Share your views on tax with legislators

It has been a while since I wrote an Assessor’s Corner. There is now something new that I would like to bring to your attention.

You may have read about or heard that there is talk in Boise about not having a personal property tax at all or have it in a limited manner. Gov. C.L. “Butch” Otter is supporting a change in this tax that is a tax on all local business equipment and what is called centrally assessed property, which is any real and personal property operated in connection with a public utility or railroad. The Idaho State Tax Commission assesses the utilities and railroads and all other business personal property is assessed by our office.

The governor’s budget proposal shows $20 million to help reimburse the counties for any lost revenue from personal property taxes. The total personal property tax levied in Idaho is about $141 million. Obviously that figure in his budget would not make the counties whole but I understand the governor might plan to have an additional $20 million in each year’s budget (for seven years) which might indicate some sort of phase out of the tax.

The original law passed a few years ago would have excluded all personal property from taxation under $100,000 which would be roughly 75 percent of all businesses in Bonner County. It also provided for the state to reimburse the counties for the lost taxes.

There are many proposals being discussed in Boise. That law was not to take effect until the state revenues rose 5 percent from the base year which has not happened, and the extra revenue was to provide the funds for county reimbursements.

I imagine that there is a lot of pressure in Boise from business to do away with all of the personal property tax or at least part of it.

If all the tax is cancelled, Bonner County would lose about $1,534 million in revenue — about 8 percent of our budget — and the city of Sandpoint would lose about $220,979 — about 6.5 percent of their budget. All other taxing districts would also lose their personal property tax revenue.

If these tax dollars were not replaced by the state then one of three things would most likely happen:

1. Budgets would have to be cut enough to make up for the lost revenue. This would mean that services provided to the taxpayers would have to be cut. Every time any government body proposes cutting services there are people who line up on both sides of every proposed cut so it is always difficult to get consensus on what should be cut.

2. The residential and commercial property owners would make up the losses by having a higher levy and consequently higher taxes on their properties.

3. Some are saying that we should have the ability to vote on a local option tax to make up a shortfall.

Option 2 or 3 would require Bonner County taxpayers to pay more taxes and, in actuality, if the state does reimburse us that is still part of the tax we pay to the state.

Whether or not you favor canceling all or part of this tax probably depends on whether or not you are billed for personal property tax on business equipment. Of course, those who own real property in Bonner County and also personal property would see one tax go away or lowered and another tax raised.

At this point we have no idea what will come out of this Legislative session so if you have an opinion you may want to contact your legislative team.