Post Falls, is co-sponsoring the plan with Reps. Dennis Lake, R-Blackfoot, and Lee Gagner, R-Idaho Falls. It would give more money to fast-growing areas, as opposed to Idaho’s current formula, which relies on 1965 business inventories to decide which area gets how much.

As a result, cities that have grown since 1965, such as Post Falls and Coeur d’Alene, get far less than those that haven’t, such as Lewiston.

Kellogg’s plan, which failed by one vote in the House last year, would let every community keep what it gets now, plus 5 percent growth. Additional revenues beyond that would be divided by population.

That plan, a compromise worked out by a study committee that Kellogg headed two years ago, would mean only small, incremental changes in how the money is divided. But over time, fast-growing communities would get back a little bit more of what they pay in.

Rep. Mary Lou Shepherd, D-Prichard, said she’s torn over the idea. Her district includes both Kootenai County, which would benefit from the change, and Shoshone County, which might not.

The Revenue and Taxation Committee will next schedule a public hearing on the bill, possibly as soon as next week.