School buildings plan proposed

BOISE – School districts that won a lawsuit over how Idaho funds school construction want $50 million a year in state aid to help build and maintain schoolhouses.

“That will fix everything,” said Robert Huntley, the former Idaho Supreme Court justice who represented a group of school districts in their successful lawsuit against the state.

Huntley wants to devote half the money to a match of school districts’ voter-approved construction bond payments, on a sliding scale according to need. The other half would boost building maintenance so schoolhouses don’t deteriorate in the future, he said.

He’s even proposing a funding source: eliminating the sales tax exemption for utility sales, which would raise $67.1 million, or about $17 million more than is needed to fund the plan.

Lawmakers haven’t yet taken action on the school building issue, although they’re facing an order from the Idaho Supreme Court to do so. But a group of senators and representatives is working on a leadership bill to address the issue, which could emerge as soon as this week.

“We realize that something’s got to happen,” said Rep. Scott Bedke, R-Oakley. “I think there is certainly a resolve to try.”

However, Bedke characterized Huntley’s proposal as defining “maybe one end of the spectrum, moneywise. Our mechanism might not look like Mr. Huntley’s.”

Sen. Shawn Keough, R-Sandpoint, has reviewed the proposal from Huntley and the school districts and said it focuses “on some things that might be doable. … I applaud them for their effort at a compromise, and they’ve been creative in identifying a source of money.”

Keough said many lawmakers, including key members of leadership, come from parts of the state where school districts have used the current system to build adequate schools. And they aren’t enamored of the idea of now asking the whole state to help those who haven’t, she said.

Idaho relies almost entirely on property taxes to fund school construction. Local taxpayers must vote by a two-thirds majority to raise their own taxes in order to build a school.

“Many legislators here come from districts that have been able to fund their school buildings,” Keough said. “These legislators question why we can’t or we haven’t or we won’t. … There’s definitely a difference in the state between districts that do and districts that don’t.”

As a result, some want whatever school construction plan the state develops to punish school districts that haven’t already addressed their own needs – like the ones that sued – even though the Idaho Supreme Court ruled that the state Legislature ultimately is responsible.

“They are really angry that they perceive that they and their constituents are going to be forced to take care of communities that won’t take care of themselves,” Keough said. “They think in terms of, ‘If we are going to have to do this, we are going to make it painful.’ “

Rep. Steve Smylie, R-Boise, has been working on various versions of constitutional amendments to lower the two-thirds supermajority to pass school bonds. That was Gov. Dirk Kempthorne’s sole proposal to lawmakers this year to address the issue; the governor said his budget was prepared before the Supreme Court ruled, so he didn’t offer a financial plan.

“It’s not viewed with great enthusiasm by many people, and it’s a hard sell,” Smylie said.

That’s partly because concern about rising property taxes is a top legislative issue this year – and making it easier to pass school construction bonds would make it easier for property taxes to rise, if the state doesn’t pay part of the cost.

“Let’s face it: Do you want to run for re-election with ‘I raised property tax’ as a platform? Nobody likes that,” Smylie said. “But again, we have a problem. It has to be solved.”

Stan Kress, superintendent of schools in Cottonwood and the head of the group of school districts that sued the state, told the House Revenue and Taxation Committee last week that Idaho has to look beyond property taxes to meet schools’ needs. The problem, he said, is the ability to raise property taxes varies so greatly among Idaho school districts.

Five districts in the state have property values of $25 million to $30 million per support unit, which is a calculation representing classroom size that the state uses to determine school funding. Three have less than $2 million per support unit.

That means for every $100 per $100,000 property value the wealthier districts levy, the lower-value districts have to levy $2,500 per $100,000 just to raise the same amount of money.

“There are school districts in Idaho that, if they levy the maximum they can, still don’t have as much money as those other districts levying the minimum they can,” Kress said. In the lowest-value districts, “No matter how much they levy, they can’t get very much.”

House Majority Leader Lawerence Denney, R-Midvale, is leading the joint leadership effort to develop the bill. He declined to comment for this article.

Legislative budget analyst Jason Hancock, who’s been running numbers for the various lawmakers involved in the effort, agreed with Keough and Bedke that a bill could emerge by the end of the week.

Huntley said he picked the utility tax exemption as a funding source partly because he served in the Legislature in 1965 when the sales tax and exemption were created.

“The deal is we put that in, in ‘65, only because Idaho Power was threatening to lobby against the sales tax. They didn’t want to do the bookkeeping,” Huntley said. “That’s no longer an issue.”

Though taxes on power bills may not be popular, “everybody pays it – rich and poor, large and small business,” Huntley said. “This reduces property taxes, it’s across the board, and it provides new money.”

Keough said a task force convened jointly by Kempthorne and state Superintendent of Schools Marilyn Howard in 2003 proposed a good solution that’s serving as a starting point. That panel proposed aid to school districts similar to what Huntley’s proposing, but with a lower, roughly $38 million price tag, plus lowering the supermajority and taking several other steps.

Bedke said money for schoolhouse maintenance, expanding an existing bond levy subsidy program, a change in the supermajority and a fund to handle the worst cases all could be part of a solution.

“At the end of the day, I don’t think that punitive measures are going to carry the day,” he said. “This is serious business – we’re talking about kids that are at a disadvantage to get an education. The court confirmed that, so we’ve got to do something. It’s going to be more than we were doing in the past.”