Tax plan passes; Burden shifts from property to sales

Gregory Hahn
Idaho Statesman
The Idaho Statesman | Edition Date: 08-26-2006

Almost as many Republicans as Democrats vote against the plan in the House

It wasn't pretty — and it certainly wasn't quick — but Gov. Jim Risch has his tax bill to sign.

His plan to cut property taxes by about one-fifth and raise the sales tax a penny passed the Legislature more than 14 hours after the gavels fell to start Friday's special one-day session. Risch plans to sign the bill next week.

The measure will:
• Eliminate the $260 million property tax for school maintenance and operations.
• Raise $219 million a year by raising the sales tax from 5 percent to 6 percent starting Oct. 1.
• Use the $200 million surplus to cover the rest of the costs of the property tax cut and to pour $100 million into a rainy day fund for schools.
• Add a question to the ballot in November to ask voters if they agree with the changes.

Risch said the bill would provide substantial property-tax relief. The bill sputtered through a stilted House hearing Friday morning that was overflowing with people, although just two members of the public were allowed to testify. It survived several procedural attacks and a 21/2-hour debate on the House floor and passed 47-23 with almost as many Republicans (11) as Democrats (12) voting against it.

The plan sparked a 6-3 vote in the Senate tax committee, which is chaired by one of the idea's biggest opponents. The bill passed the Idaho Senate late Friday night, 24-11, proving Risch had indeed convinced the very lawmakers who killed similar ideas three times in April. "It's not a quick fix," McCall Republican Rep. Ken Roberts said. "It's a long-term solution that we talked about here today."

Democrats tried but failed throughout the day to get their alternative proposal heard.

They wanted to cut the school tax only for people who own the homes they live in — not businesses, vacation-home owners or farmers — at a cost of $105 million a year, without raising the sales tax. Senate Democrats tried repeatedly to lodge an official protest, saying Risch's bill and his calling of the special session were unconstitutional. But Majority Leader Bart Davis, an Idaho Falls lawyer, thwarted the attempts with the help of Republican Lt. Gov. Mark Ricks, who was presiding over his first — and probably only — legislative day.

Former Supreme Court Justice and Democratic lawmaker Robert Huntley has said Risch's call was illegal. Idaho Democratic Party spokesman Chuck Oxley said the protest was a "legal bookmark" that could help a lawsuit to block the changes if Democrats or other Idahoans decide to sue. Risch has argued for the past month that the concepts he included in the bill have been hashed out before. To be sure, few new ideas were brought forward Friday.

No Republicans joined Democratic efforts to thwart the progress of the day's actions, but some spoke strongly against what the bill would do.

Boise Rep. Steve Smylie, who recently lost the GOP primary for superintendent of schools, spoke for about half an hour against the measure in the House. Meridian GOP Sen. Hal Bunderson, in his last likely appearance as the chairman of the Senate tax committee, had agreed with his fellow Republicans that he wouldn't block the bill from moving to the floor for a full vote, but he didn't withhold his criticism.

"I'm deeply concerned that this bill has more to do with education than it does with tax policy," he said. "We are changing in a day the way we fund education in a very profound way."