Local sales tax plan re-emerging in Idaho

September 11, 2011 - Updated: 5:57 a.m.

BOISE – A consortium of Idaho business people has resurrected a failed idea from the 2008 Legislature that for many still holds the allure of helping communities address local needs while boosting their economies: Letting residents vote to tax themselves so they can expand public transit or build roads.

Former Albertsons Inc. Chief Executive Officer Gary Michael, property manager Skip Oppenheimer and Republican consultant Jason Lehosit are among those mulling a 2012 ballot initiative on local option sales tax authority.

Three years ago, legislation died after Gov. Butch Otter and House GOP lawmakers insisted on constitutional restrictions that proponents couldn’t live with.

This week, Michael told the Associated Press the idea re-emerged during informal talks among business people who meet over lunch about how to give local governments new financing tools. Discussions began after a failed effort by Boise Mayor Dave Bieter to secure federal funding for a downtown trolley line that some panned as ill-conceived.

“The thing we heard loud and clear from people was, ‘I’m not for this, I’m for a total solution,’ ” Michael said. “We said, ‘Let’s not let this thing die. Let’s see if there’s a way to come up with something broader.’ ”

Those initiated in the discussions include mayors like Bieter and Mark Dunham, who leads the Idaho Associated General Contractors building group – whose members could benefit from a new revenue stream for construction projects.

The group is now drafting a ballot measure but said it’s still several weeks away from a final decision on moving ahead. To get this before voters in 14 months, proponents must gather 47,432 registered voters’ signatures.

A campaign would cost hundreds of thousands or even more than $1 million. That’s where people like Lehosit and Lauren McLean, a Boise city councilwoman, come in.

Lehosit, a former fund-raiser for Otter, ran the 2007 campaign to persuade Ada and Canyon county voters to approve the College of Western Idaho, the state’s newest community college, in Nampa. McLean, appointed to the council this year, is tapped in to more-liberal circles, having organized the $10 million Boise Foothills Open Space campaign in 2001.

“The people of Idaho have the right to make local decisions on funding needs,” McLean said. “The right to vote yes or no on local decisions is really important.”

Even so, such a measure faces tough questions three years after the 2008 Statehouse showdown.

That year, a coalition of 70 businesses and local governments sought to pass local option sales tax authority to benefit mass transit in Boise, bus stop and bridge repairs in Lewiston and road resurfacing in Post Falls and Idaho Falls.

But foes like Idaho House Majority Leader Mike Moyle, R-Star, raised concerns that it was really just another way for expansive local governments to hike taxes.

He and others, including Otter, insisted any bill be married to a requirement – anchored in Idaho’s Constitution – that at least 66 percent of voters support a sales tax hike, to prevent future lawmakers from lowering the threshold without asking residents first.

The Idaho House passed the plan; state senators balked. Senate President Pro Tem Brent Hill said his chamber likely would have passed it even with the two-thirds requirement, but not one tied to a constitutional amendment.

“If it came up in my community, would I support it? Probably not,” said Hill, R-Rexburg. “But right now, the only option people have to vote themselves a tax increase to finance whatever it is they are trying to finance is property taxes. That is the most hated tax of all, according to every survey everybody does. Perhaps they should have more options. I believe in local control.”

After the 2008 session, however, the local-option battle lines were clear: Oppenheimer gave cash to Moyle’s 2008 GOP primary election opponent, Nancy Merrill. With the property developer among proponents of this renewed push, that’s hardly something Moyle has forgotten.

Oppenheimer didn’t return a phone call.

Moyle said Thursday that proponents are entitled to bring an initiative, but he remains skeptical.

“It’s not local option. This is a sales tax increase,” Moyle said. “They use the word ‘local option’ to skew what it really is. What are they going to be able to use it for? Is it for roads? Is it for the Boise trolley? Is it for mass transit? That’s the discussion I want to know.”

That’s one of the unanswered questions, as proponents try to create an initiative palatable to conservative voters but that still allows cities and counties the freedom to meet diverse needs. There’s internal debate over restricting it to transportation projects – or making it flexible enough to accommodate a broader range of economic development.

“We’re exploring all possibilities,” Lehosit told the AP. “We’re trying to see if this is a tool the voters of Idaho want. This isn’t about a trolley.”

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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