A Caldwell senator is working on a bill that would shift school supplemental property taxes to the sales tax, Betsy Russell of the Idaho Press reported Saturday.
“We’re at the cusp of a property tax revolt,” Sen. Jim Rice told Russell.
Rice’s bill would raise the state sales tax from 6 percent to 7 percent, to replace supplemental levies.
A one-cent increase in the sales tax would generate about $280 million, Russell reported. This year, schools collected a record $214 million in supplemental levies, approved by local voters.
The supplemental tax bill has increased rapidly since August 2006, when lawmakers approved a massive tax shift engineered by then-Gov. Jim Risch. The tax shift eliminated some $260 million in school property taxes. A one-cent sales tax increase, then worth about $210 million, was supposed to cover most of the difference.
In 2006-07, 59 school districts collected $79 million in supplemental levies. Today, 92 of Idaho’s 115 school districts collect a supplemental levy.
Rice’s bill would also direct $30 million in sales tax revenue to cover grocery tax relief. Gov. Brad Little last week proposed using $35 million in proceeds from online sales tax collections to cover grocery tax relief — but that sum would not be enough to cover an outright and complete repeal of the sales tax on groceries.
Rice chairs the Senate Local Government and Taxation Committee. However, Rice cannot simply run the bill through his committee; all tax legislation must originate in the House.
“I think I likely could get it printed and have a hearing,” Rice told Russell.