Lewiston floats local option sales tax proposal

Board members from the Lewiston Independent School District are looking to gain support for a proposal to allow districts to use a local option sales tax to pay for schools facilities construction.

isbaThe proposal is one of several that school trustees from Idaho will consider when they gather in Coeur d’Alene Nov. 11-13 for the Idaho School Boards Association’s annual conference.

In Lewiston, three school facilities bonds failed in the past decade after falling short of the two-thirds supermajority requirement needed for passage.

District leaders say their proposal is designed to offer up an alternative for residents when it comes to repaying school bonds.

“It takes that 66-and-two-thirds percent supermajority to pass a facilities bond, and it is all borne by property taxpayers,” Board director Brad Rice said. “Some of the feedback that we received in our district is that patrons would view it slightly more favorably if it could be on a local option sales tax, as opposed to property tax.”

Lewiston Superintendent Robert Donaldson said the timing for such a move might be right. Last year, the county ended a 10-year-old, half-cent sales tax increase that was used to pay for a new county jail.

“That was successful,” Donaldson said. “With that (local option sales tax for the jail) being retired, some patrons are asking some questions about why can’t we do that for a high school as well.”

During last year’s ISBA convention, Lewiston board members unsuccessfully brought a similar proposal. But they brought it directly from the floor of the convention, last-minute.

This year, they had the chance to vet it in front of their community and circulate the idea before the convention actually begins.

“Our sense is we need as many tools as possible and multiple options to address our facility needs,” Rice said.

Rice said feedback in and around Lewiston is mostly positive, but he’s heard some concerns. He knows out-of-town residents who do their business in Lewiston may not be thrilled to see sales tax increases to pay for a high school. And he isn’t sure that the proposal directly benefits Idaho’s smaller, rural districts because they might not have the tax base to pay for facilities through a sales tax increase.

“I get the sense that it is not really a high priority for our Legislature — my sense is it may be tough for it to gain traction,” Rice said.

But with Lewiston looking to upgrade its facilities — and looking to move their ninth-grade students into the high school that now serves grades 10-12 — district leaders seek flexibility and options.

Donaldson said board members may meet Monday to consider minor tweaks to the resolution prior to the convention. Nothing is final, but district leaders may add a statement calling for the Legislature to form an interim committee to look at the idea and consider recommendations. And they may attach another statement saying that local option sales taxes are not the final solution to Idaho’s school funding issues for all districts.

If the local option sales tax resolution passes during the ISBA convention, ISBA leaders will lobby for the plan during the 2016 legislative session. Legislators would need to amend existing state laws governing repayment of school bonds and local option taxes in order for the proposal to become legal. Then any district like Lewiston would need approval from voters to increase the sales tax for school buildings.

The full text of the Lewiston resolution follows:

WHEREAS, the State of Idaho grants school districts the authority to issue negotiable coupon bonds to finance the construction of school facilities and capital improvements in amounts restricted by Section 33-1103(3), Idaho Code upon the approval of 66.67% of the voters in the district; and

WHEREAS, Idaho Code provides for repayment of such school bonds by the levy of taxes on real and personal property situated in the district; and

WHEREAS, the question of a bond levy for the construction of a new facility in school districts is oftentimes presented to the voters numerous times and school districts are still unable to garner the required 66.67% in favor of the question; and

WHEREAS, after the unsuccessful bond levy elections, many electors consistently express agreement that the facility is in need of repair or replacement, despite the electors’ objections to a property tax levy; and

WHEREAS, many constituents have indicated support for a local option sales tax to finance the construction of facilities and have encouraged districts to work with the Idaho Legislature to provide the mechanism to permit submittal of such a question to the electors for authorization;

NOW THEREFORE BE IT RESOLVED, that the Idaho School Boards Association support changes to Title 67, Idaho Code to provide for authority of school districts to submit to the qualified school district electors the question as to whether the board shall be empowered to levy a local option sales tax for the repayment of principal and interest on negotiable coupon bonds financing the purchase, construction, or capital renovation of school facilities for a period of time not to exceed thirty (30) years.

STATEMENT OF PURPOSE

School districts statewide have found it difficult to pass traditional bond levies with the required 66.67% majority. Electors have expressed concern that the levy of tax on real and personal property places a disproportionate burden on the owners of real estate as a basis for their unwillingness to support bond levy elections. These electors further have expressed a preference for a local option sales tax as a mechanism to provide funding for school construction because the sales tax is borne by a broader range of the population.

Check back with Idaho Education News all next week for coverage of the ISBA convention and action on the proposed resolutions.