Senate votes to override tax veto

BOISE — The Senate voted Wednesday 28-7 to override the governor’s veto on sweeping property tax legislation. Members of the chamber also voted unanimously to approve a trailer bill that fixes some of the issues the governor had with HB 292.

Sen. Doug Ricks, R-Rexburg, said of the trailer, “I think it’s a good change that’s brought forward, I think it’s needed.”

The House on Thursday introduced the trailer, voted to pass it and approved an override of the veto of HB 292. It takes a two-thirds majority of both chambers to override a governor’s veto.

HB 292 would use a variety of fund sources to provide homeowner tax relief and provide money to school districts for paying off bonds and levies. One of the funding sources would include 4.5% of sales tax revenue. It would also increase eligibility for the circuit breaker — a tax exemption for low-income homeowners.

In its first year, the legislation would use $74 million in surplus funds and funding left over from the tax rebate fund to provide around $117 million in property tax relief when accounting for adjustments made in the trailer bill, according to the governor’s office.

The trailer addressed an issue with the prioritization of where sales tax revenue would be distributed that could have impacted bonding on several of the state’s transportation projects currently underway. In Gov. Brad Little’s veto message, he included a letter from the Idaho Housing and Finance Association that said up to $400 million in transportation projects could be endangered because of the bill’s potential impact to Idaho’s bond rating.

There were also potential issues with funds set aside for paying for public defense, which the state is obligated to do.

Little said in an emailed statement that he’s pleased the Legislature addressed property tax relief, which had been one of his priorities he identified in his State of the State address.

“I’m also pleased the Legislature fixed concerns I identified in my veto of House Bill 292 — transportation bonding and public defense funding,” Little wrote. “The process worked, and we are getting real property tax relief done for Idahoans.”

Senate Minority Leader Melissa Wintrow, D-Boise, said she felt strongly that the chamber shouldn’t override the veto and that the trailer bill didn’t address Little’s concerns with the elimination of the March election date for school districts to run bonds and levies.

“This bill basically cripples schools potentially in the future because 80% of the bonds and levies that get passed are at that time,” Wintrow said before the override vote. “And we know that the Legislature has not always been, or had a good track record of, keeping up with school funding as we should.”

Wintrow said she wanted a simpler bill that provided direct relief to homeowners, which she said would have involved indexing the homeowner’s exemption and increasing eligibility for the circuit breaker.

The Idaho School Boards Association testified on the bill that it was in favor of most of it but was opposed to the section eliminating the election date, which is the one most used by school districts.

One of the bill sponsors, Rep. Jason Monks, R-Meridian, has previously said it was important to those who negotiated on the bill that the date be eliminated because it allows districts to ask for money before knowing how much the Legislature will appropriate to schools, and there’s lower turnout in the elections.

A statement from the governor’s office said of the loss of the election date, “It is unfortunate we lost some local control in school funding this session, but Governor Little remains committed to supporting education as his top priority in the years ahead.”

HB 292 passed with broad support from both chambers. The trailer bill passed the House 56-11.

It is expected that in its first year, the bill will put around $205 million toward tax relief, both directly to owner-occupied property tax bills and to school districts to go toward bonds and levies. Later, funding will be drawn from sales tax revenue, online sales tax revenue, and up to $150 million general fund surplus funds for fiscal years 2023 through 2025.

The bill was the result of negotiations among House Speaker Mike Moyle, Monks and Sens. Scott Grow, R-Eagle and Ricks, as previously reported.

The Senate had previously tried to do what’s called a radiator cap, in which a bill is gutted and completely replaced except for the number, to create a new bill that addressed the governor’s concerns. The House rejected this new bill and instead introduced its trailer.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.