It’s not the several thousand dollars in tax that Kevin Settles pays on the so-called personal property in his restaurants that rankles him. It’s having to keep records on that property — every chair, stapler, computer and television — so it can all be assessed and taxed.

And what the state collects is “a negligible amount for the amount of work that has to be done,” said Settles, who owns the Bardenay restaurants in Boise, Eagle and Coeur d’Alene.

Proposals to end Idaho’s personal property tax, which requires businesses to self-assess and report the value of nearly every item they own, are likely to resurface this year. The Idaho Association of Commerce and Industry, one of Idaho’s most powerful lobbying groups, is pushing to eliminate it with the backing of the Boise Metro Chamber of Commerce and other business groups.

The association says the administrative burden and cost of the tax dampen business expansion and the jobs that come with it.

The tax raises $130 million a year for counties and other taxing districts. It’s rolled into their budgets for everything from salaries to road work. Attempts to reduce the tax in the past were fought by local governments that feared the consequences of the lost revenue.

Even before a bill appears, Sen. Tim Corder, R-Mountain Home, the new chairman of the state Senate’s powerful Taxation and Local Government Committee, has lined up a couple of economists to critique the association’s evidence that eliminating the tax would lift the Idaho economy. They will testify Tuesday.

A 2007 study commissioned by the association estimated that every $1 reduction in the personal property tax would “boost the after-tax income of Idaho residents by more than $6.”

One of the economists dismisses that.

“This is beyond incredible,” said Stephen C. Cooke, a recently retired University of Idaho agricultural economist. “It is extremely optimistic about what the benefits to the economy would be.”

Economic multiplier effects, which tend to show how money is spent and re-spent through the economy, almost never reach a factor of 6, Cooke said.

Alex LaBeau, association president, defends the study. “We’ve got a lot of economists with a lot of opinions,” LaBeau said.

He won’t get a chance to defend the study at Tuesday’s hearing. He’s not on the agenda to speak.

“I wasn’t invited,” he said. Corder said he wants to kick the tires on the association study to help the committee understand it, so he invited Cooke and Mike Ferguson, former state economist and director of the nonprofit Idaho Center for Fiscal Policy.

As for the association, “I will do that at another time,” Corder said, noting that it has not yet proposed a bill.

The association and the committee have had tender negotiations in the past. LaBeau didn’t propose a bill last year because he was told he couldn’t get a committee hearing in the Senate under then-chairman Joe Stegner, a Lewiston Republican who left the Senate last month to become a lobbyist for the University of Idaho.

Stegner acknowledged he wouldn’t give the bill a hearing but declined to say why.

A CHILLING EFFECT?

LaBeau said the personal property tax gives businesses one more reason not to locate or expand in Idaho.

Settles, the Bardenay owner, said he considered the tax’s burden when he was deciding whether to open a restaurant in Washington or Oregon several years ago.

He settled on Coeur d’Alene instead and opened in 2003. He decided to stay in Idaho, he said, because it offered more business-friendly rules for the distillery side of his restaurant operations. Bardenay makes gin, vodka and rum.

Corder questions the IACI study, too. There is no guarantee that businesses freed from paying the tax would necessarily plow its savings into more jobs or a bigger plant, particularily if they’re corporations that have a duty to stockholders to maximize returns, he said.

But he said he’s open to the argument that the tax is onerous.

Perhaps businesses should be willing to look at reducing other tax exemptions they receive so local governments don’t lose revenue, Corder said.

LaBeau disagrees. “We didn’t do that for agriculture” when its equipment came off the personal property tax rolls in 2001, he said. “We didn’t do it when we expanded the homeowners’ exemption.”

Idaho already has a personal property tax relief law on the books, but it has yet to be used. The law exempts the first $100,000 of equipment from taxation once the state’s revenue grows 5 percent over its 2008 level. The revenue lost would be made up from the state’s general fund, which draws its revenue from all taxpayers, not just businesses.

NOT ENOUGH GROWTH

The recession has kept that threshold out of reach. Once reached, the law would eliminate the personal property tax on 60,000 businesses, based on a 2009 estimate, and reduce the tax for others.

But companies with a large amount of equipment wouldn’t save much. And the exemption applies to a company’s total equipment in a single county. So a business with two operations in a county could get only $100,000 off, while a business with two locations in two counties could take off $200,000.

“It’s a big negative,” said Settles, who has two restaurants in Ada County and one in Kootenai County.

The commerce and industry association proposes wiping out the tax in one step when the state’s revenue reaches $3.08 billion, up 8 percent from 2008.

Such a shift will result in “lower investment in something,” Cooke said. “If you (cut) revenue, you are creating a deficit in services.”

Bill Roberts: 377-6408