UV Eye Opener, Week of Mar. 10 - 14, 2008

published Monday, March 17, 2008

404 Views

A tactic to make it appear like they are responding. Rapid growth has consequences: congestion, pollution and – as we saw tragically again this week – traffic deaths. In the Treasure Valley, community organizations, local governments and many civic leaders have worked long and hard to come up with solutions. In the 1970s, when resort communities asked for the option to invest in community assets using sources other than property taxes, the legislature granted them local option taxing authority. Year after year, the coalition “Moving Idaho Forward” has asked for similar authority to help them invest in public transit and other assets to address serious, life-threatening problems. Opponents in the legislature (the Republican leadership, in fact) have adamantly refused, treating local government with disdain that borders on contempt. This year, reacting to growing public pressure, opponents came up with a new tactic to make it appear as though they were responding: an amendment to the Idaho constitution (House Joint Resolution 4).

Protecting taxpayers from themselves (but not from the legislature). After waiting ten weeks into the session, the opponents of local option unveiled HJR 4 on Thursday and had a public hearing the next day. Rep. Mike Moyle, Republican majority leader of the House, insisted on party discipline despite strong opposition from local governments, chambers of commerce and a bi-partisan group of community leaders. Moyle and his co-sponsors tried to spin their cause as “protecting the taxpayers.” From whom? From their own local governments and their fellow taxpayers? What taxpayers really need to be protected from are consequences of all the tax breaks that Moyle and a majority of his colleagues have handed out to privileged interests. Those tax breaks shift the burden onto ordinary taxpayers by narrowing the tax base. This cripples local taxpayers' capacity to invest in long term assets like public transit to strengthen the economy and the quality of life. If the sponsors of HJR 4 are so interested in having taxpayers vote on tax policies, they would let them vote on each and every one of those tax breaks. Some good discussion here.

Speaking of more tax shifts… Since our local governments have to be dependent on property taxes (because the legislature doesn’t trust them with other options) and since many businesses don’t own a lot of real property, businesses pay what is call a “personal property tax” on things like equipment. There is a good case to be made that the administrative costs for small businesses to comply with personal property tax regulations are not worth the revenue the tax generates. Not so for big corporations. Proposals have been made to exempt the first $50,000 in personal property. This takes care of over 80% of all Idaho businesses but only reduces revenue by about $9 million. Lobbyists for Idaho’s biggest corporations (Idaho Association of Commerce & Industry - IACI), however, want the whole thing repealed which would cost $120 million and shift more of the local property tax burden onto homeowners. In some small counties like Power County that shift would be massive. IACI needs the sympathetic small businesses as their cover. So, late in the session again, IACI got its friends in the legislature to hold a hearing on House Bill 599 just one legislative day after it was printed.

Eight is not Enough. After listening to the arguments about the administrative costs that small businesses have to absorb to comply with personal property tax regulations, a group of 8 legislators took that at face value and proposed amending the personal property tax to exempt the first $50,000 of value rather than repeal it entirely. IACI panicked knowing it will be much harder to come back in future years to try to repeal the rest for big corporations. Their cover would be gone. But they also knew that this is an election year. Legislators have to raise money to get re-elected and big corporations have PACs and lobbyists to generously dispense them. Very few small businesses have the money to create PACs let alone hire lobbyists. In this case, eight legislators was not enough and their amendment failed on an 8-10 vote. The full house will vote on Monday. Here is a blog entry to comment on.

Financially stressed schools turn to junk food profits. Since the legislature has given away whole chunks of the tax base they have made inadequate investment in public schools. School districts have limited options to raise other money locally. So when snack marketers offer to put vending machines in the schools in exchange for giving the schools a cut of the profits, school districts find it financially hard to refuse. Of course, there is far more profit in candy and chips than salad and granola bars so guess which kind of food is commonly sold to kids through vending machines? The consequences are bad nutrition, obesity and dental problems. Legislators concerned about these consequences voiced them on Monday with House Concurrent Resolution 55, which encourages schools to adopt nutritional standards for food and drinks sold in school vending machines. The need was obvious, but the debate mostly centered more on the “trees” – whether these decisions are best left at the local level – and than on the “forest:” the legislature’s culpability for putting schools in this financial “Catch 22.” Add your comments here.

Hitting the road. After lots of big words by from the Legislature and the Governor, bills to raise money for to pay for roads finally started moving this week. House Bill 632 will increase registration fees by $24 per car and House Bill 631 will increase fees by even more for larger vehicles like RVs. Before these two headed to the House floor on Wednesday, three more bills were introduced. House Bill 639 will shift $22 million in sales tax revenue from the general fund and into highway fund (with no source of replacement funds). House Bills 640 will increase specialty license plates by $10 and House Bill 641 will impose a 4% tax on rental cars, both of which will go into the highway fund. So far, sponsors are not suggesting that to “protect taxpayers” any of these measures should first be approved by a 2/3rds vote of the people.

Bills on party registration and closed primaries introduced. Pundits and legislators have been talking for over a year about changing Idaho's long history of using an open primary system. Idaho has no party registration so our system allows voters to select which party ballot they would like to vote in on primary election day. On Friday, the Senate introduced Senate Bill 1506 to require voters to register by party and to vote only in their own party’s primary. Unaffiliated voters could choose. The bill gives parties the right to exclude unaffiliated voters, but then the party rather than the taxpayers, would have to pay for the election. There is some great research on this issue by The Common Interest. The same committee introduced an alternative Senate Bill 1507 suggested by Secretary of State Ben Ysursa to abandon Idaho’s tradition of letting voters keep their party identification confidential. Voters would still have their choice of which party primary to vote in but that choice could be made public. Since Idaho’s primary is just over two months away and the end of the session is about two weeks away, the chance that either bill will make it through the session is slim. However, some Republicans have threatened to sue if the legislature does not create a closed primary system so we may see the issue shift from the statehouse to the courthouse.