Idaho Governor Pushes Through Property Tax Swap


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In Idaho, anti-tax lawmakers are once again using fixed-income seniors as a political football to engineer across-the-board property tax reductions.

Temporary Idaho Governor Jim Risch called a one-day special session (held yesterday, August 25) to debate his property tax plan, which would cut Idaho property taxes for all homeowners and businesses by about 20 percent and make up most of the money by hiking the sales tax rate. As the Idaho Center on Budget and Tax Policy has noted, this tax swap will benefit wealthier Idaho families at the expense of lower- and middle-income taxpayers.

The plan also attracted criticism from Democratic lawmakers who have proposed targeting property tax cuts only to homeowners, and from a former state Supreme Court judge who says it's probably unconstitutional for the governor to hold a special session at which only one bill (his own) can be discussed.

But, in a depressing display of supermajority power, the legislature rammed through the Risch proposal in yesterday's special session. It took a very long day-- the Eye on Boise blog gave us running commentary on the progress of the session, including the (ultimately useless) procedural tricks used by minority Dems to try to slow down this steamroller--but in the end, the Risch tax shift was enacted.

You could fill a warehouse with what's wrong with this outcome, but there are two big ones:
1) the complete mismatch between the stated goal of Risch and the Republican leadership (helping fixed-income seniors) and what they ended up doing (helping everyone with one hand, and then taking most of it back with another).
2) the pointlessly antidemocratic way in which the special session was held. The refusal to hear out alternative plans for tax reform is the sort of thing we've grown accustomed to seeing from legislative leaders in Washington DC, but one would like to think that Idaho leaders could let policy, rather than politics, do the talking here.

This op-ed from last week's Idaho Statesman, in which a long-time House tax committee member asserts that the Risch bill is "the only way to give relief," is symptomatic of both problems. The author, Ken Roberts, clearly understands the current problem in Idaho, noting that "must decouple the school M&O from the huge market value increases that many parts of the state of Idaho are experiencing," and that the property tax as currently structured "does not look at the taxpayer's ability to pay the tax."

Well, we can talk about the different options available for fixing these problems, right? Maybe think about the merits of further expanding the homestead exemption, or putting some teeth in the state's circuit breaker credit by making more seniors eligible and extending eligibility to non-elderly homeowners and renters?

Actually, no. What Roberts does in his op-ed, as the legislature did yesterday, is simply to take a "my way or the highway" approach, asserting that the only possible way to fix these problems is by repealing the school property tax without saying a word about why more targeted (and less costly) alternatives aren't worth thinking about.

The good news, sort of, is that Idaho voters will have a chance to cast a (purely advisory) vote on whether the legislature did a good thing yesterday. Although one wonders, if the legislature wasn't willing to listen to informed minority viewpoints within its own ranks, how seriously it will entertain the views of Idaho voters this fall. Stay tuned...

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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