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Taxes

Major Tax Shift During Past Decade

 January 21, 2008 ⋅  Post a comment

Long time Democrat legislator Ken Robison of Boise offers up the following look at Idaho’s taxing record over the past decade and he concludes homeowners are taking on a bigger tax burden while business, utilities, and farmers—well represented by lobbying groups—are Paying less.

By Ken Robison,
(former legislator and journalist)

Analysis of Idaho tax and budget figures over the 10 years 1997-2007 shows that millions of dollars in taxes have been shifted to individual taxpayers.

The figures also show that state support of public schools and of higher education has increased much less than the growth in state revenue. If you consider inflation and enrollment growth, there was no increase in state support for schools or colleges and universities.

● Even with property tax relief legislation passed in 2006, residential property taxes in the decade increased nearly four times as fast and more than five times as much as taxes on other kinds of property–commercial, utility and farm.

● The sales tax was increased 20 per cent, to six cents to replace $3 per $1,000 of school property taxes. While commercial and utility property received millions in property tax relief, the potential relief for homes was partly offset by further increases in assessed value.

● In the three years 2003 to 2006, total property taxes on owner-occupied homes increased by $30 million. Taxes on other residential property, rentals and second homes, increased by $32 million. Total residential taxes increased $62 million. Meanwhile, total taxes on commercial, utility and farm property went down by $45 million.

● The share of total property taxes paid by residential property increased from 45 per cent to 64 per cent from 1996 to 2006. Meanwhile, the share paid by other kinds of property fell from 45 per cent to 36 per cent.

● Over 10 years, total residential property taxes increased $310 million, 79 per cent. Total taxes paid on commercial, utility and farm property increased $72 million, 22 per cent. Total property taxes increased $382 million, 53 per cent.

● Residential property paid 81 per cent of the 10-year increase in property tax revenue. Commercial, farm and utility property paid 19 per cent of the increase.

● Revenue from taxes paid mostly by individual taxpayers, the sales tax and individual income tax, were up by $1.2 billion in the decade, 104 per cent. Total corporate income tax collections increased 55 per cent.

● More of the cost of higher education was shifted to students. Because of lean appropriations for colleges and universities, student fees increased by $79 million a year, 167 per cent. Fees increased nearly four times as fast as state support for higher education. The share of higher education costs paid by student fees increased from 20 per cent to 32 per cent.

Official state budget figures indicate that there was a large increase in support for public schools. The reality is different.

With legislative decisions, $325 million a year in state tax revenue is now being used to replace school property taxes.

This $325 million was not an increase in support for schools. It merely replaced one funding source with another.

Actual state support for schools, the state general fund appropriation plus school endowment fund money, less property tax replacement, went from $714.8 million in 1997 to $993.6 million in 2007.

With inflation a 2007 dollar is worth less than a 1997 dollar. Considering growth in enrollment, state support went from $2,914 per student to $2,878 per student, measured in 1997 dollars. In the last session, the legislature increased the appropriation for schools for fiscal year 2008. Still, figures for 1998 to 2008 will show only a slight real increase in state support.

Over 10 years, 1997-2007, basic state appropriations (the general fund budget), not counting money for property tax replacement, increased 63 per cent. State support for schools increased 39 per cent and support for colleges and universities increased 40.5 per cent.

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