Special session on taxes to open
BOISE – Idaho legislators will gather Friday for the 27th special session of the Legislature in the state’s history to decide whether to enact Gov. Jim Risch’s tax reform plan – to cut property taxes and raise the sales tax.
Gavels will fall in the House and Senate chambers to start the session at 8 a.m., followed by a meeting of the House Revenue and Taxation Committee at 9 a.m. to hold a hearing on the governor’s bill. If it clears the committee, as expected, the bill then moves to the full House, and then the Senate and the governor’s desk.
Risch wants the session to last just one day – and House Speaker Bruce Newcomb plans to leave on a family fishing vacation to Alaska on Saturday – so both houses would have to suspend their normal rules to pass legislation so quickly. That can be done by a two-thirds vote in either chamber.
Here’s what’s in store, what’s at stake, and how to watch it as it happens:
The governor’s bill
The Idaho Constitution puts the governor in charge of what’s taken up at a special session, and Risch has limited this session to just one bill: RS 16445. If, as expected, the House committee votes to introduce the governor’s bill, it will be assigned an official House bill number, and as the first (and only) bill of the session, that’ll be HB 1.
The bill calls for eliminating the current school operations property tax levy, which would cut $260 million in property taxes; raising the sales tax from 5 percent to 6 percent on Oct. 1 to generate at least an additional $210 million a year; and shifting $50 million from the state’s $203 million budget surplus to close the resulting gap in school funding.
It also calls for adding an additional $100 million from the surplus to a savings account for schools to hedge against future economic downturns; and asking voters in the November election, in an advisory measure, whether they approve of the changes.
The Democrats’ bill
Minority Democrats, who hold just 20 seats of the 105-member Legislature, have their own alternate proposal, RS 16446. It would eliminate the school operations property tax levy only for homeowners, and take $104 million from the state surplus to make up the lost school funding. It wouldn’t change the sales tax.
Neither Risch nor GOP legislative leaders have made any provision for the minority plan to be heard in the special session, though the proposal has been posted on the Legislature’s Web site at the request of the House and Senate minority leaders.
Who’s for, who’s against
Among those endorsing the governor’s bill are House Speaker Bruce Newcomb and Senate President Pro-Tem Bob Geddes; the Idaho Association of Commerce and Industry, an influential business lobby; most North Idaho legislators, including Sen. Shawn Keough, R-Sandpoint and Reps. Frank Henderson, R-Post Falls and Bob Nonini, R-Coeur d’Alene; Kootenai County Assessor Mike McDowell; and Republican U.S. Rep. Butch Otter, who’s running for governor.
Among those opposing it are all seven presidents of Idaho’s public colleges and universities; the Idaho School Boards Association, Idaho School Administrators Association, Idaho PTA and Idaho Education Association; state Superintendent of Schools Marilyn Howard; Senate Tax Chairman Hal Bunderson, R-Meridian; and Jerry Brady, the Democratic candidate for governor.
Pros and cons
The governor says his plan will provide property tax relief to all Idaho property owners – homeowners, businesses, farms and more – without cutting education funding. The levy that would be eliminated is the only major part of Idahoans’ property tax bill that’s tied directly to real estate values, which are growing quickly; other levies are subject to growth caps. The $100 million fund to protect schools would hedge against varying sales tax revenues in future years. Also, Idaho’s sales tax was at the higher 6 percent level for two years, until a year ago, and surveys showed Idahoans didn’t mind the higher rate. Plus, tourists would pay $15 million more a year to fund Idaho government and education under the plan, due to the increased sales tax.
Opponents say the current property tax funding for schools is stable even in economic downturns and fear that switching to sales tax will be more volatile and less conducive to local control. Some want the current budget surplus used to boost schools, rather than just keep them funded at the same level, or want to use the surplus to expand higher education. Also, Idaho fully taxes groceries with its sales tax, meaning the poorest state residents will pay more for necessities such as food to fund property tax relief for others. Opponents also say business property hasn’t seen the same soaring property taxes as homes but would get a large share of the relief.
See it happen
Idaho Public Television will broadcast the major debates of the special session live on the Internet at www.idahoptv.org. IPTV also will air a special edition of “Idaho Reports” at 8 p.m. Friday, featuring interviews, highlights and analysis of the session.
The Spokesman-Review’s “Eye on Boise” blog, at www.spokesmanreview.com/boise, will track happenings at the special session, and news updates will be posted on www.spo kesmanreview.com.
The House and Senate floor sessions and committee hearings are open to the public; public galleries for viewing the House and Senate sessions are located on the fourth floor of the state Capitol in Boise, as are legislative committee hearing rooms.
The full text of the proposed legislation is on the Legislature’s Web site at www.legislature.ida ho.gov. After the votes are in on the bill, they, too, will be listed on the site.