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Bills Pass for Health Insurance and Personal Property Taxes

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Despite contentious issues, the Legislature is making progress

The legislative session was expected to end on March 29; however we encountered a last minute controversy over the appropriation bill for public schools which is expected to delay adjournment until the middle or end of the first week of April.


The public school appropriation, House Bill 323 (H323), was backed by a wide range of supporters, including the Association of School Boards, administrators, teachers and the Idaho Education Association. The appropriation was passed in the Joint Finance and Appropriation Committee (JFAC) by a vote of 15 to 5 and by the House on a vote of 52 to 16.


However, when the legislation was before the Senate, Senate Education Committee Chairman John Gedde opposed H323, stating he didn’t believe that the House and Senate Education Committees had enough input into the intent language specifying how the money was to be spent by the school districts. The Senator was able to gain enough support to defeat the appropriation bill by an 18 to 17 vote.
The two education committees are now engaged in discussions for a counter proposal to be submitted to JFAC for committee review. JFAC will then develop a new appropriation for approval by the House and Senate if the committee accepts the two education committees’ proposal. The whole process is expected to go into the first week of April, hopefully leading to adjournment no later than April 5. I will report on the final appropriation bill for public education in the next Journal article.


In the meantime, two bills of particular interest that have been approved by the legislature and sent to the Governor are House Bill 315 (H315) and House Bill 248 (H248). H315 deals with the exemption of personal property tax and H248 is a new version of the Health Insurance Exchange legislation that was passed by the Senate a few weeks ago.


Exempting personal property tax has been an issue before the legislature for several years. Local governments have opposed exempting the tax because in some counties it represents as much as a quarter of local government tax revenue.  Legislation that has been supported by large industry would have exempted all personal property from the tax rolls, for a total loss of about 140 million dollars to local governments.


H315 passed by the House and the Senate is compromise legislation submitted by the Association of Counties that exempts a portion of the personal property tax, essentially providing relief for about 90 percent of the businesses having to pay this tax. The loss in county revenue is only about 20 million dollars.


H315 provides that effective January 1 of this year, the first $100,000 of business personal property will be exempt from taxation, including operating property. Operating property generally refers to larger and more costly equipment used by public utilities and railroads, including utility poles, railroad track, etc.


The $100,000 cap on the exemption prevents exempting these more costly and larger operating properties which would have impacted counties’ revenues significantly.


The legislation also provides that taxable personal property purchased on or after January 1 of this year with a purchase price of $3,000 or less will be exempted from taxation. Just as significantly, instead of having to file a personal property tax form every year as now required, taxpayers with a personal property tax inventory of $100,000 or less will only be required to file for the exemption once every five years as long as their total taxable value remains below $100,000.


The fiscal impact to county revenues is estimated at about 20 million dollars as opposed to the 140 million dollar impact in the legislation proposed by industry. The state general fund will be used to reimburse the local governments for the 20 million dollar loss in local government revenues.


The personal property tax is an onerous tax requiring extensive reporting and payment on equipment that in often cases is old and depreciated in value but still requires a tax payment based on full value. It is a difficult tax to enforce and definitions of what is and what is not “personal property” are not applied consistently across the state. H315 provides a solution to the personal property tax issue that is reasonable, affordable and removes an onerous reporting burden to those small businesses that are most impacted.


February 21 the Senate passed Senate Bill 1042 (S1042) that approved implementation of a Health Insurance program in Idaho as an alternative to a federally implemented health insurance exchange program. The proposed legislation passed by a 23 to 12 vote.


When the legislation was transferred to the House, a new bill, House Bill 248 (H248), was developed based on changes to S1042 that added more conditions enhancing the ability of the state to control provisions of a state implemented program.


H248 passed the House by a 41 to 29 vote and was transferred to the Senate. The Senate passed the legislation by a 23 to 12 vote.


The Affordable Care Act is federal law and its provisions are going to be implemented, either through a federal process or a state process. I supported the state exchange simply because I believe a state exchange can offer a better choice of plans than a federal exchange, and the overall cost for those purchasing insurance through an Idaho exchange will be less than if the exchange was implemented by the federal government.


I welcome and encourage comments on legislative matters but because I anticipate the session ending by April 1 you can contact me at my home in Dover. I can be reached by e mail at: geskridge(at)coldreams.com. by phone at 265-0123 and by mail at P.O. Box 112, Dover 83825.


THANKS FOR READING! George

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Rep. George Eskridge Rep. George Eskridge the Republican Representative for District 1 in Idaho’s House, George Eskridge can be reached at 208-265-0123 or write PO Box 112, Dover, ID 83825

Tagged as:

Idaho Legislature, education funding, A Seat in the House, personal property tax, health insurance exchange

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