House Majority Leader Mike Moyle’s proposal to divert a portion of property tax from cities, counties and other taxing district to school districts for school construction has a powerful ally: the Idaho Association of Commerce and Industry.
“It’s the best idea for managing school growth that I‘ve seen in the last 20 years,” said Alex LaBeau, association president.
Moyle expects to introduce his proposal to the Legislature this week that would require taxing districts to turnover 50 percent of they revenue they get from construction of new buildings in the year they were built.
In 2014, property tax revenue from new construction in Idaho totaled $20 million. Under Moyle’s plan, public schools — including charter schools —would have gotten $10 million to spend on school building safety, paying down bonds, or new school construction.
Idaho cities, counties and other taxing districts get property revenue from new construction — subdivisions and commercial buildings — to help offset costs associated with growth. School districts don’t. As new kids show up to classes, districts don’t get anything from the growth to help pay for new buildings to house them, so they return to district property tax payers to pass a bond for the money to build schools.
West Ada School District will come to voters March 10 for passage of a $96 million bond for new schools.
LaBeau says Moyle’s plan is a good tool for schools. “It’s revenue that should probably be going to the schools,” he said.
LaBeau doesn’t see the dollar shift as working a hardship on cities and counties. A portion of their property tax revenue would be deferred for one year, until the new construction is incorporated into their tax base.
Boise and Meridian city officials aren’t talking about Moyle’s plan until they see a bill.
Eagle Mayor Jim Reynolds, however, sees a problem. The city has not taken the three percent increase in its budget allowed each year and held its property tax rate flat. But if it loses a portion of the new construction tax revenue, which was nearly $90,000 for Eagle in 2014-2015, the city may have to consider increasing its property taxes rate, he said.
Read our coverage of the school property tax plan here.