This week, we’ve been exploring the potential impact that repealing Idaho’s personal property tax will have on schools and services. Despite its name, this tax isn’t levied on property held by individuals, but on equipment that companies use—equipment like pipelines, mining machinery and aircraft. Some are advocating repeal of the tax.
Cities and counties aren’t the only government entities that count on the personal property tax to fund their programs and activities. Schools districts also rely on it, with school districts sourcing an average 9% of their budgets from the tax.
Rural counties are especially reliant on the personal property tax. More than 50% of total property tax that funds Richfield schools comes from this source. Though property tax isn’t the only source of funding for school budgets, it’s an important one, and with school funding already slashed to the bone, most districts can’t afford another cut.
While bigger school districts don’t typically rely as heavily on personal property tax as some rural counties, they face millions of dollars in cuts. If the legislature completely eliminates the personal property tax, the Boise school district will have to find another $7.8 million to keep budgets whole. Nampa schools, already facing a $4.3 million levy in March, would need to find another $1.2 million and Pocatello would find themselves $1.4 million short. With state economic growth—and therefore state taxes–still anemic, these budget gaps would more than likely be filled by increased local property taxes.
Repeal of the state’s personal property tax would mean cuts to already challenged school budgets, and/or a shift in taxes from corporations to individual property owners. Idaho taxpayers are still struggling with the effects of the Great Recession and can’t afford this radical change in our revenue stream right now.
Mark your calendar: next week is Education Week at the Legislature
Next week legislative budget committees will be tackling the state education budget, with Tom Luna presenting his budget to the Joint Finance and Appropriations Committee on Thursday January 24. We’ll be in every meeting, reporting on what we hear and see. Stay tuned.