Keough: Local option tax idea intriguing - Bonner County Daily Bee: Local News

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Keough: Local option tax idea intriguing

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Posted: Tuesday, January 8, 2013 10:00 am

SANDPOINT — Local authorities could someday have a larger hand in paying the bills based on a vision outlined Monday by Gov. C.L. “Butch” Otter.

Perhaps the most discussed aspect of Otter’s address centered around his advocating for the repeal of Idaho’s personal property tax, which generates $141 million in revenue each year. His budget includes $20 million to facilitate the transition from that income stream. However, the most interesting thing about the proposal to District 1 Sen. Shawn Keough, R-Sandpoint, are his ideas of how to cover that lost revenue.

“I’m intrigued by his mention of local option taxes in his discussion about repealing personal property taxes,” she said, adding,

“That’s one way that local jurisdictions could make up that lost revenue. This discussion will unfold in the next couple of weeks.”

According to Otter, allowing local communities to propose their own taxing strategies would put the big decisions regarding spending in the hands of community members.

“My preference is granting local-option taxing authority that enables county voters to decide for themselves how to address their most pressing needs,” Otter said in his address, later adding, “I look forward to hearing your debate and considering your alternatives. Like our counties, our state has the right and we certainly have the responsibility to keep as many options as possible open to the people.”

As a region filled with towns which qualify as resort communities, or cities that generate a significant part of their revenue through tourism, many Bonner County communities already exercise the right to implement local option taxes through Idaho’s resort city tax allowances. Both Sandpoint and Ponderay have hotel taxes implemented to generate income from visitors, and both made unsuccessful bids in the 2012 November election to establish a local option sales tax.

According to Keough, another interesting aspect of the proposed repeal is that legislation already exists to accomplish just that. The Idaho Legislature passed a bill years ago to phase out personal property tax.

“The Legislature has a repeal on the books, but it’s tied to certain growth triggers,” she said.

Thus far, Idaho’s economy has not grown to the point where the bill would kick into effect. However, the bill remains as one option to accomplish that goal.

According to Keough, Otter’s general budgeting approach reflected an accurate assessment of the state’s current economic condition.

Otter’s budget estimates a 5.27-percent increase to revenue for the 2014 fiscal year with modest spending increases to match. Keough said those numbers were a sensible reaction to improved revenues.

“I’m pleased that he recognized the economy is still rebounding from the downtown and being conservative as he moves forward,” she said. Finally, Keough praised Otter’s reaction to the repeal of the Students Come First education reforms.

While Otter threw his full weight in support of the reforms prior to the election, Keough said he’s recognized that the measures were not the true will of the people.

“He’s really set the tone for an inclusive and thorough discussion rather than saying, ‘It’s my way or the highway.’ ”

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  • 50degreesN posted at 11:00 am on Sat, Jan 12, 2013.

    50degreesN Posts: 29

    I have been sitting back and reviewing all the comments and feel all of you are missing one key point. Sandpoint council continue to make irrational decisions when it comes to expenditures of our tax dollars. As I see businesses close at a staggering rate in sandpoint while new businesses are opening in ponderay and coeur d'alene and council does not have any business acumen to solve this problem. Sandpoint has become a ghost town.

    Do any of you really to empower them to make proper tax decisions.
    I haven't even talked about the courthouse fiasco, the outsourcing of parking etc. oh that's right, they would keep raising sales taxes to make up for stupid decisions.

    The stewards or our money or the stooges of our money.

  • Original Sandpointman posted at 5:18 pm on Fri, Jan 11, 2013.

    Original Sandpointman Posts: 92

    the problem is truly misunderstood. Shawn Keough says " the most interesting thing about the proposal to District 1 Sen. Shawn Keough, R-Sandpoint, are his ideas of how to cover that lost revenue."

    government needs to quick thinking that its there money. They call it "lost revenue" its not lost, it my money that you should have to do without!

    So, Shawn & government, DO WITHOUT. We the people sure the heck are.

  • KJB posted at 2:41 pm on Fri, Jan 11, 2013.

    KJB Posts: 588

    How would you like to inventory every item in your home...every piece of furniture, ever piece of electronic equipment, every computer, cell phone, etc. And then do it again the following year? Making note of what property your sold or no longer had?

    It is a burdensome thing for a business to do...not to mention the annual tax you pay.

  • KJB posted at 2:39 pm on Fri, Jan 11, 2013.

    KJB Posts: 588


    'Big business' also pays property taxes and other taxes. I am not sure where you think they get off scot free from paying their 'fair share' of the tax burden in the state. What about sales taxes? gasoline taxes? lodging taxes? Businesses pay these types of taxes too.

    This business property tax is a burden on business owners. H

  • LawrenceFury posted at 12:13 pm on Fri, Jan 11, 2013.

    LawrenceFury Posts: 777

    Lakeviewer is right, with perhaps the exception of small businesses, this one party rightwing state, aka the Republican lap dogs of the rich and corporations trumpet lower taxes, then whisper: "For the Rich and powerful." Where does anyone other than these...people think they'll make up the tax money all levels of govt. wants and/or needs? It'll be passed along, again, to the average person who is already scraping by in many cases on the non-living wages the the likes of Simplot and Albertsons and Walmart pays. Over the last 2 - 3 decades since this became a one party state, the tax burden has shifted from about 60% business and high income people and 40% income tax to if this passes, 30% Business/rich and 70% of the burden on everyone else.

  • Luv83864 posted at 10:42 am on Fri, Jan 11, 2013.

    Luv83864 Posts: 702

    At my old business I paid $110 dollars and nearly everything I had accumulated for my business I bought over time second hand. I had to count hangers, signs, fixtures, carpets, decor and everything else. I was a single owner/ operator. It seems like its a easy way to collect money, however if it isn't paid they pay theSheriffsDepartment to come out and serve a warrant on your business property. This can't pay for itself, it's $55 once it goes to Sheriff Department.

  • KJB posted at 7:57 am on Thu, Jan 10, 2013.

    KJB Posts: 588

    Mr. Steve, personal property tax is not your regular property tax that you pay on your home. It is an additional tax for anyone who owns a business in the county. And I'm talking, tiny little businesses that really don't make a ton of money.

    I am sure paying $20 a year is not a horrible thing for a small business to is the time to fill out the paper work every year, update it, etc. Also, I would like to know who is administering this paper work in the county and how much time this takes? Is the tax on very small businesses actually worth that cost? In other words, is the small tiny taxes the county takes in every year only raising enough money to pay this administration person's salary and benefits or is it only paying for the paper, postage and time? How much money is this actually bringing in to the county?

    If there are 100 micro business in Bonner County, that is only about $2000 in taxes collected. Do you see where I am going with this? My guess is that the money spent on the postage, time and paper eats up quite a bit of the $$ coming in from the tiny businesses who pay this tax.

    If it were me, I would tell a small business that they do not need to file personal property tax if their property is valued under a certain $10K or something.

  • Mr Steve posted at 5:15 pm on Wed, Jan 9, 2013.

    Mr Steve Posts: 10

    So how to propose we pay for basic services, such as education, law enforcement, libraries, fire departments, etc. Everyone will complain and moan when these services disappear. Most of received a decent education because of taxes. Don't our children and future generations deserve the same if not better! And really how much do we spend on property taxes? Mine aren't even 2000 a year and I live in a very nice home that is worth 27000. When you buy property you should expect and anticipate that there will be taxes. I have a friend who lives in Texas who pays 5000 a year in taxes and his home is worth 15000. so really, what are we complaining about!

  • Corey Greve posted at 5:04 pm on Wed, Jan 9, 2013.

    Corey Greve Posts: 937

    I may be in favor of this if they make an exemption for food in the sales tax, and any local option sales tax that may come around.

    A friend of mine owns a small business, and the time it takes for he and his wife to do the inventory required to deal with the personal property tax is a complete waste of time. I can see a sort of graduated scale for the tax rate, based on the yearly gross of the company in question. But then that is just another thing to make the tax code more complicated.

  • Law Abiding Citizen posted at 10:18 am on Wed, Jan 9, 2013.

    Law Abiding Citizen Posts: 65

    Yes get rid of personal property taxes!!! Lets have everyone help..

    I always said "We should NOT lose our land because of a tax that is against every grain of the constitution"...

    Although i agree mostly with this i believe anything under $30.00 should be exempt (poor people use our money to live which we are taxed on then they get taxed seems like a double jeopardy situation to me) and medical supplies/meds...

  • KJB posted at 9:15 am on Wed, Jan 9, 2013.

    KJB Posts: 588

    Unfortunately this personal property tax affects very small businesses. Yes, even a one-person, home-based operation must report any computers, desks, chairs, software, etc. and pay tax on that every year. It is pretty crazy. The amount a small business pays is relatively negligible, and I would think the servicing involved with the county for monitoring those small businesses, tracking the paper work, issuing the yearly requests for updated property far outweighs the amount of tax coming into the county.

    I would be in favor of a business property tax, but only for large businesses...somewhere over a certain dollar amount in profit per year...before the tax kicks in. Does it really make sense to squeeze $10 or $20 a year out of some small home-based business??

  • LakeViewer posted at 1:58 pm on Tue, Jan 8, 2013.

    LakeViewer Posts: 928

    Here we go again. Gov. Otter is proposing to eliminate big business property taxes, and replace that revenue with local taxes. He has been reducing state funding of schools the past number of years, and replacing that funding with local school supplemental taxes on our homes.

    What this could mean is additional local sales taxes that could be levied at both the county and city levels. This on top of the 6% already levied by the state. Sales taxes here could easily reach 9% or higher if this is enacted. You can bet the state will not release it's grip on the present 6% sales tax.

    The legislature has handed enough tax breaks to big business special interests .

    Additional taxes were recently rejected by Sandpoint and Ponderay. We need to do the same with the school supplemental levy in March.

    It is time to just say "no more taxes".