Bieter wants transit. State won’t let Boiseans tax themselves. Now Bieter sees end run

For most of his 15-year tenure, Boise Mayor David Bieter has wished that his city’s voters had the authority to raise the sales tax.

The Association of Idaho Cities was on board even before that. And city leaders from Idaho Falls to Meridian to Coeur d’Alene agree.

Their efforts have come up empty. Proposal after proposal has failed to advance in the Idaho Legislature.

Undeterred, Republican Sen. Lee Heider of Twin Falls plans to introduce a bill next year allowing cities and counties across the state to hold votes to raise local sales tax rates. These “local option” taxes could pay for public amenities like roads, community centers and public transportation.

Bieter isn’t holding his breath. In his Sept. 12 State of the City address, he talked about cutting the Legislature out of the local option debate. He would instead get behind a ballot initiative, through which voters across the state would directly authorize such elections.

Bieter wants the money for transit. “If we stake too much of our future on vehicles, we’re going to see gridlock,” he said. “We need a funding source. For 30 or 40 years, local governments ... have gone to the Legislature and said, ‘Don’t give us money. Just give us the authority” to ask voters for it.

His spokesman, Mike Journee, said, “The residents of Idaho most likely support this, and so let’s ask them directly and not let Statehouse politics make the decision on it.”

Bieter has considered the initiative route for years, but a serious effort never materialized. Successful citizen initiatives are rare in Idaho. Separate campaigns this year put Medicaid expansion and mechanized horse-race gambling on the November ballot, the first propositions to qualify since 2012.

“They’re statewide initiatives that potentially could provide a playbook for how something like local option could pass,” Journee said.

As with local option taxing authority, the Legislature has refused to expand Medicaid. Its members banned gambling machines for historical horse racing in 2015.

What is local option tax?

An initiative would ask all Idaho voters if they want to give cities and counties authority to raise the sales tax within their boundaries.

Passage of such a ballot measure would not itself raise taxes. Instead, it would allow local taxing districts to hold such elections in the future. Today, Idaho law allows only resort towns with populations of 10,000 or fewer to increase sales taxes. Just 14 Idaho cities, including McCall, Donnelly, Stanley, Ketchum, Driggs and Sandpoint, levy their own sales taxes.

Across Idaho, city leaders frame local option taxing authority as a matter of “letting our folks vote,” as Coeur d’Alene City Administrator Troy Tymesen said. Twin Falls City Manager Travis Rothweiler agreed.

“We would just like the opportunity for our citizens to determine whether or not they want it, and then to assist us on how we would allocate it if we were given the authority,” Rothweiler said. “Right now, we’re prohibited from even asking the question.”

Lewiston Mayor Michael Collins said he wants legislators to practice what they preach.

“At the city level, we complain about the state not allowing us to do things that we need to do at our level, and at the state level, they complain about the federals doing the same thing to them,” Collins said. “A little bit of freedom here and there to decide what’s best within our communities would be nice.”

How to keep taxes in check

Proponents of giving cities and counties this authority suggest limits to ensure taxes won’t get out of control. For example, Heider’s bill would limit the sales tax increase to 0.5 percent for a single city or county, or 1 percent for multiple municipalities — say, two cities and the county they’re in — that form a new sales taxing district.

An initiative likely would prescribe similar limits, Journee said, but the amount hasn’t been determined. Additionally, each tax increase might have a maximum time period, perhaps several years, during which it can be levied.

Heider’s bill would prohibit using the stream of tax money to secure debt. Bill Connors, executive director of the Boise Metro Chamber of Commerce, said his organization agrees with that restriction.

A voter initiative might also limit the ways local option tax money could be spent. The details present a tricky political line. Restrict spending options too much, and the initiative might lose support from crucial cities or counties.

“It would need to be as broad as possible so that it’s flexible and it makes sense for other communities,” Journee said. “That’s the epitome of local control.”

On the other hand, if voters deems the rules too loose, they might think the new taxing authority would green-light government slush funds.

Rothweiler doesn’t think local option taxes should fund core city responsibilities such as police and fire protection. Bieter wants a better public transportation system. Heider wants a community center for Twin Falls.

Collins said Lewiston might improve streets or build a new swimming pool. Coeur d’Alene could use the extra money for streets, too, Tymesen said.

How does the initiative process work?

Just putting a measure to authorize local option tax elections in front of voters is a challenge. An initiative requires signatures from 6 percent of the registered voters in the most recent even-numbered year’s general election.

And those signatures can’t all come from one area. Organizers must get 6 percent of electors in at least 18 of Idaho’s 35 legislative districts to sign their petition.

There were 936,529 registered voters in the Nov. 8, 2016 election. So the Medicaid expansion and historical horse racing campaigns each had to collect at least 56,192 signatures for their petitions. A similar number of signatures likely will be required for future initiatives. Each one must be verified by the clerk — an elected position — of the county where the signer lives.

Bieter wants to see how the horse racing and Medicaid initiatives fare on Nov. 6 before deciding his next move on local option taxing authority, Journee said. Ballot initiatives can take place only in even-numbered years, so 2020 is the earliest local option authority would appear before voters.

This story was originally published October 8, 2018 at 6:37 AM.