Idaho law requires 50-50 revenue split

The city of Sandpoint has sued the Independent Highway District three times within the past several years, in the apparent belief that litigation is better than cooperation. The city’s first two lawsuits went to the Idaho Supreme Court resulting in judgments in favor of the district and against the city. Last week, the city filed a new lawsuit without discussion with the district; ignoring the district’s offers to resolve the issue without the expense and negative energy of litigation.

Idaho law provides for a 50/50 sharing of district property tax revenues when a city maintains its own streets. This statutory formula reflects the reality that city residents drive on roads outside the city. For example, many Sandpoint residents drive to Schweitzer, and on other streets maintained by the district.

Idaho law also provides that if the district maintains city streets, the district retains 100 percent of its property taxes. Thus, Sandpoint has a choice under Idaho law. Sandpoint can maintain its streets and receive one-half of the property taxes. Or, the district can maintain Sandpoint streets, in which case the district keeps all of the district’s property taxes. The district is willing to honor either choice. If Sandpoint wants to maintain city streets, it can do so, and receive the statutory 50 percent.

Sandpoint desires to receive all district property taxes collected from city properties for the construction and maintenance of the district’s roads. The city’s desire violates Idaho’s statutes and Constitution. This alternative is not allowed by law, and not followed by any other Idaho city or highway district.

It is important to understand that what is at issue is the district’s property tax levy. If the district’s property tax levy was eliminated, the city would receive nothing.

The city is taking a big risk by filing its third lawsuit against the district. The city has illegally received $2.7 million of the district’s property tax revenue. The district offered to forego collection of these illegal payments as a part of a non-litigation settlement. Rather than discuss the district’s offer, Sandpoint filed a lawsuit, thus risking a court order that it must repay the illegal payments made to the city.

The Independent Highway District remains willing to resolve these matters amicably with Sandpoint and hopes that Sandpoint will move toward cooperation rather than litigation.

• David Wynkoop is a Meridian attorney who represents the Independent Highway District.