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Personal property tax discussion may be changing in Boise

The Power County Press of American Falls, Idaho

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The conversation of repealing the personal property tax on business may be shifting toward a compromise.

Idaho Association of Counties representative Seth Griggs, during a conference call with the Power County Commissioners on Thursday, Jan. 24, said the Thursday, Jan. 10, announcement by the Monsanto Corporation that the company would not support a repeal if it would damage the services offered by Caribou County, a report by the Idaho Tax Commission, and a possible disconnect between the Idaho Association of Commerce and Industry (IACI) and Governor Butch Otter have cooled legislative support for a total repeal of the tax.

Griggs was quick to remind the Power County Commission the issue is not dead but the topic of conversation among legislators has shifted to developing a compromise. Griggs also stressed that lawmakers are hesitant to discuss specifics of a possible compromise.

"As a whole the legislature is desperately looking for ways to protect local government. There are individual legislators that want to do extreme things but as a whole the conversation is how they give benefits without damaging communities," said Griggs.

Griggs said Monsanto taking a position against the repeal is just the stance of one company, but the change of position did damage internal fidelity of IACI.

"Monsanto is most likely not going to actively campaign against the repeal, but it seems their (Monsanto's) reception at IACI has cooled since the announcement," said Griggs.

Griggs also spoke with the commissioners about the effect of a recent report by the Idaho State Tax Commission detailing the impacts to each taxing district statewide.

"Until now it has been hard to get people to grasp what the impact would be, but now they can see exactly how much it will take away from their schools, fire districts and other services. This study shows exactly what each district will be losing across the state," said Griggs.

Power County Commission Chair Vicki Meadows questioned Griggs about the idea of a local taxing option as suggested by Otter during the State of State address.

"We are obviously concerned by this personal property tax repeal, have been since this whole thing started in 2008. When the governor talked about the local option it got us thinking but we wanted to talk to you (Griggs) to ask if that is a viable option, and what that might look like," said Meadows.

Griggs responded there was not a lot of public action coming from Boise but there are meetings taking place at the capitol on the very topics Meadows asked about.

'Behind the scenes the governor has called several high level meetings to find out where everyone is at, and to create an open dialogue to develop a compromise," said Griggs.

Griggs also gave his personal analysis of the local option.

"I know of very few legislators that are in favor of the local option. There are some very big hurdles in the way of a local option. Constitutionally there is a very high threshold to create a local option. I think it may be possible to get a majority vote to create a local tax but getting the needed super majority is much harder," said Griggs.

Griggs said the momentum that IACI seemed to have during the summer and election season seems to be waning as legislators begin to understand the ramifications of a full repeal.

"I think most counties are very lean and there is not as much fat to cut as some of the proponents of the repeal thought there was. Legislators are also wrestling with the reality this could prevent a county from providing mandated services," said Griggs.

Griggs continued saying not replacing the lost revenue from a repeal of personal property tax could place counties in danger of being sued.

"As an example the state code states counties must have courthouse services five days a week with the exceptions of holidays. If you lose so much money you can only have your courthouse open three days a week. Anyone including a judge could order the county to comply with that state code or face penalties. At that point you have courts setting budget policy. In short this destabilizes the county tax base, and that is what legislators are now starting to understand," said Griggs.

Funk commented about the need to continue educating people about the effect repealing the tax will have on Power County and that many may be supporting IACI without knowing it.

"We still need people to understand the impact this could have here, and that they may belong to a professional association that is a member of IACI. We need to let people know they may be supporting this without knowing," said Funk.

Meadows said there are many professional organizations on the membership list of IACI but local members may not agree.

"There are a large number of groups on the IACI list. I don't think the local real estate agents around here want to see this happen but the Idaho Association of Realtors are a member of IACI. I don't think they realize the group they belong to supports this idea," said Meadows.

The commissioners ended their call with Griggs by expressing their frustration. Meadows said she is looking for a resolution.

"I want this to come to an end. I don't want to see our county hurt, but I want to see this come to a final conclusion, not this repeating fight every legislative session. As a county we have not been able to plan for anything since 2008 because we, don't know if we will have the funding the following year," said Meadows.

Power County Prosecutor Ryan Petersen echoed Meadows comments.

"I don't want to just squeak by. I don't want to say 'oh they didn't get the votes, we survived.' I want to see a final compromise that will kill this issue dead and be done with it," said Petersen.

Petersen told the commissioners he would like to be more deeply involved in the lobbying effort against repealing the personal property tax, and offered to spend time during the, county prosecutor meetings scheduled for early February, speaking with legislators about the impacts to Power County.

"I believe I can speak about the economics of this, and the numbers never lie. Economically this does not work out for the state," said Petersen.

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Original Publication Date: January 30, 2013

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