Gov. Butch Otter said he supports a broad local-option tax Monday, saying such levies could help offset repeal of the $141 million personal property tax that supports, cities, counties, schools and other local governments.
Otter introduced the idea in his State of the State and Budget message, which began at 1 p.m. Local officials have sought broad, voter-approved local-option authority for more than 30 years. But lawmakers have resisted, except to permit resort cities to apply the tax with voter approval. Among those levying a local sales tax are Sun Valley, Ketchum and McCall. Voters in Sandpoint recently rejected the idea.
After his speech, Otter said he hasn't specified which form of local taxation he would support, only that he wanted to jump-start the debate and encourage local officials to weigh in.
The personal property tax is paid on business equipment. Repeal is the top priority of the Idaho Association of Commerce and Industry.
A repeal plan was passed by the 2008 Legislature covering the first $100,000 of personal property, fully repealing the tax for 85 percent of Idaho businesses. But because state revenue growth lagged, a trigger implementing the relief has not been pulled.
In the prepared text, Otter said nearly everyone agrees the personal property tax is an unfair drag on our economy.
I believe we now have consensus that accomplishing that should be a priority for this legislative session, Otter said. The question is how.
As you know, personal property tax receipts are a significant part of how some of our counties pay for public services. Whether the tax is eliminated all at once or phased out over a few years is less important to me than an exit strategy that considers our counties financial stability.
That isnt necessarily about using State revenues to make counties 'whole.' In fact, my preference is granting local-option taxing authority that enables county voters to decide for themselves how to address their most pressing needs. However, I also have set aside $20 million in my budget for easing counties transition. I look forward to hearing your debate and considering your alternatives.
House Speaker Scott Bedke, R-Oakley, was among legislative leaders who received a briefing before the speech.
Otter didnt detail the plan, aside from saying hed earmarked the $20 million.
Im open to listening, Bedke said before the speech began. As a general rule, Im warm to every idea this early in the session well, most every idea.