While the Idaho House and Senate on Friday passed Gov. Jim Risch's plan to cut $260 million in property taxes, Democrats, including local lawmakers, are decrying both the plan and the process by which it was approved.
"We spoke up for the people who felt the governor's bill was not fair," said House Minority Leader Wendy Jaquet, D-Ketchum. "The people in a world of hurt are the homeowners. His bill doesn't help people on (home) values."
The governor will pay for his property tax cut by increasing the sales tax to 6 percent from 5 percent, raising more than $210 million annually, and making up the rest from Idaho's budget surplus. The plan, which will cut about 20 percent off most people's property taxes, puts the state Legislature in charge of almost all public school operating expenses.
Idaho university presidents and the Idaho Education Association, the teachers union, argued that school funding will be pitted against other state programs such as Medicaid and prisons in a fierce rivalry for scarce money.
Democrats opposed Risch's plan in part because the sales tax increase will affect low-income people who don't own their own homes, while giving breaks to businesses, mines, second-home owners and farms. Those segments are not feeling the pinch of escalating property values as much as primary homeowners, Jaquet said.
About $105 million will be cut from the property taxes of residential homeowners. Roughly $62 million will come off the taxes of vacation home and rental property owners. Another $74.4 million will come from businesses, and $18.4 million will be cut from the taxes of others, including farmers and utilities.
The Republican majorities in the Senate and House killed Democratic attempts to introduce an alternative proposal that would have cut $105 million in taxes on residential homeowners, but left the school levy on businesses, farmers and utilities. The minority party's plan didn't call for a sales tax increase.
"We did not have a full hearing in the House Revenue and Taxation Committee, which I thought was inappropriate," Jaquet said.
Democrat gubernatorial candidate Jerry Brady threw his support behind the minority party's plan.
"It's the plan that gives tax relief to the people who actually need it: primary homeowners," said Brady's communications director, Michael Ames. "The Republican plan was a tax shift, not a tax cut. Raising taxes is a classic burden on working people and renters."
In addition, he said, the plan destabilizes school funding because it relies on a sales tax, "which is inherently volatile."
Democrats had two goals Friday, said Senate Minority Leader Clint Stennett, D-Ketchum. One was to get a hearing on their bill, which did not happen.
Democrats mounted a protest on Constitutional grounds, claiming that Risch mixed his will with the Legislature.
"There are three branches of government: the courts, the Legislature and the executive," Stennett said. "(The governor) only allowed for his bill to be heard, limiting the power of the Legislature. The Legislature erred in doing so. We're separate and equal branches of government, and we should protect that."
Democrats then invoked Senate Rule 44, which says any senator has the right to protest any action of the Senate, and the protest will be entered in the record.
The majority party "basically threw out our protest," Stennett said. "It was very acrimonious and political. This was a con job."
There will be a record of Democrats' objections, but the contents will be omitted, he said.
Stennett said attorneys are looking into whether any Constitutional violations were committed, while Jaquet said Democratic lawmakers will present additional legislation in January.
"We're not done fighting," Stennett said.
The Associated Press contributed to this report.
