Donna Yule: Personal property tax repeal threatens services

Published: January 14, 2013 

We rely on so many wonderful services in Idaho. We have police officers to keep our communities safe. A fire truck will show up if we call 911. We have parks where our kids and grandkids can play. Someone picks up our garbage when we put it out. The street lights come on so we can find our front door when we come home after dark. Teachers set our kids on the path to productive futures. These things are possible when residents and businesses come together with a shared vision of strong communities.

All of these public services will be at stake in the coming months when the Idaho Legislature considers modifying the business equipment tax, or “personal property tax.” We need to let our legislators know that we have serious concerns when our quality of life is at stake.

Completely repealing this tax would remove $140 million from our towns, counties and schools. Communities will be left with no choice but to slash vital services and shift taxes to home and small business property taxes. Some hard-hit areas would need to double property taxes to maintain their services. This makes housing more expensive for regular Idahoans and is especially hard on those with fixed incomes. It will mean even deeper cuts to our schools and it will put our communities at risk due to cutting police officers, firefighters, ambulances and other services we count on to be there when we need them.

Fortunately, there is a common-sense middle ground. This issue was debated thoroughly during the 2008 legislative session. Our Legislature had the wisdom to reject a complete repeal and enact a law that would exempt the first $100,000 of business equipment from the tax once state revenues grew enough to replace these funds.

If we were to exempt small businesses from this tax today, 90 percent of all Idaho businesses would be off the hook. But at the same time we would protect this critical revenue source for the communities that need it. We would forego just $18 million, instead of $140 million.

The 10 percent of business that would continue paying this tax would be large corporations, many with headquarters outside of Idaho. These companies pay the lion’s share of the business equipment tax. Some of these are out-of-state corporations that pay nothing or little in state income taxes, even when they have billions of dollars in profits. So property taxes are the way these businesses contribute to Idaho and the public services that help their businesses thrive. If we repeal the tax, those out-of-state corporations will get a giant tax break. Would those dollars stay in Idaho or be invested into our communities? We can’t have the things our communities need unless everyone is willing to pay their fair share, and that includes big corporations.

Our legislators are under a lot of pressure from big business and their lobbyists. They need to hear from you that we can’t make any more cuts to these vital services, and that a tax shift onto Idaho residents is not fair. If you want to follow the news articles concerning the attempt to repeal the business equipment tax, you can “like” the Facebook page “Save Our Services”.

Donna Yule is the executive director of the Idaho Public Employees Association.

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