Thursday, July 20, 2006

Dems taking page from GOP manual

Following my comments is an editorial from The Coeur d'Alene Press.

What bothers me about the Republican plan is that it's not tax relief for the average homeowner, it's a tax shift. The plan mostly benefits large businesses who don't have the financial burden that regular "Joes" up in Coeur d'Alene do.

Right now, property tax in Idaho pays for education. Under the Republican tax plan, property taxes would get cut, but then be shifted over to sales tax. This would take money away from education AND raise the sales tax burden on Idahoans.

Under the Democratic tax plan, Idaho homeowners (not special interest and vacation homeowners) would desperately receive property tax relief. Then, under Proposition 1, there would be a 1 percent sales tax increase, the revenue from which would go strictly to education funding.

Idahoans and Idaho businesses have some of the lowest tax burden in the U.S. This is great. However, educational funding in Idaho is so low that industry experts are saying it keeps many high-tech and agricultural tech firms away.

One front-page photo showed two politicians sitting at a table outdoors, calmly discussing their party’s proposal for property tax relief. Like a tall glass of lemonade on a hot summer day, that plan seems refreshing, without the bitter aftertaste of raising one tax to ease another.

The photo directly beneath it relayed a far less tranquil image: a resident, arm raised and mouth open wide, shouting at organizers of a taxpayer rally. His party’s plan is riding a rough sea of clashing ideas and ideals, including a sales-tax hike to offset rising property taxes. It is a tall glass of lemonade without any sugar, and the photos don’t go with the parties you’d normally suspect.

It is the state Democrats, not the fiscally proud Republicans, who have tendered what appears to be the more palatable of two property-tax proposals. It is the Republicans, not the Democrats, who have embraced the concept of higher taxes as a greater good.

Both parties aim to reduce property taxes by an estimated 20-percent for Idaho homeowners. Democrats would use just over half the state’s $200 million surplus to pay for public school’s maintenance and operations – one of the biggest slices of homeowners’ property tax pie – and continue to pay for it in the future through the state’s ongoing growth.

A key part of the Democrats plan is this: If your property qualifies for the homeowner’s exemption, you get the property tax relief. Out-of-state property owners or those with additional homes would not receive the tax relief. In other words, those who need the relief most would get it, without the burden of additional sales tax.

Republicans, meantime, are moving toward a special session of the Legislature that likely will include a 1-percent sales tax hike to provide roughly 20 percent property tax relief for Idaho homeowners. This is the same, overwhelming majority party that is looking for a special session because it was unable to adopt a meaningful property-tax plan in regular legislative session.

Adoption of the Democrats’ plan wouldn’t necessarily mean the state’s sales tax will remain at 5-precent. With broad support from that party, educators have placed Proposition 1 on the November ballot, seeking a 1-cent sales tax increase to support schools. That makes the Democrats’ property-tax proposal even more politically expedient; perhaps they can provide property-tax relief where it’s needed, yet still get a sales-tax increase approved and generate $200 million in additional schools revenue each year.

With a special session likely on or around August 25, we urge participants to throw partisanship out the window for the benefit of all taxpayers. The best property-tax relief plan should find favor no matter which party has more fingerprints on it.

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