Cities concerned about tax repeal

Idaho cities report that the total repeal of the personal property tax for large businesses would be destructive, without full replacement of the lost revenue. Idaho Democratic lawmakers heard these reports after reaching out to city leaders across the state.

Most Idahoans are urging a balanced approach to this issue in a way that helps Idaho businesses prosper along with Idaho families and communities. As two bills to repeal business personal property tax work through the Legislature, we continue to weigh their merit. One bill is a full repeal and proposes replacing the resultant $120 million cut with state dollars. A second bill would be aimed at cutting taxes for small businesses and cost about $19 million.

We encourage Idaho citizens, businesses and communities to contact their legislators and to give input and help guide our decision. This policy decision must be based on how it affects Idaho families, Idaho businesses and Idaho communities.

Our survey to 204 towns returned 100 responses. Please note that at the time of the survey, the governor was not proposing a robust replacement of the funds lost to the repeal. Among the highlights:

  • Aberdeen would lose 40% of the tax base.
  • American Falls describes the cut as “devastating,” with 47% cuts to schools and 12% to 15% cuts to the city.
  • Blackfoot would lose $170,000.
  • Boise would likely cut services to make up for the $10 million budget hit.
  • Bonners Ferry would cut city jobs.
  • Caldwell would have higher taxes than other cities to try to sustain services.
  • Cambridge would lose about $3,500, which is nearly the entire $4,000 police budget. The school district would lose 24% of its budget, and the library district about 27%.
  • Challis reports that the repeal would “cripple” community services.
  • Coeur d’Alene would lose nearly $1 million, about 5% of the city budget.
  • Deary city officials predict long-term difficulty for the school district.
  • Driggs would see a 3.54 percent cut after cutting the budget over the past five years.
  • Eagle would lose $59,000.
  • Emmett would cut city staff by one employee and reduce police and road services.
  • Glenns Ferry would expect “serious hardship”.
  • Gooding would lose $55,000, which is more than half of the fire department budget.
  • Grangeville would lose $35,855.
  • Greenleaf would decrease police, parks and non-utility operations.
  • Homedale would lose money used for police, library and parks.
  • Horseshoe Bend will lose 8.45% of revenue.
  • Iona would lose money to spend on city maintenance.
  • Jerome would lose about 25% of the budget, and cut 14 public safety workers and four other city employees.
  • Kootenai would have trouble recovering from the 5% cut to the city budget, while still addressing infrastructure and storm water needs.
  • Kuna worries about cuts to the school district and fire protection.
  • McCall would need to find other sources to make 13 years of bond payments.
  • Meridian would lose $1.2 million, or 5.8% of the budget.
  • Moyie Springs will lose $7,500 from a $50,000 budget.
  • Nampa cannot replace funds, even with a gradual phase out, and would decrease in police and fire personnel.
  • New Meadows describes the repeal as “a burden” on the community and the businesses there.
  • Nezperce would lose 10% of their annual budget.
  • Pierce would lose $50,000.
  • Plummer would lose 47% of their general fund budget.
  • Potlatch worries about a loss of 50% to the school district budget, and other county and highway district cuts.
  • Stites sees no way to replace the loss to general funding.
  • Rexburg would likely cut three police officers.
  • Richfield would close the library, cut emergency services, stop watering and maintaining the cemetery, and cut snow removal.
  • Rupert reports the repeal as “devastating” for the city and Minidoka County.
  • Shoshone would no longer have a 24-hour police force.
  • Smelterville would lose about $10,000 from their budget.
  • Paul would cut public safety services and streets, causing small local businesses to suffer.
  • Pocatello described the cut as “unworkable” and predicted cuts to public safety and transportation, even after eliminating parks, recreation, or library budgets.
  • Ponderay would take “a huge hit.”

Without replacement funds, a full repeal of the business personal property tax would affect county, highway district and school budgets.

Copies of the survey are available upon request to Jennifer Martinez, chief of staff for the House Minority Caucus.