Senate President Pro Tem Brent Hill is probably right. He predicts the 2013 Legislature will do away with the “personal property tax,” which requires businesses to inventory, and pay tax, on furniture, computers and supplies as sundry as staplers.
Book it. This is a dead tax walking.
It may be the most hated tax in Idaho — and that’s saying something. As our editorial board has interviewed legislative candidates this fall, we have found almost unanimous support for getting rid of the tax. That cuts across party lines, since many citizen legislators, Republican and Democrat, are business people who have had to pay this tax. The kindest of the critics say this tax is onerous.
This uniform dislike of the personal property tax is not a new phenomenon. The 2008 Legislature approved a five-year phaseout of the tax — without a single dissenting vote. But the yearly reduction was tied to state revenue growth of 4 percent or better, a threshold that hasn’t been reached in the past four years.
So, eager to do something, lawmakers will take another swing at slaying this tax in 2013. That seems inevitable. The only question is whether they do it right, or do it wrong.
Hill, a Rexburg Republican and certified public accountant, is offering a sound approach. He wants to phase out the tax over six years but replace the $133 million to $143 million that now goes to local governments.
Makes sense. At the same Boise Metro Chamber of Commerce panel Thursday, Idaho Association of Commerce and Industry president Alex LaBeau pushed for a six-year phase-out but said the state should let local governments eat the difference. He argues that the local governments can cover the gap with the 3 percent property tax increase allowed under state law.
Let’s call that what it is. A tax shift, or at least a partial one. Businesses would enjoy the tax savings and reduced paperwork that come with the elimination of the personal property tax. Businesses would certainly pay some of the difference through increased property taxes, but so would homeowners and landlords.
Perhaps more significantly, LaBeau’s option would continue a troubling Idaho tax trend: cutting a tax without a clear way to pay for it. Lawmakers did this when they cut income taxes in 2001. They did it again in August 2006, when they cut property taxes for schools and raised the sales tax to make up most but not all of the difference. And they did it again this year, when they reduced the corporate income tax and the upper end of the individual income tax.
After a while, it gets to be a habit.
It will be intriguing to see which school of thought prevails on the personal property tax in 2013. In 2008, lawmakers resisted IACI’s push for a complete personal property tax repeal — a go-for-broke move that would have only deepened the fiscal crunch that gripped the Statehouse from 2009 to 2011.
Before following IACI, arguably the Statehouse’s most powerful lobbying outfit, lawmakers would be wise to ask themselves where that group would lead them.
MYSTERY MONEY
Melaleuca CEO Frank VanderSloot says it wasn’t him.
State Superintendent of Public Instruction Tom Luna says he’s in the dark too.
I refer to the still-mysterious $200,000 donated to Parents for Education Reform, one of the groups hoping to convince Idaho voters to uphold Propositions 1, 2 and 3, Luna’s Students Come First education laws. The money came from a group called Education Voters of Idaho, but the donor or donors remain unknown.
“I don't even know how many of them there are,” Luna told the Statesman editorial board Monday.
Lucky for Luna — and for the rest of us — that Secretary of State Ben Ysursa is on the case and is a stickler for that sticky thing called transparency. Ysursa, Idaho’s umpire on all things elections, is demanding that the donors reveal themselves. Education Voters of Idaho describes itself as a nonprofit, and, as such, its donors are shielded from disclosure.
To his credit, Ysursa isn’t buying. “It eviscerates the law if we don't get disclosure,” he told The Associated Press earlier this week.
The Republican Ysursa may be getting on the wrong side of Luna and his GOP allies, the folks who are pushing to rescue Propositions 1, 2 and 3 from a ballot challenge. But Ysursa is on the right side of the issue.
And there’s always this: Ysursa’s principled resistance gives the Students Come First backers one more thing to gripe about. They’re already stinging over the fact that opponents have outraised them by nearly 3-1 (even factoring the mystery money into the total). They’re grumbling because the vast majority of the opponents’ $1.38 million has come from state and national teachers’ unions.
Now, concerned that the Education Voters of Idaho money may be mired in a legal dispute until Election Day, VanderSloot is vowing to double down. Melaleuca has already contributed $160,000 to supporters and has bankrolled a series of full-page ads defending the laws. On Wednesday, VanderSloot said, “You’re gonna see Melaleuca’s name all over the place.”
Is that a promise or a threat?
It’s hard to feel too sorry for him. Especially since the problem of the mystery money could be easily solved.
Kevin Richert: 377-6437, Twitter: @KevinRichert
