Tax bills sent to Senate floor
BOISE – The Senate tax committee Tuesday sent three bills to the full chamber for further discussion – and possible amendment – after 1 1/2 hours of testimony on measures that passed the House on Feb. 21.
The first day of Senate hearings on the legislation was held in the Borah Post Office because meeting rooms in the Statehouse next door were too small to accommodate the 100 people who listened or testified.
One bill sent to the Senate floor aims to close a loophole in a tax break meant for farmers, but that developers and other landowners such as Gov. Dirk Kempthorne have exploited since 2002 to cut taxes on valuable rural homesites to just pennies.
Another would boost the tax-exempt share of assessed value of homes to $75,000 from $50,000, the level since 1982, and index the new amount to inflation.
And the third would expand a tax break for an additional 10,000 low-income, elderly and disabled homeowners annually, boosting the combined break to as much as $6.6 million.
Property taxes are one of the major issues of the 2006 Legislature. More than three dozen related bills having been debated already. Some homeowners say their taxes have risen disproportionately in comparison with other classes of property taxpayers, including businesses, and they’re demanding relief.
“This is a rebalancing of an imbalance that’s occurred over time,” Don Reading, an economist who works with the low-income advocacy group United Vision for Idaho, told the nine-member committee chaired by Sen. Hal Bunderson, R-Meridian.
Homeowners now shoulder about two-thirds of Idaho’s $1.1 billion property tax bill. That’s up from just 40 percent a quarter century ago.
The Senate Local Government and Taxation Committee has five more House bills to consider by Thursday.
They include:
“Establishing a revolving loan fund to pay property taxes for low-income seniors.
“Shifting $125 million in school maintenance funding to the state general fund.
“Raising the sales tax by a half penny on the dollar to cover for the school-maintenance funding shift.
Not everybody was enamored with the bills being discussed. Some say they don’t go far enough.
Nothing on the table Tuesday amounted to substantive relief, said Charles Cline, president of the Idaho Property Tax Reform group in Orofino that’s still trying to gather more than 47,000 signatures for a ballot initiative to limit state taxes to just 1 percent of total assessed value.
“The $25,000 increase in the (homeowner’s) exemption is not going to impact property tax bills very much,” Cline said. “If you’re going to do tax reform, do tax reform.”
The Idaho attorney general last year raised issues with Cline’s proposal, including questions about its constitutionality.
The Senate doesn’t amend bills during committee meetings, a quirk of the chamber that served to abbreviate Tuesday’s debate. Instead, changes to bills take place on the floor, during open debate.
If a bill gets amended, it’ll be returned to the House for another vote – or considered during a possible meeting of a so-called “conference committee” of four senators and four House members aiming to strike a bargain.
Among amendments under discussion is a proposal calling for phasing in a $75,000 homeowner’s exemption, instead of doing it at once, Bunderson said.
Also, a separate proposal to eliminate personal property taxes – advocates include the business group Idaho Association of Commerce and Industry – is on the table. Those taxes generate some $190 million in annual revenue.
“There will be a variety of discussions – and posturing, I suspect – as people try to get amendments that they want,” Bunderson told the Associated Press.