PROPERTY TAX RELIEF PASSES LEGISLATURE

BOISE – Called into Special Session by Governor Jim Risch, the Idaho Legislature approved House Bill 1, the Property Tax Relief Act of 2006. The House approved the legislation on a 47-23 vote followed by Senate approval with a 24 – 11 margin, two-thirds of each house.

“I am overwhelmed by the two-thirds vote by both the House and the Senate for property tax relief. Difficult issues usually result in a close vote, but Idahoans saw that this plan provides immediate and permanent property tax relief while substantially helping education,” said Risch.

Surrounded by House and Senate legislators, Governor Risch noted that the fight for property tax relief was not over. “In November, voters have the opportunity to cast their ballot in an advisory vote. I invite all Idahoans to join together and support property tax relief while protecting education,” Risch said. “Idaho is a great state, and this legislation makes it even greater.”

House Bill 1 permanently eliminates the 3-mil education maintenance and operation levy on real property. That is $3 for every $1,000 of assessed value, which is not capped like other local government levies found on property tax bills. Thus, the change will stop the wildly escalating increases in property taxes. The removal of the levy reduces property taxes by $260 million statewide.

The sales tax would be raised on October 1 from 5% to 6% to protect education, and generates $210 million. The governor’s proposal is to use $50 million from the surplus to keep education funding whole, and uses another $100 million of surplus funds placed into the Public Education Stabilization Fund. That $100 million “rainy day” savings account could be tapped for public schools in the event of a funding shortfall in an economic downturn.

The legislation also requires an advisory vote in November, asking voters if they want to keep the property tax relief just adopted and to keep the sales tax at 6% to protect education.

Overall, Idaho taxes are reduced over $200 million for calendar year 2006 and by about $50 million annually thereafter under House Bill 1.

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