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Funding, taxes and the Idaho Legislature

by REP. MARK SAUTER / Contributing Writer
| February 25, 2024 1:00 AM

We have finished seven weeks of the 2024 legislative session. It looks like we have four to five weeks to go.

This year, more bills and resolutions have been introduced than in the past five years (over 800 and counting). It takes time to deliberate and process all of them. I know more bills will be introduced next week, and there are quite a few very important funding bills being developed as well.

Yesterday, members of the House voted on a school facilities funding bill. Our state constitution directs the Legislature to fund and support our public school system. The bill (HB521) dedicates $125 million of state sales tax revenue to the new School Modernization Facilities Fund for bonding. The school funds will help districts pay down school bonds, levies, and plant facility levies, and be used for facility projects.

The drafters of this bill are forecasting the following distributions for Legislative District 1 school districts: Boundary County $5.282 million, Lake Pend Oreille $14.681 million, and West Bonner County $3.934 million.

It is important to note that all three of our school districts have well-known facility needs. While the funds from HB521 are significant, our school facility needs are not "made whole" with this bill alone. During the debate for this bill, many other sources of funding were mentioned that should be explored in future legislative sessions.

Sales tax revenues have consistently increased for many years as our population has grown. HB521 also provides the Legislature with expanded options to cover the bond service in the event of economic downturns. This legislation also increases the amount of sales tax revenue directed to the facilities fund. There are concerns in the Capitol that a slowdown in our economy is inevitable. So anytime a program is funded with variable funds (i.e., sales tax), it is responsible to provide some "back-ups."

Many of you know that the Idaho Constitution directs us to write bills that cover single issues. For example, a tax bill should not include policy issues for an agency. However, the lines get blurred when taxes are involved, especially when education gets mixed in. For HB521, the common denominator is sales tax and how it is used.

HB 521 also reduces the state income tax from 5.8% to 5.695%. The forecast for this tax reduction is a savings of over $46 million in individual taxes and approximately $12 million in corporate taxes. Over the years, a significant number of tax exemptions have been made into law for various purposes. After yesterday’s extended debate, it looks like the list of exemptions may be re-visited. However, there was no commitment.

There are some local control elements in HB521. Some believe students learn better in a five-day school week environment than in a four-day school week. I’m not sure about the science behind this, but there are economic issues as well. Running school transportation systems and staffing schools for five rather than four days per week is more costly. Teacher and staff retention is also an issue.

I voted for HB521. I believe the bill will help District 1. As with many bills, there are things I wish we could include or exclude and that I’m concerned about. We have more to do to address the needs of our schools. HB521 is a step in the right direction. Compromise is a part of the reality of the dealmaking between Idaho Gov. Brad Little and House and Senate leadership to get votes and support necessary for a major bill.

Thoughts, feedback, insights? Please let me know. You can email me at msauter@house.idaho.gov.

With the automated message systems employed by some groups, many legislators are now receiving 100 to 200 emails per day; sometimes considerably more. Most messages do not request a response. I will continue to try to answer messages from our district when asked.


Mark Sauter represents Bonner and Boundary counties in the Idaho Legislature in District 1A. He can be reached at msauter@house.idaho.gov.