Major Tax Shift During Past Decade

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.

Comments & Discussion

Comments are closed for this post.

  1. Basing property taxes on value of the property rather than value of the services received is the problem.

  2. Michael Quinlan
    Jan 21, 2008, 7:25 pm

    Is there some place to find the raw data for this analysis?

  3. Rod in SE Boise
    Jan 21, 2008, 7:32 pm

    Taxing assets (property taxes) and spending (sales taxes) is the problem. We should only tax income.

  4. Rod in SE Boise
    Jan 21, 2008, 7:37 pm

    Ken Robison’s analysis seems to me to be right on, and the state legislature needs to address this problem immediately, but I won’t hold my breath.

  5. Property values are said to be down this year with the slowdown in demand for homes. Assessed values may or may not drop but you can bet the levy rates will more than make up for any drop in home values and homeowner taxes will continue to increase.
    The shift to an additional 20% in sales tax did nothing to lower the taxes on my home. I now pay more in property taxes than I did for my mortgage payment. Who knows what a home is worth until it actually sells. Owners get to pay taxes on a value they can’t participate in any way until the property is sold. When will the good people in the State Legislature figure this out and make the system more equitable.

  6. It doesn’t really seem to matter how you measure it. What it seems to say is that all those “deals” to Micron, Albertsons, Cabela’s, Buck Knives, Coldwater Creek,Camille Beckman’s, and every other company that promises more than two jobs,has come back to “bite” the citizens in the butt!
    I would join the forces to oust those dirty conservatives, but I don’t believe the dems would do any better. Libertarians are a factor of market share. Anarchy is looking better all the time.

  7. If you are a dues paying member of IACI it looks like you’ve received a pretty good return on your investment these past years.

  8. A lot of good info…a lot of bad info. You can’t use dollar amounts only to gauge increases. Idaho’s population has swell by about 300,000 people, (about a 20-25% increase), since 1997 and obviously 1997 dollars are worth more than 2007 dollars. These factors have to be factored in to paint a more accurate picture. Without having the figures adjusted to at least those two factors we don’t really know what we’re looking at.

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