Citizen legislature and personal property taxes

By Sen. John Tippets

In my mind, the exemption of personal property from taxation is the most important issue we will deal with during this session of the Idaho legislature, and I am right in the middle of it. I find myself in an interesting position: I am a state senator (representing individuals, schools, cities, counties and other local entities that oppose repeal of the tax if the funds are not replaced); I am employed by Agrium (which owns a large manufacturing facility in Caribou County and would benefit financially if the tax were repealed); and I have represented Agrium on the board of directors of the Idaho Association of Commerce and Industry (IACI) since before I was a State Senator. IACI is one of the prime supporters of the repeal of the personal property tax.

Potential conflicts of interest are not uncommon in the Idaho legislature, since we are a part-time legislature and most of us have other jobs outside of our legislative responsibilities. I think that is a good thing (the jobs, not the potential conflicts). Three months of the year we are in Boise setting budgets and making laws for the state. The rest of the year, we are back at our regular jobs, living in our own homes, and living with the laws we have passed, like everyone else. Some states have a full-time legislature; I hope Idaho never does.

So what does a legislator do when he or she represents competing interests? The answer is very simple for me: I was elected by the people of district 32 to represent you in the Idaho State Senate. That takes precedence over any other interests I may have.

I have concerns about repeal of the personal property tax. The tax is very unpopular, and most business owners would like to see it go away. I understand that. My concern is that many cities, counties, schools, cemetery districts, fire districts, sewer districts, and other taxing entities could be very seriously impacted if the tax is repealed and those funds are not replaced.

For example, Caribou County derives nearly 43% of its property tax revenue from personal property. This is higher than any other county in the state—due primarily to the existence of the phosphate mines and the Monsanto and Agrium plants, which have a great deal of personal property associated with them.

Let me say a word about my employment with Agrium. As I stated previously, Agrium would benefit significantly from repeal of the personal property tax. However, the company decided from the beginning not to support repeal of the tax unless it is done in a way that will not hurt the groups previously mentioned (cities, counties, schools, etc.). In fact, Agrium opposes the repeal if the funds are not replaced.

What would have happened had Agrium chosen to support repeal of the personal property tax? We simply would have had someone else represent the company on that issue, so that my ability to represent you would not be compromised in any way.

Representative Loertscher, Representative Gibbs, and I (The three of us represent district 32.) are working hard to find a reasonable solution to this issue, but we will not support repeal of the tax if it is going to negatively impact the services you receive from your schools and local government entities.

It is too early to predict the outcome of this issue. Lots of discussions are taking place, and we are involved in many of them. No bills have been drafted at this point—at least that I am aware of. More legislators are becoming aware of the potential for harm and are realizing that we need to approach the issue carefully. Obviously, that is a good thing and gives me hope that time is on the side of reason.

Stay tuned—there is much more to come on this issue.

This column was written by state Sen. John H. Tippets, R-Bennington.