Idaho Democrats offered conditional support Tuesday for Gov. Butch Otters plan to eliminate the $141 million personal property tax on equipment to help businesses, insisting that the state protect local governments from lost taxes.
Idaho businesses are lobbying for the cut this year with an intensity that Otter says hes never before experienced.
The governor said Monday that he favors giving cities and counties the power to ask voters to approve local option taxes to help replace money they would lose from elimination of the tax on businesses.
But Boise Mayor Dave Bieter, one of the states most vocal supporters of giving cities local option authority, is waiting for details.
The city has long sought to allow cities and counties the authority to improve their communities in the way their citizens want, spokesman Adam Park said Tuesday. These improvements could include municipal infrastructure, public transit and even property tax relief.
However, the city has never sought local option simply to fill a hole created by new statewide legislation.
Boise hopes that any personal property tax solution avoids shifting the burden to residential taxpayers or requiring cities and counties to cut vital services, Park said.
Senate Minority Leader Michelle Stennett said local governments must be shielded from cuts to critical services that are now paid for by personal property revenue, which is generated by taxes on everything from computers to big transmission lines and railroad tracks.
The Legislature must ensure that school districts arent forced to slash budgets and degrade educational opportunities further, said Stennett, D-Ketchum. And we must not raise taxes on homeowners.
House Majority Leader Mike Moyle said he favors a phased-in elimination of the personal property tax over the next five years, without the local option tax.
Such a proposal would include some state replacement money, and Otter has so far offered to chip in $20 million. But future funding for local government services would mostly rely on the assumption that revenue would increase from a growing economy.
United Vision for Idaho and United Action for Idaho, which include labor and human rights activists, claim that Otter favors business over ordinary workers.
His proposal would award business property tax exemptions and burden rural communities in particular with the cost of offsetting these, the groups said in a statement.
Otter offered few details about his plan but did say that he wont demand that a two-thirds vote requirement for new local option taxes be anchored in Idahos Constitution.
Five years ago, it was just this demand from Moyle and other Republican leaders that helped torpedo a previous effort by local governments, Boise included, seeking to tax themselves.
But cities and counties couldnt stomach a two-thirds vote requirement, and the effort died.
Though Otter said Monday thats not on his list of demands this year, he pointed out that legislative leaders might insist on a constitutional amendment again.