A repeal of the personal property tax loomed on the horizon, as Rep. Grant Burgoyne, D-Boise, told the Associated Taxpayers of Idaho last week that he would support such a repeal.
Currently, personal property tax is charged on items used for a business, including furniture, uniforms, display racks, machinery and equipment except for farm equipment, computers and medical equipment.
Blaine County Clerk JoLynn Drage said the difference between personal property tax and real property tax is that personal property tax is portable, and not attached to real estate. Livestock, household items, personal effects and educational equipment are exempted.
Burgoyne told the conference on Dec. 5 that he has already drafted legislation that would eliminate the personal property tax—helping businesses, he said—while allowing counties and cities to raise taxes in other ways. Currently, county taxation authority is limited to increasing property taxes up to 3 percent per year and levying local option taxes in resort towns. Burgoyne said his bill will expand that authority to include taxes on liquor, meals, retail sales and even income.
“We’re talking about a tax shift,” he said, “unless we’re prepared not to have jails, unless we’re prepared not to have paramedics … but tax shifts aren’t always bad.”
Burgoyne said that if counties have other ways to make up the revenue, such a shift would be good for the state economy by encouraging more businesses to set up in Idaho.
But State Sen. Michelle Stennett, D-Ketchum, said earlier this week that she is concerned that fiscal ultra-conservatives in the Senate might cut taxes so far that cities and counties may be unable to function—or at least would be unable to maintain adequate law enforcement and emergency services, as Burgoyne alluded to at the conference.
“It’s unsafe,” she said. “Some of these counties, 50 percent of their budget is based on [personal] property tax. The cities and counties are in an uproar about it because they depend on that revenue. Without a backfill, they’re stuck, they’re stranded.”
Rep. Donna Pence, D-Gooding, said she believed that Lincoln County would be most affected in District 26 because of the high amounts of equipment involved with shipping and distributing companies that rely on the nearby railroad.
However, she said, Blaine County could be affected too.
“In Blaine County, there are a lot of small businesses,” she said. “Wherever you have businesses, if they don’t have that personal property tax, there’s going to be a certain percentage [of revenue] that the county won’t have.”
Wood River Economic Partnership Director Doug Brown said his organization, which represents local small businesses, has not taken a position on a personal property tax appeal.
Sun Valley Co. spokesman Jack Sibbach also declined to comment on whether the company would support a repeal, saying the staff didn’t know enough about the issue yet to comment.
All three Blaine County Commissioners were at the Associated Taxpayers of Idaho Conference last week, and spoke on the issue during a public meeting Tuesday.
Commissioner Jacob Greenberg said Blaine County receives roughly $100,000 from personal property tax each year—a number that Drage said was probably conservative, but that in any case makes up only a small percentage of the county budget.
Still, Commissioner Larry Schoen said he was concerned about the impacts to not only Blaine County, but also to other counties that depend more heavily on the tax.
“Repealing it is not as big of an issue for counties, cities and all of the other entities that benefit from [the revenue],” he said. “The issue is how to make up for that lost revenue.”
Jon Hanian, a spokesman for Gov. Butch Otter, said the governor could not comment on support for the repeal due to the upcoming State of the State address in January.
“I would tell you to stay tuned, because those are the kinds of things that could come up then,” he said.
Kate Wutz: firstname.lastname@example.org