When Boise Weekly sat down in January with Mike Ferguson, former chief economist for the State of Idaho and current head of the Idaho Center on Fiscal Policy, he said that there had been "precious little time for people to familiarize themselves with" a proposal, floated by Gov. C.L. "Butch" Otter, to phase out personal property taxes for Gem State businesses.
"I question why we're rushing headlong into further undermining our ability to fund public services when it's now evident that we're doing, at best, an extremely mediocre job and, at worst, an unconstitutional job of funding public schools," Ferguson told BW.
And now, Ferguson says his further analysis finds the proposal would be devastating, "falling most heavily on Idaho's public schools."
In a six-page summary of the proposal—currently identified by the Idaho Legislature as RS 22034—Ferguson outlines how No. 1., an approximate $90 million revenue shortfall in the state General Fund would cut off public schools at the knees since they receive approximately half of the state General Fund; No. 2., future supplemental, bond or plant facility levies before Idaho voters would need to be anywhere from 2 percent to 100 percent higher; and No. 3., up to $41 million of current personal property tax would be shifted to real property taxpayers without a vote.
Ferguson concludes that the proposal would have an adverse effect on Idaho's ability to provide funds for pubic education. He cautions lawmakers on proceeding "without any apparent analysis of the impact that diversion of funds will have on state programs."
You can read Ferguson's analysis here: ferguson_personal_property_tax.pdf